War Between States Over Gambling

California proposal could help to shape future of Indian gambling across US.

The Morongo casino, a neon shrine embedded in the sands near this desert town, stands at the heart of a burgeoning civil war over the future of Indian gambling, development, and the quality of life in the American West.

The fight over a California ballot initiative - likely to be the most expensive in United States history - is expected to help settle muddy federal and state policies on Indian gambling. It may also signal, to tribes and to the gambling industry, how much gambling expansion the public will accept.

The players are numerous: Tribes trying to safeguard what they see as their ticket to self-sufficiency, local communities raising questions about morality and quality-of-life issues, and even big-time Nevada gambling interests, who worry that any expansion of Indian casinos in California will cut into their revenue.

The ballot measure is forcing California and Nevada "into key decisions over their very identities for years to come," says California historian Kevin Starr.

"Nevada must decide if it wants to grow up and diversify beyond gambling, while California has to decide how much gambling its communities can healthily sustain - despite the obvious benefits [gambling] is providing for native Americans. There's never been quite a test like this," he adds.

Proposition 5, in effect, would make it easier for California tribes to set up Las Vegas-style casinos, with slot machines that allow more lucrative payoffs than the video-poker games and other machines they already operate.

Proponents say expanded gambling on Indian land will fund schools and bring jobs, economic diversity, and cultural preservation. Opponents say that California would end up with casinos in every area of the state, fueling unfair competition with other establishments, because Indian casinos pay no state taxes and are not subject to environmental, health, and other laws.

For tribes, nothing less than economic survival is at stake. "Income and jobs provided from this casino have allowed us to prosper," says Mary Ann Andreas, chairwoman of the 1,200-member Morongo tribe. "If we lose it, we lose everything."

Reservation renaissance

Since it was built in 1983, Casino Morongo has helped the tribe fuel a reservation-wide renaissance that includes electricity and water supplies, services for elders and children, and plans for long-term business development. If Prop. 5 fails, tribal leaders across California hold that the state will have more latitude to obstruct or dismantle their gambling ventures.

Because of the deep pockets on both sides, the November vote on Prop. 5 is expected to raise the bar for spending on a state initiative, reaching between $70 million and $100 million.

Since Congress in 1988 affirmed the rights of tribes to offer gambling (the Indian Gaming Regulatory Act, or IGRA), about one-third of California's tribes have done so, taking in about $1.4 billion last year. That percentage is on par with the national experience, in which about one-third of 557 tribes across the US have reaped a financial harvest as a result of gambling operations. By US law, tribes must spend their revenue from such activities on functions like government operations, welfare, and economic and charitable causes.

"IGRA said you can offer gambling to support yourself. They did and it's worked," says Dan Pellessier, spokesman for the "yes on 5" campaign in Sacramento.

But Indian gambling has come under attack, here and in several other states, for reasons ranging from immorality and increased crime to questions over taxation, environmental impact, and Indian political contributions. Some governors complain about vagaries in the federal law over how states are to regulate casinos; courts have ruled inconsistently on such disputes, and Congress is debating clarifications.

For all these reasons, many observers believe that the California vote will be paramount.

"What is happening in California is a microcosm of what's happening in the rest of the country," says Kay James, chairwoman of the National Gambling Impact Study Commission in Washington.

The commission is not expected to make recommendations to Congress until after Californians vote.

National ramifications

California's vote "will be a referendum on Indian gambling [from] coast to coast," adds John Dossett of the National Congress of American Indians. "Whatever gets resolved will also change the nature of the debate in Washington." Whatever gets resolved, as with so many Californian ballot initiatives, may also hang on who wins the propaganda war via TV and other ad blitzes.

While most of the "yes on 5" money is from Indian casinos, most of the "no on 5" war chest is from a coalition of Nevada casinos, hotels, and other gambling enterprises.

Because of this, say observers, the vote should force some introspection in both states. "Nevadans have to ask themselves, 'How can we diversify our economy beyond gambling so that we can't be threatened in our very being if someone cuts into our [gambling] income?' " says Mr. Starr.

And, he adds, "Californians have to ask, 'What is the proper limit of this activity within our borders so that it does not disrupt our view of what our communities are about?' "

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