The following article was originally published in Casino Executive and is presented in Gaming floor with permission of the author. Professor Rose can be reached at his web site: www.GamblingAndTheLaw.com

March, 2000 Election Will Determine Fate of Casinos in California and Nevada

California voters will go to the polls in March, 2000 to decide which state
will be the casino center of North America in the coming decade:  Nevada or
California.Whoever wins will be, thirty years from now, the casino center of the
world.

The election is in response to a decision by the California Supreme Court
that Proposition 5 violates the State Constitution.  Prop. 5 had been
approved by California voters in November, 1998.  It would have allowed the
state's tribes to operate unlimited numbers of casinos, with unlimited
numbers of gaming machines and certain card games, including blackjack.

As this column is being written, the August 23, 1999 decision is not yet
final, nor has the exact language of the March, 2000 ballot proposal been
determined.  But the high Court is not going to change its mind about its
6-1 opinion.  Nor are the tribes going to back down from their drive to have
voters approve a constitutional amendment allowing casinos on Indian land.

The problem revolves around a 1984 initiative which created the State
Lottery and added this phrase to the Constitution:  "The Legislature has no
power to authorize, and shall prohibit casinos of the type currently
operating in Nevada and New Jersey."

The Supreme Court based much of its interpretation of this phrase on my
1986 book, Gambling and the Law.

The Court ruled that voters wanted to prohibit buildings containing games
that were illegal under California law, especially banking table games and
slot machines.  Putting the prohibition in the Constitution prevented
casinos from being made legal by a mere statute.

The Agua Caliente tribe of Palm Springs anticipated this decision and began
collecting signatures to put Prop. 5 back on the ballot, but this time as an
amendment to the Constitution itself.

The Court's ruling led to intense lobbying and negotiations among the
state's 107 tribes, Gov. Gray Davis and the State Legislature.  The result
may be another proposed amendment, allowing tribes to have a limited number
of slot machines and banking card games, with renegotiations to take place
later.

Either way, the March, 2000 ballot will have at least one proposal to
exempt California's Indian tribes from the prohibition on Nevada and
Atlantic City style casinos.

It is hard to imagine an election of more importance to the gaming
industry.  By my count, there are 110 parcels of Indian land throughout the
state.  More tribes are seeking recognition or are trying to acquire more
land.

The overwhelming majority of Californians live relatively near the coast -
millions in cities like San Francisco, Los Angeles and San Diego.  No matter
what Las Vegas or Reno may  try, they cannot make themselves closer to these
customers than tribes in California.

The number of potential casino patrons is large.  California has more than
33 million people.  Texas, the second most populous state, has only 20
million.  The entire country of Canada has 31 million.

The top two casino gaming markets, Atlantic City and the Las Vegas strip,
each win about $4 billion a year.  California tribes win at least $1.5
billion a year, without a single legal slot machine.

Gaming tribes are already among the most powerful political players in the
state.  The tribes spent $63 million on Prop. 5.  One tribe alone, the San
Manuel, donated $28 million. Gray Davis spent only $26 million beating Dan
Lungren for governor.

Tribes gave another $9 million to politicians in 1998.  What will their
campaign contributions look like in five, ten or 20 years, when the
Legislature and Governor have to renegotiate their casino compacts?

Tribal representatives can already trounce the state's naive negotiators.

The Governor and Legislature's opening offer, following the Court's
invalidation of Prop. 5, was to amend the Constitution to read: "An Indian
tribe is permitted to engage in any and all forms of gaming..."

Their most recent offer was to allow 40,000 slot machines in the state,
creating some of the largest casinos in the world.

But there will be no negotiating, no compacts and no casinos if the tribes
lose in Spring.  The March, 2000 election will not be a replay of November,
1998.

The question will be clearer to voters.  Prop. 5 involved "players' pool
prize systems," unnamed card games and "tribal gaming terminals."

Proponents were able to make the debate revolve around Indian rights.

This time if the tribes win they will have the constitutional right to set
up as many Nevada style casinos and slot machines as the market will bear.

In the history of America there have been only three successful campaigns
to amend state constitutions to legalize high-stakes casinos.

Proponents of Prop. 5 have always said they proposed that initiative as a
statute, not a constitutional amendment, because they were afraid they would
be unable to get the higher number of signatures required to make the
ballot.

Maybe they also did not want to ask California voters to amend their
constitution to specifically allow "casinos of the type currently operating
in Nevada and New Jersey."

©Copyright 1999, all rights reserved worldwide. Gambling and the Law® is a registered trademark of Professor I. Nelson Rose, Whittier Law School, Costa Mesa, CA.
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