Posted on 07/27/2008 8:46:55 AM PDT by NormsRevenge
Just a few months ago, images of smiling children, police officers and firefighters filled TV screens and mailboxes across the state, urging voters to support major casino expansions for four Southern California tribes.
Gov. Schwarzenegger and other government officials promised that the tribes would help balance the state's troubled budget with an influx of gambling dollars. The casino riches would help protect state funding for schools, police and fire departments, health care and roads, the tribes and their supporters said.
Voters approved the deals, but recent signs suggest the promises may not pan out. Deals touted as a sure-fire way to help the state weather economic slumps are now struggling themselves.
Some casinos are making less than they did before they expanded. Voters approved a total of 17,000 new slot machines for the tribes, but just a few thousand have been installed. And state officials aren't sure how much of a hit the ailing state budget will take because of the gambling decline.
The Pechanga Band of Luiseño Indians near Temecula announced last week that it is laying off about 400 workers at the Pechanga Resort & Casino, and employees say numerous other people have been fired from the resort in recent months, including many just last week.
Other Indian casinos report drops in business. The Morongo Casino, Resort & Spa near Banning cut 400 to 500 positions this year through attrition. The Fantasy Springs Resort Hotel & Casino near Indio has had attrition-related job reductions, although General Manager Paul Ryan has attributed the declines to seasonal slowdowns in the hot Coachella Valley.
The Agua Caliente Band of Cahuilla Indians, which runs a popular downtown Palm Springs casino and another one in the Coachella Valley, also has felt the economic downturn's effects, Chairman Richard Milanovich said.
The tribal gambling slump comes as lawmakers try to close a $15 billion-plus shortfall between revenue and spending through June 2009.
Gov. Schwarzenegger's May budget revision banked on $446.7 million in gambling revenue in the current fiscal year for a proposed $101.8 billion budget. In addition, the state expects to get $100 million to repay loans from state transportation accounts.
The estimates did not reflect the possibility that an economic slowdown would reduce casino activity and produce less casino revenue for the state, Department of Finance spokesman H.D. Palmer said.
In an interview with The Press-Enterprise on Thursday, Schwarzenegger denied that he and other supporters oversold the deals.
"They have to make decisions, just like we do or like businesses do anywhere else, according to what is the demand," Schwarzenegger said of the tribes. "But I think that the compacts were really solid compacts, and there will be, really, billions and billions of dollars over the next 20 years of additional revenues for the state, which the state needs very badly."
Budget Help
California has had two major rounds of tribal gambling expansion.
In 2004, Schwarzenegger signed new and renegotiated agreements with several tribes, which pay the state's general fund roughly $35 million annually. In addition, about $100 million from the deals is pledged to pay back loans from transportation accounts.
Schwarzenegger negotiated the second set of agreements in August 2006, and opponents put the deals on the February ballot in hopes of stopping the expansion plans. Schwarzenegger and others campaigned aggressively to get the deals passed.
Voter approval gave four Southern California tribes -- the Pechanga, Morongo, Agua Caliente bands in Riverside County plus the Sycuan Band of the Kumeyaay Nation in San Diego County -- permission to add a combined 17,000 slot machines.
Another tribe, the San Manuel Band of Mission Indians in San Bernardino County, struck a similar deal that allows it to add 5,500 slot machines.
The tribes all agreed to share profits from their 2,000 existing machines and their new machines.
Leading up to the Feb. 5 votes on the deals, Schwarzenegger and other supporters predicted they would bring in $9 billion through 2030. Critics, who had put the agreements before voters as four ballot initiatives, argued that the state's take actually could be as little as $3.4 billion.
The first payments are due Thursday. The first payments for the 2008-09 fiscal year, which began July 1, are scheduled to arrive in October.
International gambling expert I. Nelson Rose said the amount of money the tribes were expected to give the state was significant, but never was going to be enough to solve the state's problems.
"The one thing we don't know is how long this is going to be, how long this will delay those projected numbers from coming," said Rose, a professor at Whittier Law School. "Of course they're still making money, and they're just not making quite as much as they projected."
Rose said the amount of money people spend on gambling has always been closely tied to the price of gasoline -- when it costs more to travel to a casino, gamblers are less likely to go.
