California Gaming Expansion Voted Down
by Jack Shinar
Date Posted: 11/3/2004 1:24:56 PM
Last Updated: 11/5/2004 8:53:35 PM

California voters stomped a statewide racetrack/card parlor slot machine initiative Nov.  2, with the complicated measure garnering support of less than 20%.

The result was expected. Sponsors of the measure had quit campaigning a month before the election when private polling showed the initiative, Proposition 68, had little chance with the voters after qualifying for the ballot with a positive initial reception.

Dubbed by supporters as the "Fair Share Initiative," it would have required gaming Indian tribes to hand over 25% of  net revenues to local child, fire, and police service or face losing their monopoly over slot machines to 11 card clubs and five racetracks. But a Field Poll released just two days after the Oct. 6 decision by backers to pull out showed the measure was supported by just 20% of respondents.

That proved to be an accurate assessment. In spite of  backers spending $25 million on the campaign, it was sent down to defeat by 83.7% to 16.3%. The final figures, with 100% of the returns, were 7,871,452 opposed and 1,535,334 in favor. Opponents, made up of gaming tribes, spent nearly $38 million to defeat Proposition 68. An additional $4.7 million was spent to defeat both Proposition 68 and a rival gambling measure, Proposition 70.

The good news for the tracks out of the election was that voters also throttled the second initiative, a proposal that would have given tribes virtually unlimited exclusive gambling rights for 99 years. The vote was 76% opposed to 24% in favor.

The results were seen as voter support for Gov. Arnold Schwarzenegger's efforts to bring the tribes into line by renegotiating their operating compacts for a percentage of their profits in exchange for lifting existing caps on slot machine numbers. Revenue from California Indian gaming is approaching $5 billion-$7 billion a year, according to estimates.

As the new compacts (nine so far out of more than 50 that currently exist) would have been voided by the passage of either initiative, the governor campaigned vigorously against both.

Backers of Proposition 68 have challenged the constitutionality of Schwarzenegger's compacts in court and said they are considering a future ballot measure.

According to the Secretary of State's financial contributions data, Magna Entertainment Corp. --owner of Santa Anita Park and Golden Gate Fields --contributed just under $4.8 million to the failed campaign. Churchill Downs Inc., owner of Hollywood Park; the Bay Meadows Operating Co.; and Los Alamitos Race Course each contributed $2.62 million.

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