Prop 48 Casino Gambling: Issues to consider
In 2006 there were 53 tribes operating 54 casinos with Class III machines in California. A Class III license includes all forms of gambling except roulette and certain types of dice games including craps which are prohibited under California State law. Today, 62 of the 109 California tribes own 68 casinos hosting 63,835 slot machines.
Proposition 48 proposes to extend gambling to another Indian reservation in California. The North Fork Rancheria Mono Indians and the Wiyot Tribe want to jointly establish a casino project on a 305 acre plot of land just north of Fresno in Madera County.
It is argued that Proposition 1A, passed in 2000, limited Indian casinos to "original reservation land," but actual wording of 1A limits casino gambling to "federally recognized Indian tribes on Indian lands in California." According to The Indian Gaming Regulatory Act, land acquired by the Secretary of the Interior, in trust for tribal use, qualifies as Indian lands. It turns out this 305 acre parcel is land held in trust.
When considering the issue of whether or not to allow more gambling to yet another Indian reservation, there are other issues to consider.
Indian Casino revenues are not subject to California income or corporate taxes, nor does income tax or sales tax apply to those Indians who live and work on the reservation.
California does not have criminal jurisdiction over acts directly related to Indian gaming establishment; this is left to the FBI.
The California taxpayer might recall that compacts with Indian casinos were intended to increase state revenues and reduce California's structural deficit. But California's deficit is calculated in the $-billions and compact revenue is discussed in terms of $-millions. It is estimated General Fund revenue from this source will be less than 1% of annual state revenue.
In a related issue to Compact revenue, the California Gambling Control Commission (CGCC) has limited authority to monitor and audit tribal operations. The CGCC is limited to no more than four inspections per year of slot machines and official notice must be given prior to inspection.
There is limited access to tribal financial reports or related internal controls over slot machine revenues. There appears to be little or no reports prepared by independent certified public accountants to evaluate and perform risk assessments, or establish internal control reports. There is no provision for CGCC personnel to do interim walk-through audits similar to that of Nevada regulators, nor can audit personnel sit in for 24 hours, 7 days a week as in New Jersey.
In short, the local card room casino probably has greater controls placed on it than these multi-billion dollar Indian casinos.
Prop 48 deserves a "NO" vote. If this State is going to allow Class III casino gambling, why not make this type of gambling legal for all California business investors? Licensing, of course, should require approval by local city or County voters. California would have better control over gambling and local communities just might benefit from increased tax revenue.