Rising gasoline and food prices and the crashing housing market, combined with high unemployment rates in the region, are taking their toll on people's entertainment budgets, said John Husing, an Inland economist who has studied the economic impact of gambling for tribes.
"Entertainment is something people do from their discretionary income -- money that they have available to spend on things," he said. "Clearly (casinos) are being affected by that entertainment issue."
Nonetheless, the experts don't see this slump as the end of Indian gambling in the region or a sign that the market has too many casinos.
Economist Alan Meister, who studies the tribal gambling industry, said tribal casinos face the same ups and downs as the rest of the economy.
Meister produced a study earlier this year examining the economics of the Pechanga deal and three others that were up for voter approval on the Feb. 5 ballot. The tribes paid for the report.
"We were looking at a little bit different market than we are now," said Meister, who works for the Los Angeles-based Analysis Group. "It's the luck of when you get into the market. There are things that are out of your control.
"I don't believe that the Southern California market is saturated by any means," he added. "There's room to grow. It just might not be the right time."
I didn’t vote for this last round of casino expansions. When I found out the tribes were dumping huge bucks into efforts to influence what takes place in Sacramento, it really soured me on the whole casino deal.
Initially I had wanted a better life for the Indians on the reservations. I just hadn’t planned on them trying to control Sacramento with those funds.
The biggest revenue for Casinos goes to their owners. Suprise. How about a novel idea like CUTTING SPENDING for a change? We have absolute dopes running this country.
Well there's yer problem right there.
People have less disposable income right now for all forms of entertainment, including gambling. Plus most are in pretty remote locations, and the cost of gas is hurting them. Some are offering free gas or gambling credits to get people to come.
Unfortunately you are correct that the primary beneficiaries of Tribal Gaming are politicians who receive tremendous amounts of cash to sell little communities like mine down the river.
Although there are an estimated 12,000-15,000 Chumash descendants, only 150 receive money from the Chumash Casino. The people who get the checks are the ones who were getting free cheese on the reservation in the 1980s. Most Chumash descendants, like Irish immigrants, assimilated into the mainstream and prospered in very occupations. These people, the hard working Chumash descendants, get nothing.
The people who lived on the reservation in Santa Barbara County were primarily the dead-beats and losers. Now they are still dead-beats and losers but they each get about $500,000 a year for being 25% 'Chumash' and $1,000,000 if they are 50% 'Chumash'. Of course there is no DNA test involved...only the vote of the 'Tribal Council' to determine who is Chumash. Interestingly, the Tribal Council is made up of people primarily from a single family of former free cheese recipients.
The only people benefiting from the Chumash Casino are the 150 check recipients, politicians and coke dealers. The Chumash Casino is a blight on the beautiful Santa Ynez Valley.
This leaves only the least desirable customers, the desperate losers, who come here on a bus, or crowded into old, unsafe autos, hoping to change their luck. We live on the street leading to the Casino and it is a daily parade of criminals into our otherwise lovely little valley.
This is what they said about taxes, bonds, the lottery, casinos, etc. What next? Carbon Credits?
Here in Bangor Maine, the new “racino” has penny and nickle slots. A sure sign of the type of clientel the casino hopes to attract.
We ARE truly doomed if the dumbest among us are running things......
Sadly, all the hard working Californians are going to have to leave and let the place sink. I don't see any possibility of waking up Hollywood and Sacramento to the realities of life.
vaudine
You should set-up a stand that sells 'lucky charms' (not the cereal).
Those folks who play LOTTO would buy'em....
L et
O thers
T ake
T errible
O dds
!
I don't think most people realize the bottom of the barrel types that patronize Indian Casinos. Lots of Government checks get spent in these places.
The last thing I want is a 1989 Chevette with bald tires and 5 illegal aliens stopping at my house.
ROFL!
Schwarzenegger has oversold every single thing he has ever promoted, including himself as a "leader."
Hype Hype Hype !
sadly, One can not govern on Q factor alone... not to mention having a Kennedy in each ear ..
I accidentally pulled into an Indian Casino parking lot a few years ago. I saw 100% low life’s, rolling unsteadily through the dirt lot in a simulanteously enebriated and extremely angry condition; All the more surprising, since it was only 9 in morning!
I was lucky to get out alive.
can you post here where you are getting all of your “facts”?
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