Indians could become major players in California recall

Aug 26, 2003 7:31 AM

It’s "pow-wow" time for the Indian tribes in California who operate some 54 casinos and have become what is being described as the most powerful political force in the Golden State.

So far, there’s been no hint as to what candidate the Indians will support with the millions of dollars made available through their casino profits.

Since March, the tribes have been negotiating new gaming compacts with Gov. Gray Davis. These talks reportedly have not been going well since Davis has been attempting to get the casinos to share their profits with the state. Initially, Davis wanted them to come up with millions in voluntary contributions since federal law prohibits states from taxing the Indian gambling empires.

For the most part, the Indian negotiators have been adamant in refusing to help the state out of its budgetary problems. Even the proverbial carrot of permitting the casinos to expand their slots operations by as many as 2,000 machines each so far has failed to sway the negotiators. That would double the maximum number of machines permitted at each casino.

Standing in the wings, prepared to accept any support the tribes would give him is Lt. Gov. Cruz Bustamante, a Democrat who has been described by gaming consultant, Prof. I. Nelson Rose, as "the best friend gaming tribes have in Sacramento."

Throughout his political career, especially during the period when he served as Assembly Speaker, Bustamante has been a solid supporter of Indian causes.

Recently, he was quoted as saying, "I’m going to ask the different tribal governments to assist me and provide as much support as they possibly can."

Based on the recent Los Angeles Times poll indicating that Bustamante is leading all candidates, should the governor’s recall pass, now would be a good time for the Indians to put their financial support behind him.

One tribal spokesman said that he felt, "some tribes don’t want to put themselves in the position of fearing that if (Arnold) Schwarzenegger wins they put all their eggs in the wrong basket."

Certainly out of consideration for Indian support is Hustler magazine and card room operator Larry Flynt, the only candidate who has a specific plan to cut into the budget deficit. He would authorize the 140 or so remaining California card rooms to install slot machines, a move he said, that would raise millions in state revenue.

Tote investment

Now that Magna Entertainment Corp. (MECA) has become the largest owner and operator of racetracks in North America it has reached out to take a position in a pari-mutuel totalizator system.

The company announced an agreement to acquire a 30% equity and voting interest in privately held AmTote International Inc. Total purchase price was given as $3.82 million. The remaining 70% interest will be retained by the Corckran Family that has owned the company for the past few years.

Jim McAlpine, president and CEO of Magna Entertainment, lauded AmTote as having a history of developing innovative products for the industry.

"By combining our expertise as racetrack operators with AmTote’s knowledge of systems and hardware, AmTote will be able to develop new, more user friendly systems" that will help both companies to grow and prosper, McAlpine said.

During the last quarterly report made by company executives of International Game Technology (IGT), it was indicated that the company was discussing the sale of AmTote competitor, United Tote. IGT inherited United Tote when it acquired Anchor Gaming.

Foster’s backing

Time may be running out on the Jena Band of Choctaw Indians and their hopes of establishing a casino in DeSoto Parish of Louisiana.

Their big booster, Gov. Michael Foster, has reiterated his support for the plan in a letter to federal authorities. Unfortunately for the tribe, the Indians don’t have a reservation on which to place their casino so they are pushing the Interior Department to approve their application to take the necessary property in trust.

Also supporting the Jena Band in this proposal are the DeSoto Parish officials who said they would welcome the casino.

However, success could be difficult for the tribe since they face two major obstacles. The first is the fact that Foster’s term expires at the end of the year and his successor may have different feelings towards an Indian casino. The other problem is the competition their casino would face since the property is just 45 miles from the riverboats and racetrack in Bossier City and Shreveport.

The Insider

Argosy Gaming Company (AGY) has named Frank Quigley as the general manager of the Argosy Casino Baton Rouge, La. Quigley, a two-year employee of Harrah’s Entertainment Inc. (HET) most recently was vice president of slot operations at the Showboat Casino in Atlantic City, a property owned by Harrah’s.

Dave Tedder, a Florida lawyer who was convicted of helping Henderson, Nev., resident Jeff D’Ambrosia to hide his interest in Internet gambling ring based in Wisconsin, has been sentenced to five years in prison and was fined $1 million.

PDS Gaming Corporation (PDSG) says a class action lawsuit filed in Nevada District Court has been voluntarily dismissed.

Games maker Atronic Americas LLC has opened new corporate headquarters in Scottsdale, Ariz.

The Mississippi Gaming Commission has approved a plan to move Treasure Bay casino’s gambling barge into a man-made basin east of its current location in Biloxi, Miss.

Colorado casino revenue declined 4.5% in July. The adjusted gross proceeds were listed at $61.7 million, down $2.9 million from last year.

With racinos at Delta Downs and Louisiana Downs now attracting customers, the Louisiana riverboats showed a sharp decline in revenues for the month of July. The 14 boats won $134.8 million, down from last year’s $173.5 million.


Gaming dollars fund arena

Is this retribution aimed at the political forces that raised the taxes on the New Jersey gaming industry? Or, is there fear that their donations to the Casino Reinvestment Development Authority would be used in a very controversial building project?

The questions were being asked last week when lawyers for Park Place Entertainment Inc. (PPE), the largest casino operator in Atlantic City, asked a state judge to prohibit the CRDA from using the $8 million the company donated to the authority to build an arena and a civic center in Pennsauken, N.J.

CRDA planned to deliver $24 million in casino donations to Camden County where community Democratic leaders were pushing for the $60 million project. Opposed, however, are some 120 merchants who call the project a "boondoggle" that would see their retail properties leveled.

A spokesman for Park Place Entertainment said the company is "concerned that it will be perceived as supporters of a politically controversial project which may not succeed."

However, some Camden County officials said Park Place Entertainment was only retaliating against the lawmakers who included $90 million in tax increases for the Atlantic City casinos in the recently passed state budget.