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LWV CA Ed Fund LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND
Nonpartisan Pros & Cons of

Proposition 5

TRIBAL-STATE GAMING COMPACTS. TRIBAL CASINOS.

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Initiative Statute
THE QUESTION

Should the State of California be required to make compacts with Indian tribes permitting specified gambling activities on Indian lands, in facilities owned and regulated by the tribes themselves, with limited state oversight?

THE SITUATION

Thirty-seven of 100 federally recognized Indian tribes in California operate gambling casinos. The casinos directly and indirectly employ 45,000 Indian and non-Indian workers. Games include approximately 13,000 video slot machines. However, the machines are illegal because tribes do not have compacts with the state, as required by federal law. The U.S. Department of Justice intends to seize these illegal machines.

To resolve the question of video slot machines, the Governor negotiated a model compact with the Pala Band of Mission Indians in San Diego County. The compact allows a video slot machine that would operate like a lottery terminal. Each tribe is limited to 199 video slot machines, and no more than 19,900 machines would be allowed statewide. The compact also has provisions regarding casino sites, unionization, and workers' compensation.

THE PROPOSAL

Proposition 5 would:

  • provide a model compact between Indian tribes and the state that sets terms and conditions for gambling on tribal lands
  • require the state to offer this compact on request by an Indian tribe and the Governor to sign it
  • require the model compact to state that specified gambling activities are legal in Indian casinos--video slot machines, card games, lotteries, raffles, and off-track parimutuel betting
  • require gaming tribes to contribute to up to 3 percent of net win to trust funds for non-gaming tribes, to nearby communities, and for statewide emergency medical programs.
FISCAL EFFECT

Gambling could divert revenues to California from neighboring states; but tribes don't pay certain taxes, so some state revenues would be lost. State and local governments would receive a portion of trust funds that could total in the low tens of millions of dollars annually. Overall, though, the Legislative Analyst says "…on average, each dollar spent in tribal operations generates less tax revenue than an equivalent dollar spent in other areas of the California economy."

SUPPORTERS SAY

  • This would help California's Indians to be self-reliant.
  • California would benefit economically from hundreds of millions of dollars that would be spent in gaming in this state rather than in neighboring states.
OPPONENTS SAY
  • Tribes already have the right to operate casinos on their lands.
  • Indian casinos pay no taxes on winnings and would be exempt from most of California's environmental, health, safety, and worker protection laws..
(Analysis prepared by the League of Women Voters of California Education Fund.)

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Last updated: September 3, 1998
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