In exchange for the right to expand, the tribes will pay about $122 million more annually to the state than at present under the gaming compacts negotiated by Gov. Arnold Schwarzenegger and approved by the Legislature in July.
Baby needs a new pair of shoes -- and California needs a new source of revenue.
"We now have no way out except to face our budget demons," said Governor Schwarzenegger.
Governor Schwarzenegger will face those demons with tribal casinos and a huge chunk of their money at his side.
As part of the deal with the state, four tribes will add as many as 17,000 new slot machines to their casinos. California will get a cut of all the cash they generate.
"Up to 25 percent of your revenues being turned over to the state is a monumental amount of money for our state," said Fiona Hutton, gaming propositions supporter, Yes on 94, 95, 96 & 97. "It's an infusion of cash up to $9 billion over the next two decades. It's hundreds of millions of dollars each year."
That's a lot money.
But Professor Peter Dreier, Director of Urban and Environmental Policy Program at Occidental College, says it's a losing bet.
Dreier is one of the people who asked voters to shoot down Propositions 94, 95, 96 and 97.
Dreier says the Governor cut the tribes a sweetheart deal, that other tribes in other states fork over considerably more cash. Pennsylvania gets 55 percent of the net win and Florida, 50 percent, says Dreier. California will be closer to 18 percent, according to Dreier's research. And the professor says the Governor's deal lets the tribes hire the auditors.
"So the Indians themselves are going to decide how much money they made and how much they owe the taxpayers, how much they owe the state, which is like the fox guarding the chicken coop," said Dreier.
Not true, says Fiona Hutton, who supported the approval of the gaming compacts.
"These new compacts specifically allow the state to come in randomly to oversee the books and audit the books any time they want," said Hutton.
According to the Legislative Analyst's Office, there are 71 federally recognized Indian tribes in California, of which 58 have gaming compacts under agreements originally brokered through then-Gov. Gray Davis' office in 1999. Eyewitness News reporter Rob Hayes and CNS reported to this report.
