A gambling problem

Let’s face it: California has a gambling problem. Gaming in our state has grown too quickly, with too little accounting of the impacts. With gaming money now dominating our politics, we’re still ready to embark on what critics have dubbed “the biggest expansion of gaming in U.S. history.”

Since casino-style gaming on Indian reservations was legalized in 2000, California has quickly become the nation’s biggest Indian-gaming state, with casino revenues reaching $7.6 billion last year—$1.6 billion more than Las Vegas. With 58 casinos currently operating in the state, applications are pending for 29 more, and 67 tribes are seeking federal recognition that would make them eligible to apply. (In fact, critics allege that several of the tribes are seeking recognition solely for the purpose of getting into the gaming business.)

Meanwhile, Gov. Arnold Schwarzenegger is backing a plan to increase by 30 percent the number of slot machines permitted, setting off a political battle that will likely break records for campaign spending. The governor’s compact, approved last year by the Legislature, allows five of the state’s wealthiest tribes to install as many as 17,000 additional slot machines—roughly the equivalent of six more Vegas-sized casinos—but is being challenged by horse-track owners, a casino workers’ union and two tribes (including the local United Auburn Indian Community), who have collected more than 700,000 signatures to put the matter on the February primary ballot.

Tens of billions are at stake, and no one knows this better than the governor and our legislators, who have watched the gaming tribes become high-rolling political contributors to both parties, joining the ranks of the state’s most powerful special interest groups. Schwarzenegger is touting the plan as a way to close California’s budget deficit, claiming the compact would bring in $500-700 million annually. That may sound like a good deal, until you consider that the agreement is worth an estimated $60 billion to the five tribes, and that California would be taxing them at a much lower rate than many other states. The governor really needed to drive a much harder bargain and, if only for that reason, the compact should be rejected.

But there are other important factors California should consider before sponsoring further expansion of Indian gaming. According to a recent report by the state Legislative Analyst’s Office, gaming funds are poorly regulated, with many tribes offering only limited access to financial reports, and gaming profits have gone to only 9 percent of the state’s Indian population. And there are the larger social issues surrounding gambling: Numerous studies have shown a link between increased gambling opportunities and increased prevalence of problem gambling, which in turn is linked to social problems including substance abuse and domestic violence.

These are issues that need to be addressed before the state even considers adding more slots or casinos. Voters should reject the governor’s compact, and urge state legislators to sponsor a comprehensive study of the social and financial impacts of increased gaming before any further expansion.