THE CASINO NEXT DOOR
Schwarzenegger's new casino pact has tribes pushing for urban gambling.
By Annette Stark

http://www.lacitybeat.com/cms/story/detail/?id=1188

Schwarzenegger's new casino pact has tribes pushing for urban gambling.
It took only a week for the Garden Grove City Council to shoot down a proposal that would have set up gambling next door to Disneyland. Last week, the council voted unanimously (5-0) against selling an estimated 45-acre parcel on Harbor Boulevard - just a few blocks from Disneyland - to the Mesa Grande Band of Mission Indians. It was widely reported that the tribe was planning to build a Vegas-style entertainment strip in partnership with Vegas mega-developer Steve Wynn.
The news came amid a flurry of media coverage about urban gambling. First, there were Propositions 68 and 70, two gaming initiatives on the November ballot that, if passed, will create more gambling venues on and off the reservations. Then, in a startling revelation September 1, the Associated Press reported that Sacramento Kings owners Gavin and Joe Maloof organized a $1 million fundraiser for the Schwarzenegger campaign even though their brother, Vegas power broker George Maloof, was in partnership with the Lytton Band of Pomo Indians to build a mega-casino in the heavily populated Bay Area suburb of San Pablo. George Maloof runs the family's posh casino resort in Vegas, The Palms.
Just the week before, the Schwarzenegger administration had suspended support for the San Pablo deal with the Lyttons, one of five tribes who had agreed to forge new compacts with the state exchanging unlimited slot machines for extra revenues paid to the state. The legislature had already approved compacts with the other four tribes, but on August 31 turned down the governor's deal with the Lyttons.
Some had been saying that the San Pablo and the Garden Grove casinos were proof that the governor was caving in on urban gaming, a complete reversal of his prior position that casinos in urban areas - as opposed to Indian casinos isolated on the reservations - were bad for California.
But it seems the governor's withdrawal may have been heading off other problems. Both the governor's office and the Maloofs claim the fundraiser was done before any San Pablo deal was in the works. Schwarzenegger's critics say this is money taken indirectly from Indian gaming interests, a harsh contradiction to his election promise not to take money from special interest groups.
"He's flip-flopped on a lot of things, but we didn't need him to oppose this," says Garden Grove Mayor Bruce A. Broadwater about their casino deal. "The council vote was five to zip."
Broadwater claims he isn't familiar with Proposition 68, which would expand commercial gambling to urban areas by allowing card rooms and racetracks to feature slot machines, or Proposition 70, which would allow the tribes more Vegas-style games and unlimited slot machines. He also says he was unaware of the statewide debate that is currently raging around the future of Indian gaming and isn't sure it's fair to restrict gambling to just the tribes. However, he did know that, in Garden Grove, where he's lived for 33 years, "the forces that would oppose [the casino] would be horrendous.
"We worked hard to clean that area up," Broadwater continues. "The drugs and prostitution was horrendous. And I just couldn't see us going downhill again. Garden Grove is not even a half-mile from the main gate of Disneyland, so Disneyland would oppose it. And there's no way the governor would go against Disney."
In other towns, citizens are slightly more keyed-up about the gaming debate, with concerns mounting that California is about to bite off more gambling than it can digest.
In a recent wave of commercials designed to defeat Prop. 68, Indian gaming tribes remind Californians about their long-held conviction that Indian gaming is a safe bet as long as it stays on the reservation. But the Garden Grove situation, some argue, presents a different side to that story, which is that any tribe that cuts a deal with the governor for unlimited expansion would have the financial incentive to expand beyond the reservation. Critics are saying that his attempts to reduce the state's fiscal crisis by tapping into tribal-casino wealth have opened a huge can of worms.
From his first days in office, Schwarzenegger has taken a hard-line position against urban gambling (Vegas-style casinos in congested communities) and has promised to campaign hard against Prop. 68, which would allow card clubs such as Larry Flynt's in Compton to have slot machines. But while the governor hasn't said anything to indicate he's changed his mind on this issue, many argue that these newly signed compacts give the tribes a blank check.
In San Pablo, the Lytton Band is trying to build a plush gambling facility right in the heart of a congested, working-class neighborhood in the San Francisco Bay Area.
"It's certainly pragmatic money he wants, and he's come upon Indian gaming to get it. He's doing a flip-flop. He's not being a moralist; he's being a politician," says Bill Thompson, a University of Nevada professor and gambling authority, who has been retained by some of the tribes to fight Prop. 68 and, until recently, supported the governor in much of this debate. "Which is okay, except that he's abandoning the California tradition he supposedly admires in Ronald Reagan. Or even Jerry Brown."
Calls to Schwarzenegger's office for comment were not returned.
Reports about the size of the San Pablo casino have changed. Two weeks ago, The San Francisco Chronicle reported that the Lytton tribe was planning to have "the nation's third largest gambling emporium" - a six- to eight-story casino with up to 5,000 slot machines - something that their compact for unlimited slots had guaranteed - but local opposition got it scaled back to 2,500 slots and a smaller facility.
And, while many local legislators balked, the prospect of potential job growth caused some, including Oakland Mayor Jerry Brown, to express cautious interest. (The San Pablo casino would have been located 15 miles outside Oakland.) San Pablo mayor Barbara Vigil indicated in The Chronicle that she would sign off on it. "I absolutely think it's a step in the right direction ... . If it's scaled down, everybody can live with that."
Right now, it looks like they won't have to. Schwarzenegger's team pulled back, and then the legislature voted to put the deal on hold. But the provisions in the compacts and the legalities about withholding the deal from any one tribe could mean that the Lyttons would be able to bring a federal petition and eventually prevail.
While a majority of Californians continue to support Indian gaming, including Prop. 70, which would allow for unlimited expansion of Vegas-style games in reservation casinos, critics insist that urban casinos are a different beast. The negative effects of placing slot machines smack in the middle of a working-class community such as San Pablo, they say, would be tough to mitigate. In addition to increased law-enforcement problems, easy access to gambling has been shown to produce gambling-addicted locals.
Though Thompson has been a strong supporter of gambling by tourists on vacation, he's been a longtime opponent of urban gambling, citing examples of the deleterious effects that these casinos have had on the working class and retirees on fixed incomes living in Vegas. (He recently addressed the urban-casino debate still raging in Pennsylvania in a Washington Post editorial.) "You just get more locals playing, which is bad," Thompson says. "The average American loses three hundred dollars a year gambling, but in Vegas, the locals lose three times that. That's why the tribes are opposing Flynt. And since this is why I'm working with them and it's the entire basis for my opposing Flynt, I'd feel a lot better if the tribes would clear it up."
Published: 09/02/2004