Tribes bet big on gaming deals

SACRAMENTO -- For all the money presidential hopefuls might spend to win California's February primary, far more may be bet on a lesser-known battle to expand Indian gambling.

Four wealthy Southern California Indian tribes are preparing to spend as much as $80 million to defend deals they struck with Gov. Arnold Schwarzenegger and the Legislature.

The deals would give the tribes 17,000 new slot machines -- enough to fill eight Las Vegas-size casinos. In exchange, they would share profits with California's cash-strapped general fund, which faces a multibillion-dollar deficit.

The tribes -- the Pechanga Band of Luiseno Indians near Temecula, the Agua Caliente Band of Cahuilla Indians in Palm Springs, the Morongo Band of Mission Indians near Cabazon and the Sycuan Band of the Kumeyaay Nation near San Diego -- already have contributed more than $44 million to promote their compacts.

Tribal leaders say they're convinced the deals will be a winner with voters, but they're not taking any chances. Opponents have put four referendums on the Feb. 5 ballot to overturn them.

The tribes are expected to add tens of millions of dollars to their campaign in the coming weeks and have purchased so much commercial air time that some political analysts say it could cut into the number of presidential ads voters see before the election.

Despite the onslaught, an unlikely band of opponents believes it can stop the tribes.

A racetrack owner, competing tribes and a casino-workers' union pooled their money for a signature-gathering drive to put the deals on the ballot. They're banking on an Indian-gambling backlash and say they can convince voters the deals aren't nearly as sweet as they sound on TV.

The group has raised $9 million but already spent nearly half that, mostly to qualify the referendums, which will appear on the ballot as propositions 94-97.

Despite the lopsided fund-raising, a recent Field Poll of likely primary voters showed supporters of the tribal gambling compacts only narrowly outnumbering opponents. Nearly one in four voters remains undecided.

"I think it's a real tossup," said Bob Stern, president of the Center for Governmental Studies in Los Angeles. "The 'no' side has a real advantage because people are naturally inclined to vote against controversial measures, but the 'yes' side, with the tribes, has a significant fiscal advantage."

The tribes have been using that advantage to promote their message -- that the deals can help California with its fiscal crisis.

The state faces an estimated $10 billion to $14 billion shortfall, largely because of falling revenue from the meltdown of the housing market and increased spending. Schwarzenegger has promised to declare a fiscal emergency next month, likely triggering budget cuts.

The tribes have blanketed TV airwaves from Sacramento to San Diego in recent weeks with ads promising the gambling deals can help. They say the compacts will generate $9 billion for the state over the next two decades, although opinions differ about just how much money the state will receive.

Under the deals, the four tribes would increase the minimum amount they pay annually to the state from $76 million to more than $131 million, combined. They also would pay the state 15 percent to 25 percent of their profits on most new machines.

The Agua Caliente and Sycuan tribes would be allowed to increase the number of slot machines they operate from 2,000 to 5,000. The Morongo and Pechanga tribes would be allowed to more than triple -- to 7,500 -- the number of slot machines they operate.

How much the state would take in is up for debate.

The state's nonpartisan legislative analyst, Elizabeth Hill, issued a report late last month saying California will initially get less than what the ads suggest.

The ads and the governor's finance team have said the state will get about $400 million annually until 2030.

Hill calculates the compacts will produce about $120 million for the current budget year and an additional $280 million next fiscal year.