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Election 2014 FAQ: Prop 48 — Indian gaming compacts

A patron plays a slots machine Friday, Oct. 22, 2004, at the SPA Resort Casino in Palm Springs, Calif. Proposition 70 would remove the 2,000-per-tribe cap on slot machines and also allow tribes to operate Las Vegas-style games currently banned in California, including roulette and craps. In return, casino-owning tribes would give the state 8.84 percent of their net income from both slot machines and table games. Though promoters predicted they would lose at the polls and ended their campaign earlier this month, the initiative will remain on the Nov. 2 ballot. (AP Photo/Damian Dovarganes)
Damian Dovarganes/AP
In this file photo, a patron plays a slots machine Friday, Oct. 22, 2004, at the SPA Resort Casino in Palm Springs, Calif. Proposition 48 would allow the North Fork Rancheria of Mono Indians to establish a new casino with up to 2,000 slot machines in Madera County.

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Proposition 48 is a referendum on Assembly Bill 277, a bill passed by the legislature in June 2013 to approve gaming compacts between the state and the North Fork Rancheria of Mono Indians and the Wiyot Tribe. It was placed on the ballot by voter petition and gives voters the final say in whether to approve or reject the compacts.

Who's behind this ballot measure?

Cheryl Schmit, director of the gambling watchdog group Stand Up for California, was the proponent behind Prop 48.

When voters approved Prop 1A in 2000, they modified the state constitution to allow Indian tribes to operate casinos on Indian land, subject to compacts that must be negotiated by the governor, ratified by the legislature and approved by the federal government.

Schmit’s organization has opposed casino projects in the past, though it does not oppose Indian gaming outright. It claims instead to advocate for close collaboration and input from the various stakeholders — non-Indian citizens, counties, tribal governments. It also argues for stricter regulations, including patron and employee protections, environmental protections and mitigation agreements with local governments affected by the presence of casinos.

That said, Schmit has resisted attempts by the North Fork Rancheria to open its casino in Madera County since at least 2011, arguing that the project represents an attempt to get around federal and state laws to create an off-reservation casino in violation of Prop 1A.

Prop 48 represents an attempt to overturn AB 277 and stop the casinos from being built — in effect, a people’s veto. But because of the way referendums are phrased to voters, a “yes” vote allows AB 277 to stand and a “no” vote repeals it (more on this later). Therefore, Schmit is campaigning against Prop 48.

What will it do?

If approved, Prop 48 would:

  • Allow North Fork to conduct gaming on their tribal lands and build a casino with up to 2,000 slot machines. The approved site is near a number of other tribal casinos, including Chukchansi Gold Resort & Casino, Mono Wind Casino and Table Mountain Casino.
  • Exempt state and local agencies assisting with construction from requirements of the California Environmental Quality Act.
  • Prohibit the Wiyot Tribe from building a casino out of concern over the potential environmental impact on the nearby Humboldt Bay National Wildlife Refuge.
  • Grant the Wiyot Tribe, in exchange, 2.5 percent to 3.5 percent of the annual slot revenue from the North Fork casino — an estimated $6 million a year over the 20 years of the compact.
  • Require North Fork to pay an estimated $15 million annually into the Revenue Sharing Trust Fund (RSTF), which distributes money to the 73 federally recognized tribes in the state that either have much smaller casinos or none at all. Would also require North Fork to make payments totaling an estimated $1.5 million a year to the state’s Special Distribution Fund (SDF) — mostly to cover regulatory expenses and the costs of problem gambling — and to Caltrans for transportation-related services.
  • Require North Fork to make payments to local governments to offset the potential impacts of a casino in the surrounding community — these include:
    • County of Madera: One-time payments of $6.9 million to $17.9 million and annual payments of $3.8 million, adjusted each year for inflation. Plus a goal of hiring 50 percent of casino employees from county residents.
    • City of Madera: One-time payments of $6.3 million to $10.3 million and annual payments of $1.1 million, adjusted annually for inflation. Plus, a goal of hiring 33 percent of casino employees from the city.
    • Madera Irrigation District: Annual payments of $47,500, plus extra if the casino uses more water than expected.
    • Other local governments: An estimated $3.5 million a year in payments to offset negative impacts to local governments within 25 miles of the casino.
  • Require other things of North Fork’s casino operations, including licensing employees and suppliers, testing gaming devices and having programs that help people gamble responsibly.

