Washington state being lured by casinos

During a recent six-week sojourn in my old hometown of Seattle, I learned that Washington Gov. Gary Locke, like California's Gray Davis, is eyeing expanded Indian gaming as a way of solving the state's huge budget deficit.

But if I were in their shoes, I'd look elsewhere for additional revenue, and I'll tell you why.

In 2001, the state of Washington earned nearly $1 billion from Indian gaming, which doesn't mean that tribal casinos are paying their fair share of state and local taxes. They aren't!

The 27 tribes that operate casinos in the Evergreen State say they have created 14,000 jobs, many of them filled by non-tribal members, and argue that gambling proceeds have done a lot of good for impoverished native American communities. But the truth is that the gaming tribes contributed only $60,000 to charitable activities in 2001, representing a minuscule portion of their gross revenue.

And now, the non-tribal Washington Entertainment (a euphemism for gambling) Industry Coalition wants to compete with Indian casinos by asking the state legislature to authorize up to 25 video slot machines in each of 9,000 bars, charitable organizations, lounges and clubs in the state. Another 2,800 video slots could go to the top 40 bingo parlors and another 7,000 would be authorized for card rooms and racetracks under the Coalition's proposal.

That would put the state of Washington -- which sends thousands of tourists to Northern Nevada each year -- into the legal gambling business in a big way.

Opposition to the expanded gambling proposal was immediate and fierce. "Gambling money is the crack cocaine of government finance," warned the Seattle Times in an editorial. "If the State Legislature expands gambling this session, lawmakers will do it again -- and again."

"If we buy into this, the state is the problem gambler," wrote Times columnist James Vesely. Under the Entertainment Coalition's proposal, the state would receive 20 percent of gambling proceeds and local governments would collect 5 percent. Another 5 percent would go to help problem gamblers.

"How thoughtful," the Times commented, "a corrosive substance that comes with a pair of gloves."

The Times urged Washington lawmakers to resist the lure of "easy money." Meanwhile, in California, the New York Times reported that Gov. Gray Davis "has cast a covetous eye on a gushing revenue stream just beyond his reach": Indian gaming.

"While California's 50 tribal casinos took in an estimated $5 billion in profits last year, only a sliver of those riches went to the state," the Times noted, adding that a huge expansion of tribal gaming "could starve Nevada casinos of billions dollars." In the Times' opinion, such an expansion "would amount to doubling down on an already bad bet."

Davis seeks to renegotiate agreements with California tribes that could result in an additional $1.5 billion in gaming revenue. "You're talking about expanding an industry that has a significant social effect on the public without any regulation or oversight," warned Cheryl Schmidt of Stand Up For California, an anti-gambling group. "That $1.5 billion is scary to me because it means a huge expansion. We are a scandal waiting to happen." No kidding!

In a two-part investigative report last December, Time magazine said tribal gaming is virtually uncontrolled and unregulated by the National Indian Gaming Commission, which is "understaffed, underfunded, underperforming and undersupervised."

The Commission has exactly 63 employees and an $8 million budget to monitor a $12.7 billion all-cash business at more than 300 locations throughout the country. By contrast, the New Jersey Casino Control Commission has a $59 million budget and 720 employees to police 12 casinos in Atlantic City that gross approximately $4.2 billion per year.

In its report, titled "Wheel of Misfortune," Time commented as follows: "Imagine, if you will, Congress passing a bill to make Indian tribes more self-sufficient that gives billions of dollars to the white backers of Americans living in poverty. Or a bill that allows select Indian tribes to create businesses that reap millions of dollars in profits and pay no federal income tax -- at the same time that the tribes collect millions of dollars worth of aid from American taxpayers."

Among the "white backers" of Indian gaming are Nevada's own Harrah's Entertainment and Station Casinos of Las Vegas, which plans to operate a huge "Nevada-style" casino at Auburn east of Sacramento.

I wonder why the Nevada Gaming Commission continues to license Station Casinos when its Auburn club will compete directly with struggling Reno and Lake Tahoe casinos, making it clearly "inimical to the best interests of the people of the state of Nevada" (Gaming Commission Regulation 5.010). How can the Commission and state Legislature continue to ignore an "unsuitable" (the Commission's word) form of operation by Station Casinos? After all, we know that Northern Nevada casinos suffered massive losses last year due to Sept. 11 and the proliferation of Indian gaming in neighboring California. For that reason, Station Casinos should be forced to choose between its Nevada and California operations -- one or the other, but not both. But don't hold your breath; Station is a major campaign contributor and the Gang of 63 isn't inclined to bite the hand that feeds it.

-- Many thanks to those of you who sent condolence messages following the untimely death of my beautiful wife, Consuelo (consolation, in English), in Seattle on Feb. 12. Our two children, Guy and Maria, and I are deeply grateful for your moral support and your prayers during the most difficult time of our lives.

Guy W. Farmer, a semi-retired journalist and former U.S. diplomat, resides in Carson City.