Greed tars Indian casinos
Wednesday, July 31, 2002

David Lazarus

Pretty interesting that a federal judge ruled the other day that Indians do indeed have a monopoly on casinos in California but that this isn't a violation of the law.

"With this legal challenge behind us, California Indian tribes can continue on our path to self-reliance," an Indian casino organization said in a statement.

Well, I suppose I back Indian self-reliance as much as the next person — God knows these people have had it rough over the years. But I wonder if breaking long-standing covenants against monopoly power is the right way to do it (no matter how sovereign the land in question).

I mean, who wouldn't prosper if granted a monopoly over a highly lucrative and desirable product? Even George W. Bush could make money under such circumstances.

Moreover, it seems increasingly clear that the intent of California voters in approving Indian casinos — helping tribes get a leg up — is being subverted by a free-for-all mentality among non-Indian developers looking to cash in the state's gambling boom.

Take the situation in Yuba County, just north of Sacramento. An Illinois company called Forsythe Racing contracted to develop a $100 million auto raceway in the area. But the project never managed to get going.

Then, earlier this month, Forsythe officials appeared before county supervisors to say that they've suddenly become pals with a landless group of Indians known as the Estom Yumeka Maidu Tribe and are ready to spend $90 million on a new casino where the racetrack would have gone.

"They shopped around for an Indian tribe so they could make some money," said Cheryl Schmit, director of Stand Up for California, a Sacramento-area group seeking increased regulation of Indian casinos. "It's a total abuse of the system."

Perhaps it shouldn't be surprising that Indian tribes, which have lobbied state lawmakers so aggressively for gambling privileges on tribal land, are now turning California's capital into casino central.

Multimillion-dollar casino projects are under way in Placer and El Dorado counties, while the operators of the Cache Creek casino in Yolo County want to triple the size of the facility and put up a six-story hotel. Yet another casino is planned for West Sacramento.

"This isn't what California voters approved," Schmit said. "Sure, we want to help Indians, but this isn't about that. It's about greed."

Proposition 1A, passed in March 2000, changed the state Constitution to allow tribes to operate casinos on reservations. The idea, in theory, was that a modest gambling business would allow Indians to generate sufficient funds to revitalize themselves.

California now leads the nation in Indian-casino wealth, with 46 gambling establishments generating about $5 billion in annual revenue.

None of that money, however, is returned to surrounding communities in the form of local or state taxes, even though an Indian casino relies on taxpayer-maintained roads, transportation, sewage systems and law enforcement.

Kent McClain, the Yuba County administrator, said negotiations will begin soon on Forsythe's plan to build a casino on behalf of the previously obscure Estom Yumeka Maidu Tribe.

The basic issue, he said, is how the county can be guaranteed a cut of the tribe's action.

"Essentially, this would be between a local government and a sovereign nation," McClain observed. "How do you enforce something like that?"

Northern California card clubs believe that the Indian casinos should not receive special treatment and that the gambling business should be open to all.

They sued for the right to operate their own casinos under the equal protection clause of the 14th Amendment, arguing that the state is obliged to either shut down tribal casinos or allow others to offer Vegas-style gambling.

But U.S. District Judge David Levi ruled Monday that California's Indian-casino statutes do not violate the constitutional right to equal protection.

He said that while Indians do indeed have a monopoly on casino gambling in California, the state was within its rights under federal law to grant tribes special privileges.

Bill Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, called the judge's decision "an interesting interpretation of the law." He predicted that the case will eventually make its way to the U.S. Supreme Court.

Eadington said Indian casinos, no matter how well-intentioned, are today a big business rather than a state-sanctioned welfare program. No one should be surprised, he added, that small tribes are suddenly best of friends with out-of-state developers.

"Nevada sees about $10 billion in annual gaming revenues," Eadington said. "In just two years, California has reached half that amount. California will surpass Nevada at some point, probably in the not-too-distant future."

Indeed, he estimates that California now has about 60,000 slot machines — by far the most popular (and addictive) form of gambling. If the industry grows as expected, Eadington said this number could swell within just a few years to as many as 350,000.

Is that what voters approved, making California the slot-machine mecca of the United States?

Indian self-reliance is a good and worthy goal, and the state should be actively involved in bringing it to fruition. Giving tribes a virtually free hand to develop casinos is not the answer.

California officials can turn things around next year when the state renegotiates its gambling compacts with tribes. After several years of unchecked growth, it's time to impose prudent limitations on the casino industry.

But with Indian casinos throwing plenty of money around in Sacramento, anyone want to bet on how things will turn out?

David Lazarus' column appears Mondays, Wednesdays, Fridays and Sundays. Send tips or feedback to dlazarus@sfchronicle.com.

NIGA responds to SF Chronicle

The truth about Indian gaming

It's as if the fist-pounding anti-Indian activists of every community have come out of hiding with a specific agenda to blast Native Americans under the guise of being against gambling. You would think that Native Americans were the Gordon Gekkos of modern times, flying around in Lear jets, clutching sacks of cash, ready to corrupt the world. That image couldn't be further from the truth, but the truth is hard to find in commentary about Indian gaming.

Take "Greed tars Indian casinos" (Chronicle, July 31) for example. You don't need to look further than the headline to grasp the columnist's viewpoint: Why is it that when people talk about working toward financial goals for future generations, it's called "the American dream," but when it's applied to Native Americans, it's considered greed?