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Tribal Warfare 

It’s Indian vs. Indian with Arnold in the middle, as the fight over the flood of money from reservation casinos heats up

Thursday, Sep 30 2004
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Not too shabby for a few dozen folks whose ancestors, according to the official tribal history, “dwelled along the waters of Cache Creek in the serene Capay Valley and thrived off the bounty of the land.”

After two centuries of tough times, the official history continues, “the tide is beginning to turn for the members of the Rumsey Band of Wintun Indians.”

Tide? More like tidal wave. Today, in California, if you’re a member of one of the tribes that operate a casino, at least on the scale of Cache Creek, well, then, to paraphrase Mel Brooks, it’s good to be an Indian. Very, very good.

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The rise of the Rumsey perfectly parallels the story of the other 25,000 California Indians who belong to the 54 tribes that currently operate a casino — about 10 percent of the state’s total Native American population.

While dozens of states now host Indian casinos, nowhere is the concentration greater than in California. Though some of the casino-owning tribes have as few as 13, or in one case seven, members (the average is 140), the industry now takes in about $6 billion a year and employs more than 43,000 workers. Because each tribe has sovereignty, the books are closed and the exact amount of revenue isn’t known.

But the Indian gambling boom is just beginning. One leading tribal chair predicts that within five years, California casino revenues will surpass those of Nevada’s — currently about $9 billion. Some industry analysts predict that in the immediate future, California gambling income will as much as quadruple. The current fleet of 60,000 slot machines might expand to 350,000 — one for every 100 Californians. Some Las Vegas gambling brand-name corporations — like Harrah’s and Caesars Entertainment — that once tried to sink Indian casinos in California are now partnering with them.

Ruling class: Chairwoman Paula Lorenzo, and her domain (Photos by Steve Yeater)

When Californians voted, twice in the last six years, to grant Indian tribes a monopoly on Vegas-style gambling, they did so convinced that, after being subjected to institutionalized injustice and marginalization, Native Americans deserved a chance to be “self-reliant.” At least, that was how the casino legalization was pitched to the public. Few voters, if any, realized, or could know or even imagine, that they were also giving birth to the fastest-growing industry — and fastest-growing political lobby — in California, one likely to shape the state’s destiny, economy and politics for decades to come.

Indian tribes that had already tasted, albeit in limited fashion, the economic benefits of operating small card rooms and bingo parlors, and were angry with Governor Pete Wilson, who opposed widespread gambling, spent $67 million in 1998 to persuade state voters to approve Nevada-style reservation-based casinos and to lower the gambling age to 18.

The California Supreme Court quickly overturned the measure, known as Proposition 5 — but the Indians were hardly defeated. The major gambling tribes then came together with newly seated Governor Gray Davis, upon whom the Indians lavished generous political contributions, and who, over the course of 16 harried and hurried days, drafted a round of 58 formal gambling agreements known as “compacts.” The framework established by Davis was supposedly to contain California gaming by giving the tribes a 20-year monopoly on casinos and limiting each tribe to a maximum of 2,000 slot machines.

Some states, like Connecticut, exact as much as 25 percent in return payments from Indian casinos. (As sovereign nations, Indian tribes cannot be formally taxed.) But anxious to maintain the Democrats’ cozy relationship with the tribes, Governor Davis negotiated compacts that demanded no return payments from the tribes to the general state fund.

The Davis compacts were so hastily drawn, so scant in their regulation and so economically undemanding that New York Governor George Pataki once quipped that California was the example of how not to manage Indian gaming.

Against little opposition, and fueled by $28 million in tribal funds, Proposition 1A sailed through in 2000, approving the Davis compacts, and dozens of tribal casinos snapped open like popping corn throughout the state, bestowing not only a tremendous fortune on their tribal operators, but also the kind of awesome political clout that only money can buy.

And with California today poised to become the gambling center of America, everyone wants a piece of the action. Governor Schwarzenegger and local communities want a “fair share” of gambling revenues. Big Labor wants to unionize the casino work force. And Indian tribes want more slot machines and more casinos. “Who would have thought we Indians would someday be at the center of California’s political universe?” wisecracked one Coachella Valley tribe member. “Yet here we are, and we ain’t leaving. That’s the surest bet.”

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