http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2004/10/07/GAMING.TMP
Sacramento -- Card club and racetrack owners Wednesday abandoned their campaign to pass Proposition 68, which looked to sprinkle slot machines among their businesses and end Indian tribes' voter-granted monopoly on big-time gaming in California.
The sudden end to the campaign - one of two measures that voters will see on the November ballot -- followed weeks of charged television ads it fashioned to portray tribal casinos as runaway moneymakers that should be forced to share their wealth to a greater degree with the state, or face competition from longtime gaming interests.
Wednesday's decision to formally end the push for Prop. 68 -- whose backers had already spent $24 million, half of it on television -- came after both internal and independent polls showed the measure heading for defeat, and as Gov. Arnold Schwarzenegger's opposition has become more vocal.
The governor appeared in Southern California against the measure and its tribally backed rival, Proposition 70, on Wednesday, and will campaign against them in San Jose today.
"The Proposition 68 campaign is in full retreat," Schwarzenegger said in a statement. "My sights are now set squarely on Proposition 70."
Prop. 68's own recent tracking polls projected it would likely garner no more than 40 percent of the vote, campaign officials said. An August Field Poll put it at about 30 percent, with Prop. 70 not faring much better.
Rick Baedeker, the campaign's chairman and president of Southern California's Hollywood Park racecourse, acknowledged that the governor's position stood to have "heavy influence" on voters. But he blamed the initiative's troubles primarily on the 16-word title it was given in state election pamphlets -- a jumble of confusing legalese, he said, that left voters estranged.
"The voter doesn't understand what Proposition 68 is," Baedeker said. "The ballot label is almost incomprehensible, if not incoherent. The voter that supports the elements of 68 reads the ballot label and becomes either opposed or confused."
Prop. 68, which will remain on the ballot, would allow slot-machine gambling to spread from tribal reservations -- where voters allowed it to take root years ago -- to 11 card clubs and five race tracks unless all of the state's 53 gaming tribes agreed to pay 25 percent of their net gaming revenue to California.
The traditional gaming interests would then share 33 percent of their gaming proceeds, the majority of which would be directed into a fund to benefit local public service agencies. Either through the profits of tribes or the tracks and card clubs, the measure projected it would bring in at least $1 billion for the state annually.
The push to pass Prop. 68 itself reflected the changed political landscape of gaming in California. In a state where racetrack owners once loomed large, tribal casinos have become a multibillion-dollar industry with enough political power to be key players at the highest levels of government. Prop. 68, and the slot machines it promised, looked to offer deliverance for the waning businesses, whose leaders now find themselves on the margins of a pastime they helped popularize.
But the measure's backers faced a tough, barbed fight from the outset, with direct mailers unflatteringly depicting pornography magnate Larry Flynt -- who owns a Southern California card club -- as its unseemly ally. Meanwhile, Schwarzenegger dismissed both gaming measures as meaningless. And Prop. 70 pumped millions into pushing its alternative: unlimited expansion of gaming on reservations in exchange for tribes' paying the state's roughly 9 percent corporate tax rate.
Baedeker reiterated Wednesday that card clubs and racetracks were in a fight for their lives and said the industry would pursue lobbying efforts and most likely reappear with a second ballot initiative in coming years.
"Our industry has been in California for 70 years," he said. "You're going to see us in court, you're going to see us in Sacramento, and you're going to see us back at the ballot box."
Prop. 68 backers have sued the state for its first round of new gaming compacts, which among other things guaranteed tribes would retain their exclusive hold on casino gaming in California and tied future expansion to pro-rated fees paid to the state. Administration officials have said the deals should be worth about $125 million to the state annually.
The lawsuit seeks to void the compacts on the grounds that the two-thirds majority vote by which they were ratified in the Legislature was unconstitutional.
Beyond working to overturn the compacts, I. Nelson Rose, a gambling law expert at Whittier College in Southern California who was hired as a consultant to the measure early on, said the industry's likely wish list could now include an overhaul of older state laws that leave them at a disadvantage to tribes. "Card clubs can't play blackjack, they can't play '21,' " and are barred from partnering with established gaming firms as tribes have done, he said.
"Card clubs can probably survive with liberalized rules," he said, but "if it wasn't for off-track betting, the racetracks would be closed. They're probably going to be able to survive this, although they're going to be hurting more and more."
Elizabeth Garrett, who directs the Initiative and Referendum Institute from the University of Southern California, said the withdrawal of Prop. 68 from the election reiterated Schwarzenegger's potent ability to shape elections.
"In a way, it can help Prop. 70 because the number of ads that lead to ... confusion will go down," she said, but the governor "very much comes out the winner in this. He's managed to persuade them to surrender before the election. Schwarzenegger is a key player in how these things work, and when he decided to oppose 68 and 70, what was already a bleak future became even bleaker."
