Writing in Around Dublin, the East California online media, John M. Zukoski, certainly makes a lot of sense on the issue of looking for ways to resolve the Golden State budget deficit, and on the matter of desperate times needing desperate measures, it would only be a sensible solution if the State were to consider “granting special licenses to private casino operators in California to help make up for the revenue shortfall.”
Zukoski’s proposition stems from the fact that the State of California is set to lose over US$360M in the current year from Native American tribal casinos, as a consequence of the U.S. Supreme Court’s refusal to hear an appeal to a California court decision that voided the State’s profit-sharing arrangement with tribal casinos.
The appeal denied by the Supreme Court deals with the Rincon Band of Luiseno Mission Indians’ petition to the California court system, contested the finding by the court that California’s “mandated profit-sharing arrangement with the State’s tribes was simply a tax,” and US States are prohibited from taxing Native American tribes and reservation inhabitants.
The Supreme Court decision is a major setback for the State of California’s 2011-2012 State budget, as it opens the door for tribes to reduce or eliminate their profit-sharing with the State, with sums upwards of US $360M. Governor Jerry Brown and the California legislators balanced the budget by assuming that US $8.3 billion of additional revenue would flow into the State coffers from Indian casino profit-sharing as well as the product of an improving economy.
As it is, tribes could continue making payments to local communities for basic services such as road maintenance, law enforcement, and fire protection, but they can now stop any profit-sharing agreements with the State. Such loss of revenue would force Governor Brown either to sue the tribes or to consider
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more drastic actions such as issuing licenses to private operators to setup casinos in California cities like Dublin, with the development of more resort-styled hotels and casinos similar to those in the State of Nevada.
The State of California already allows for gambling on pari-mutuel games such as horse races and “games of skill” like poker; however, “games of chance” such as slot machines and keno are not yet allowed. The threat to legalize full-service casinos by the State of California alone may deter the tribal casinos from playing hardball.
As in a game of poker, the tribal casinos or California could raise the ante or up bet, and whether the former can reduce their payments to the State, the latter can also recover the lost revenue by cutting funding to local governments that receive direct payments from the tribal casinos, so that those municipalities would be forced to raise the fees for the services they provide to the Native American tribes and its casinos.
As no one blinks just now, and legislation for online gambling gets ever nearer, California can ponder on the aspects of looking at full casino legalization in an effort to find money wherever it can. It may not be time for the ‘Desperation Stakes’ yet, but neither the State nor the tribal casinos want to wait for the fifth card in the dead man’s hand, because its value is as elusive as the sources on Wild Bill Hickock’s legendary Full House. (E-08.02.11)
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