Backers Say Calif. Slots Plan 'Far From Dead'

California Gov. Arnold Schwarzenegger says he will "get rid of" a racing-sponsored initiative that could bring slot machines to tracks, but backers of the measure vowed to press their case with the voters.

"This is far from a dead deal," spokesman Greg Larsen said of the racetrack/card room proposal. "The way we look at it is we are on the ballot and voters will have their say. We are at the start of a long process. A lot can happen between now and November."

Larsen said the details of the Indian deal remain unclear, and in any event "will be a lot less than the 25 percent of gaming revenue that the governor said he would seek" from the tribes.

Rick Baedeker, president of Hollywood Park, agreed. "The governor set the bar at 25 percent (of revenues). The figure they are kicking around with this deal is 15 percent, but it could be more like 5 percent. I'm not sure the voters are going to be satisfied with that."

Schwarzenegger, at a press conference June 15, said he is on the verge of announcing a one-time $1 billion bond agreement with tribal gaming interests that includes additional payments to the state of at least $275 million a year based on licensing fees for installation of additional slot machines. Current compacts limit to 2,000 the number of slot machines at any Indian casino and a rising payment scale ($12,000-$25,000) would be adopted for tribes seeking to exceed that ceiling.

A recent published report says revised compacts have been negotiated with at least 10 of the 53 gaming tribes in the state. An announcement of the deals could be made by June 21, according to the report.

Schwarzenegger said he is forming a campaign committee to oppose the track initiative, the Gaming Revenue Act of 2004, as well as a second measure to expand Indian gaming. He also said that he wanted to protect Indian gaming and keep slot machines out of urban areas.

With the new tribal agreements, the initiatives are "meaningless, and we will make sure we get rid of them," he said.

Schwarzenegger's stand is a serious blow to the hopes of supporters of the track initiative, which would require all of the tribes to provide 25% of their revenue to local fire and police personnel and for child services or lose their monopoly over slot machines. In that event, 11 card rooms and five tracks Hollywood Park, Santa Anita Park, Los Alamitos Race Course, Bay Meadows and Golden Gate Fields would split up to 30,000 slot machines.

Even without Schwarzenegger's opposition, proponents face a difficult task in fighting the tribes' considerable deep pockets and political clout.

"The tribes have said that they would spend more than $100 million to defeat us," Larsen noted. "There's no way we can compete with that. On the other side of the coin, the polling indicates that we still have the votes."

Baedeker said "the commitment has been made" to push the fight as long as the tribes refuse "to pay their fair share."

The tracks have certainly pitched in so far. According to figures on the Secretary of State's Web site, they have made contributions totaling more than $4.9 million through late April. Magna Entertainment Corp., which owns Santa Anita and Golden Gate Fields, leads the way with $1.76 million. Los Alamitos ($1.38 million), Bay Meadows ($900,000) and Churchill Downs Inc., owners of Hollywood Park ($880,000), have also made significant donations.