LA Times Editors back Gov. Schwarzenegger, urge Assembly to approve gaming compacts

May 5, 2007

TAKING A GAMBLE
Let casinos expand
The state assembly should approve the governor's tribal gaming plan to bring more revenue to California.

CALIFORNIA GOT A lousy deal after voters in 1998 and 2000 approved measures allowing Indian tribes to open casinos. The compacts negotiated by former Gov. Gray Davis didn't compel the tribes to give a cent of their earnings to the state. Gov. Arnold Schwarzenegger is working to change that, but the state Assembly is standing in the way.

Last summer, Schwarzenegger struck deals with five Southern California tribes allowing them to expand their gambling operations well beyond their original limits. From 10,000 slot machines, they would be able to install 32,000 — enough to make some of these California gambling palaces far bigger than any Las Vegas casino. In return, they would have to give the state up to 25% of the revenue from the new machines. Opinions differ about how much money this would add to state coffers, but even the most conservative estimate suggests that it would amount to at least half a billion dollars a year within three to 10 years.

Despite that, the Legislature last year declined to approve the compacts. They got the OK last month from the state Senate but still face a tough fight in the Assembly, where Democratic lawmakers fret that the deals don't contain provisions making it easier for workers to unionize and don't allow for enough regulatory oversight.

The former isn't the state's problem — tribal lands are sovereign territories that make their own labor rules — but there's some reason for concern about the latter. Under the terms of the compacts, the California Gambling Control Commission is empowered to perform such critical oversight functions as financial audits on casinos, employee background checks and slot-machine testing. But the underfunded agency has been slow to do the job. Lawmakers upped the agency's budget last year, and as casinos expand they may have to do it again.

The growth of Indian casinos has prompted a lot of worries across the state, some legitimate and some less so. Neighbors whose communities are overrun with casino traffic have a legitimate beef, though they should be pleased with the governor's compacts; while formerly the tribes weren't required to do anything about such local effects, now they have to perform environmental studies and negotiate with local governments before expanding. The casinos haven't ended poverty on reservations, and the revenues they generate haven't been shared evenly, but they have brought hope and economic development to what were once tribal wastelands.

It's time for the Assembly to fold; the compacts are good for the tribes and taxpayers.

• SF Chronicle Editors back Labor, attack Gov. Schwarzennegger's gaming compacts