Sacramento -- Card club and racetrack owners Wednesday abandoned their campaign to pass Proposition 68, which looked to sprinkle slot machines among their businesses and end Indian tribes' voter-granted monopoly on big-time gaming in California.
The sudden end to the campaign - one of two measures that voters will see on the November ballot -- followed weeks of charged television ads it fashioned to portray tribal casinos as runaway moneymakers that should be forced to share their wealth to a greater degree with the state, or face competition from longtime gaming interests.
Wednesday's decision to formally end the push for Prop. 68 -- whose backers had already spent $24 million, half of it on television -- came after both internal and independent polls showed the measure heading for defeat, and as Gov. Arnold Schwarzenegger's opposition has become more vocal.
The governor appeared in Southern California against the measure and its tribally backed rival, Proposition 70, on Wednesday, and will campaign against them in San Jose today.
"The Proposition 68 campaign is in full retreat," Schwarzenegger said in a statement. "My sights are now set squarely on Proposition 70."
Prop. 68's own recent tracking polls projected it would likely garner no more than 40 percent of the vote, campaign officials said. An August Field Poll put it at about 30 percent, with Prop. 70 not faring much better.
Rick Baedeker, the campaign's chairman and president of Southern California's Hollywood Park racecourse, acknowledged that the governor's position stood to have "heavy influence" on voters. But he blamed the initiative's troubles primarily on the 16-word title it was given in state election pamphlets -- a jumble of confusing legalese, he said, that left voters estranged.
"The voter doesn't understand what Proposition 68 is," Baedeker said. "The ballot label is almost incomprehensible, if not incoherent. The voter that supports the elements of 68 reads the ballot label and becomes either opposed or confused."
Prop. 68, which will remain on the ballot, would allow slot-machine gambling to spread from tribal reservations -- where voters allowed it to take root years ago -- to 11 card clubs and five race tracks unless all of the state's 53 gaming tribes agreed to pay 25 percent of their net gaming revenue to California.
The traditional gaming interests would then share 33 percent of their gaming proceeds, the majority of which would be directed into a fund to benefit local public service agencies. Either through the profits of tribes or the tracks and card clubs, the measure projected it would bring in at least $1 billion for the state annually.
The push to pass Prop. 68 itself reflected the changed political landscape of gaming in California. In a state where racetrack owners once loomed large, tribal casinos have become a multibillion-dollar industry with enough political power to be key players at the highest levels of government. Prop. 68, and the slot machines it promised, looked to offer deliverance for the waning businesses, whose leaders now find themselves on the margins of a pastime they helped popularize.
But the measure's backers faced a tough, barbed fight from the outset, with direct mailers unflatteringly depicting pornography magnate Larry Flynt -- who owns a Southern California card club -- as its unseemly ally. Meanwhile, Schwarzenegger dismissed both gaming measures as meaningless. And Prop. 70 pumped millions into pushing its alternative: unlimited expansion of gaming on reservations in exchange for tribes' paying the state's roughly 9 percent corporate tax rate.
Baedeker reiterated Wednesday that card clubs and racetracks were in a fight for their lives and said the industry would pursue lobbying efforts and most likely reappear with a second ballot initiative in coming years.
"Our industry has been in California for 70 years," he said. "You're going to see us in court, you're going to see us in Sacramento, and you're going to see us back at the ballot box."
Prop. 68 backers have sued the state for its first round of new gaming compacts, which among other things guaranteed tribes would retain their exclusive hold on casino gaming in California and tied future expansion to pro-rated fees paid to the state. Administration officials have said the deals should be worth about $125 million to the state annually.
The lawsuit seeks to void the compacts on the grounds that the two-thirds majority vote by which they were ratified in the Legislature was unconstitutional.
Beyond working to overturn the compacts, I. Nelson Rose, a gambling law expert at Whittier College in Southern California who was hired as a consultant to the measure early on, said the industry's likely wish list could now include an overhaul of older state laws that leave them at a disadvantage to tribes. "Card clubs can't play blackjack, they can't play '21,' " and are barred from partnering with established gaming firms as tribes have done, he said.
"Card clubs can probably survive with liberalized rules," he said, but "if it wasn't for off-track betting, the racetracks would be closed. They're probably going to be able to survive this, although they're going to be hurting more and more."
Elizabeth Garrett, who directs the Initiative and Referendum Institute from the University of Southern California, said the withdrawal of Prop. 68 from the election reiterated Schwarzenegger's potent ability to shape elections.
"In a way, it can help Prop. 70 because the number of ads that lead to ... confusion will go down," she said, but the governor "very much comes out the winner in this. He's managed to persuade them to surrender before the election. Schwarzenegger is a key player in how these things work, and when he decided to oppose 68 and 70, what was already a bleak future became even bleaker."