Proposal Could Open Door to Slots at Calif. Tracks

Slot-seeking California racetracks could benefit by a proposed state constitutional amendment aimed at pressuring Indian tribes to part with up to 25% of their casino profits.

If passed, the initiative – reportedly aimed for the November 2004 ballot – would require the operators of 54 Indian casinos to renegotiate key details of their state compacts with new California Gov. Arnold Schwarzenegger within 90 days. Tribes would pay up to one-quarter of its net revenue to the state as well as submit to land-use agreements with local jurisdictions and comply with other state gaming and environmental protection measures from which they are currently exempted.

Failure to do so would break the tribes' monopoly on state gaming and allow up to 30,000 slot machines to be split between five privately-owned California racetracks – Hollywood Park, Santa Anita Park, Los Alamitos Race Course, Bay Meadows and Golden Gate Fields – and 11 card rooms. They would pay 35% of their net winnings to cities and counties, with the bulk of the money – about $1 billion a year – earmarked for police, firefighters and public schools.

Schwarzenegger was on record during the recent California governor's recall campaign saying that tribes needed to pay their "fair share" to the cash-strapped state. Based on recent revenue totals, Indians would be paying about $1.25 billion per year if the initiative gains approval.

Several racing officials said they were unfamiliar with the proposal. Sources in Sacramento believe that the initiative came from the Schwarzenegger camp, although the governor's spokesmen have denied it.

Jack Liebau, director of California racing for Magna Entertainment Corp., which owns three of the tracks, declined to discuss the matter.

"I am not in a position to make any comment at this time," he said.

Attorney Roger Licht, chairman of the California Horse Racing Board, said he knew nothing about the measure, but was told he and commissioner Alan Landsburg would get an overview of it Friday afternoon from Rick Baedeker Jr., president of Hollywood Park, following a meeting on industry legislation.

Baedeker did not return a phone call seeking comment.

Prominent California owner Robert Lewis said he was "wholly supportive" of slots being placed at racetracks "for the long-term benefit of the industry."

In the alternative, he said it was time that Indians pay their share to the state.

"It's grossly unfair that they pay no taxes while raking in millions that benefit only a very few," Lewis said. "The public is constantly being hoodwinked by their do-good commercials. With our state government in the terrible situation it is, it's just absolutely deplorable that they get away with this."

The proposed measure reportedly is to be submitted in the next week to the California Attorney General's Office for review and summation. Once the wording is approved along with a financial impact analysis, supporters can begin a signature drive. The number of verified signatures of registered voters must be equal to at least 8% of the total votes cast for governor at the last election in order to qualify. At least one million signatures would likely be needed.

The California Constitution, through voter amendments approved in 1998 and 2000, gave Native Americans the exclusive right to operate Nevada-style gambling on their reservations.

Indian tribes have pledged to use all available resources to protect their constitutional privilege.