San Diego Business Journal

Three American Indian tribes with reservations in the region are pouring millions of dollars into the campaigns for , and in one case, against , the gaming propositions on the Feb. 5 ballot.

The attitude of California voters toward Propositions 94, 95, 96 and 97 could reshape the burgeoning casino industry in San Diego and Riverside counties.

The four ballot measures ask voters whether four tribes may expand their casinos under new deals negotiated with Gov. Arnold Schwarzenegger. Among other things, each deal would dramatically increase the number of slot machines. In return, the tribes would increase payments to the state.

One measure, Proposition 96, applies to gaming on the Sycuan Band of the Kumeyaay Nation's reservation east of El Cajon. Sycuan wants to increase the number of Nevada-style slot machines it operates from 2,000 to 5,000. The deal, or compact, would boost Sycuan's revenue, though it is hard to say by how much.

The tribes do not disclose how much money their slot machines bring in. Estimates suggest that the 10 American Indian casinos in San Diego County do $2 billion of business a year.

Adam Day, the band's spokesman, says the compact is a multifaceted boost for Sycuan's business. And he argues that it's good for California on a number of levels.

Benefits include more protections for casino employees and patrons, greater environmental protection, as well as a "huge" revenue increase for the state's coffers.

But Robert Smith, tribal chairman of the Pala Band of Mission Indians, doesn't like the compacts.

"I feel the governor could have negotiated a better deal" benefiting all tribes, Smith said. A different deal would also benefit local communities, the environment and workers, Smith says.

The Pala chairman acknowledged that Proposition 94 would enlarge the casino operated by the Pechanga Band of Luise & #324;o Indians, located seven miles to the north. It would give Pechanga 7,500 slot machines, up from 2,000. Pala has 2,250 slot machines.

"There is strong evidence that small and marginal tribal casino operations in the market of these new compacts will be devastated by the unfair competition," said a statement from the Pala tribe posted to its Web site Jan. 24.

"The new method for calculating payments to the state encourages fast expansion that will take business away from neighboring tribal casinos."

An Appeal To Voters

Both sides of the ballot fight are taking their case to the voters with political advertising.

Campaign finance documents filed with the California secretary of state show that by Jan. 24, the Pala band had spent $12.5 million on the campaign to defeat the propositions.

Pechanga has not been sitting on the sidelines. By Jan. 23, the band had spent $41 million on the campaign to pass the propositions, according to the secretary of state's office.

The Sycuan band had spent about $6 million on the campaign to pass the propositions.

The "yes" side had spent $82 million as of late January.

Each proposition applies to gaming on one specific reservation. Proposition 94 applies to Pechanga. Proposition 95 applies to the Morongo Band of Mission Indians, which has a casino near Palm Springs. Proposition 96 applies to Sycuan. Proposition 97 applies to the Agua Caliente Band of Cahuilla Indians, which operates two casinos in Palm Springs.

Sycuan's Day says the new compact increases the tribe's standing with financial institutions by extending casino gaming on tribal lands through 2030. Sycuan's current compact expires in 2020.

Approval is important to the 3,800 employees of the Sycuan casino, its nearby resort and the Sycuan tribal government, Day says.


Technically, the propositions are referendums on compacts negotiated between the governor's office and the four tribes in 2006. Making the matter more legally complicated is the fact that the federal government has already approved the deals between the state government and American Indian nations.

Schwarzenegger has endorsed the propositions, saying they will provide hundreds of millions of dollars to the state without raising taxes. His message comes as California faces mounting deficits on the state budget.

Labor groups, including the Unite Here hotel and restaurant employees union, have contributed to the campaign to fight the propositions. So has the business behind the Hollywood Park and Bay Meadows racetracks in the Los Angeles and San Francisco metro areas, respectively.

Once election results are in, the losing side may mount a legal challenge to the election, according to Randolph Baker, an attorney who heads the Sycuan Institute on Tribal Gaming at San Diego State University.

For example, he says, if the four tribes lose their ballot fights, they may take the issue to court on the grounds that the people may not overturn an agreement between a governor and sovereign American Indian nation.