California goes for the gaming gold

Just as we suspected he would, California Gov. Arnold Schwarzenegger is succumbing to the lure of easy money from expansion of Indian gaming in the Golden State.

Schwarzenegger campaigned as a skeptic of Indian casinos and complained about the amount of money and influence gaming-backed tribal leaders were able to spread in Sacramento.

But it was easy enough to see his long-term strategy: Get in better position to negotiate a large share for state and local government from the revenues generated by the casinos. With the kind of budget deficits California faces, the fruit was just too tempting.

Northern Nevadans should get ready for an announcement of the biggest California casino yet - a Bay area slot palace by the 259-member Lytton Band of Pomo Indians. The Los Angeles Times describes it as the size of five Costco stores, with up to 5,000 slot machines.

Here's the vigorish: a 25 percent cut of gambling profits to the state. One estimate puts the annual revenue to the state at $125 million. And the 32,000-population city of San Pablo, where the slot hall would be located, would get additional millions.

A 25 percent cut would be the same amount Indian casinos pay in Connecticut, site of the country's largest casino. It would be significantly more than the 15 percent other tribes pay in California. (The highest rate in Nevada is 6.75 percent, but it is charged on gross gaming revenue, a much larger figure than profits.)

The only positive outcome from Nevada's point of view is that Schwarzenegger's deals with tribes may cut into support for Proposition 68, a ballot question in California that would expand slot-machine gaming beyond Indian tribes.

But if anybody thought this governor would play the Terminator to the spread of casinos in Nevada's neighboring state, they underestimated the siren call of coins falling into the coffers of government


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