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Gambling Expected to Grow in California

LOS ANGELES, California – As reported by the New York Times: "Gov. Arnold Schwarzenegger warned this week that approval of two state ballot proposals allowing a significant expansion of casino gambling would turn California into "the gambling capital of the world."

"But even if the proposals fail - as is widely expected - casino-style gambling will remain one of the fastest-growing businesses in California. At the current rate of growth, the profits from gambling in California will soon rival that of Nevada.

"The battle over one of the ballot propositions pits Indian tribe against Indian tribe over the pace and terms of gambling expansion. Two alliances of tribes have already raised more than $50 million for competing campaigns over the future of their lucrative casinos. At the same time, the tribes are working in parallel to defeat a second ballot proposal, known as Proposition 68, that would allow racetrack and card club owners to install 30,000 slot machines at tracks and gambling halls, effectively ending the Indians' monopoly on Las Vegas-style casino gambling in California.

"…The tribes, recognized as sovereign nations by the federal government, now pay no state taxes but contribute about $130 million a year to pay tribes in California that do not have gambling operations and to reimburse cities and counties for the costs of providing public services around the casinos.

"The current compacts, approved by former Gov. Gray Davis and ratified by the voters in 2000, limit each tribe to 2,000 slot machines and expire in 2020. But even under those limitations, gambling at flashy new casinos on Indian reservations has exploded in the past four years, with net revenues now approaching $6 billion a year. In Nevada, where gambling has been legal for more than 50 years, the annual profits are about $9 billion…"

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