A map from the Legislative Analyst’s Office shows the locations of existing and proposed casinos:

How is this different from existing laws?

Prop 48 doesn’t directly change the rules governing Indian gaming in the state. That said, according to the Legislative Analyst's Office, currently:

  • Federal law prohibits gaming on land an Indian tribe obtained after October 17, 1988. North Fork’s request to acquire and put into trust 305 acres specifically for gaming didn’t come until 2005, but exceptions are allowed if the federal government deems it in the best interest of the tribe and otherwise not harmful to the surrounding community.
  • 72 of California's 109 federally recognized tribes have gaming compacts with the state, and 58 of them operate 59 casinos.

How much will it cost taxpayers?

The LAO reports there is some uncertainty in calculating Prop 48’s fiscal impact, which depends at least in part on how well the casino does, but it estimates:

  • Costs to the state, including those related to regulation and problem gambling, would be offset by payments from North Fork averaging about $1.5 million a year.
  • Both the city and the county of Madera would receive between $16 million and $35 million up front and, in addition to the Madera Irrigation District, about $5 million annually from North Fork. Other local governments could receive $3.5 million a year.
  • Potential (but not significant) reductions in revenue to the state and local governments as Californians spend more money on the new casino at the expense of other activities, including spending at other tribal casinos.
  • Increased revenues to local governments in Madera County as people traveling to the area and local residents hired by the casino spend more money locally, though these revenues could come at the expense of economic activity in surrounding counties.

More: Read the full LAO analysis

How much money's being spent on the campaigns?

Who's supporting it and why?

North Fork, along with Station Casinos — which is the tribe's partner on the project, according to the Riverside Press-Enterprise — have all but self-funded the campaign to pass Prop 48. Station Casinos already operates nearly two dozen casinos in Nevada, California and Michigan.

The California Democratic Party and two fundraising committees backed by labor unions have contributed relatively small amounts to the campaign.

Other key supporters include Gov. Jerry Brown (who approved the compact in the first place); Tom Wheeler, chairman of the Madera County Board of Supervisors; and Robbie Hunter, president of the State Building & Construction Trades Council of California.

Supporters argue the new gaming compacts will:

  • Create thousands of jobs and boost economic growth in the area.
  • Help fund public safety, schools, parks and roads.
  • Promote tribal self-sufficiency.
  • Protect scenic wildlife areas by preventing construction of another casino near the Humboldt Bay National Wildlife Refuge.

They have also made the argument that Schmit earlier “recognized the merits of this project site,” though that characterization is suspect. In 2006, she told a reporter she had not yet taken a position on the matter.

More: Yes on 48 campaign

Who's opposing it and why?

Opponents have far outspent supporters of Prop 48, with much of the money coming from other casino-owning Indian tribes or their affiliates.

Table Mountain Rancheria, which stands to see increased competition from the new North Fork facility, had donated more than $3.5 million to the No on 48 campaign, as of September 24, 2014. Compare that with the less than $400,000 combined contributions made by all of the measure’s supporters.

The second largest donor to the No on 48 campaign was Brigade Capital Management, with about $2.7 million in contributions. According to the Fresno Bee, Brigade backs the Chukchansi Gold Resort & Casino, another opponent of the compacts.

Other key opponents include Fresno County Supervisor Henry Perea; Madera County Supervisor David Rogers; Manuel Cunha Jr., president of Nisei Farmers League; and Gary Archuleta, tribal chairman of Mooretown Rancheria.

Opponents argue that Prop 48:

  • Breaks the promise made by Prop 1A to limit Indian casinos to tribal land.
  • Sets a precedent for other tribes seeking to establish “off-reservation” casinos in urban areas.
  • Add another casino when the state already has more than enough.
  • Fails to protect the environment because it would create increased traffic and air pollution and tax an already-limited water supply.

More: No on 48 campaign

…a YES vote means…

You approve of the gaming compacts permitting the North Fork Rancheria of Mono Indians to build a new casino in Madera County and allowing the Wiyot Tribe to partake in a share of the profits.

…a NO vote means…

You reject the gaming compacts — North Fork will not be allowed to build its planned casino, and both the North Fork and Wiyot tribes would need to renegotiate their compacts with the state if they wanted to pursue gaming in the future.

What else is being reported on this measure?

How would you vote?

Let us know in the poll below — your vote will be added to the total but will not be attached to your name.

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