Dan Morain

Dan Morain: In casino debate, it's all about competition

Dan Morain
Dan Morain

Money flowing through Sacramento lately can mean only one thing: Gambling is front and center again in the Capitol.

There's lots of talk of tribal sovereignty, reclaiming history and preserving ways of life. Important though all that is, the fight comes down to money, as gambling always does.

Wealthy Indian tribes that already have a monopoly on profitable slot machines in California have developed a far-reaching and self-serving proposal to legalize Internet poker in California.

More immediately, existing casino tribes are battling to block a poor tribe, the North Fork Rancheria, from winning final approval for a casino along Highway 99 in Madera.

The California Senate could vote as early as next week on the compact that would transform the hardscrabble Mono Indian band by authorizing a casino with 2,000 slot machines.

"What it boils down is competition," Elaine Bethel Fink, chairwoman of the 1,984-member North Fork Rancheria, told me.

The North Fork band of Mono Indians doesn't have money to spread among politicians, not yet. But North Fork's friends do. North Fork's friends include the Las Vegas-based brothers Frank and Lorenzo Fertitta, who control Station Casinos. Hoping to expand in California, Station would manage the North Fork casino.

Station is a nonunion operation in Las Vegas and is embroiled in an organizing fight with Unite-HERE, the union that represents casino employees. That might suggest labor would oppose what Station wants in California. But gambling politics and promises of big money produce odd offspring.

Unite-HERE is aligned with Station in seeking approval of the North Fork casino. The reason is simple: When the North Fork Indians began their quest for riches a decade ago, they agreed that if they ever opened a casino, the workers would be union members.

Sen. Ricardo Lara, a Bell Gardens Democrat, was planning to head to Vegas after the Senate vote for a weekend fundraiser hosted by Station Casinos, until Bee reporter Laurel Rosenhall crashed the party by writing a front-page story about it. Lara canceled the event Tuesday, but could hit up the Fertittas later, as others have done.

The Assembly approved the North Fork compact with the minimum of 41 votes on May 2. On April 30, the Fertitta Entertainment-owned Zuffa LLC, which operates the hugely popular Ultimate Fighting Championship, gave $13,600 to Speaker John A. Pérez, who voted for the compact, and $10,000 to the California Democratic Party on April 29.

Five days after the Assembly vote, Station Casinos gave another $13,600 to Pérez, and another $10,000 to the California Democratic Party a day after the vote. No doubt, it all was coincidence.

North Fork's opponents clearly understand the rules of California politics. One opponent is the Pechanga Band of Luiseño Indians, owners of a large casino in Riverside County. Pechanga has given $255,000 to legislators' campaigns this year, including $7,100 to Pérez. Since 2000, Pechanga has spent $70.9 million on California campaigns.

Pechanga Chairman Mark Macarro accused North Fork of reservation shopping, even though Gov. Jerry Brown and President Barack Obama's administration approved it. North Fork's land had been on 80 uninhabitable acres in the hills east of Madera.

"These reservation-shopping, developer-driven gaming proposals like Station's North Fork have infected Indian gaming for over a decade now," Macarro testified at a Senate hearing last week.

The North Fork fight foreshadows similar fights coming this year and in years to come. Any new casino would be competition for the existing 60-plus tribe-owned casinos in California.

The North Fork also is a prelude to a new push for Internet poker. Eight casino tribes including Pechanga released draft legislation last week that would open the way for them to dominate Internet poker in California.

The proposal includes self-serving provisions, notably one that says "no subcontractor shall be deemed suitable if the subcontractor, or any affiliate of the subcontractor, accepted any wager from persons in California on any form of Internet gaming prior to the date of enactment of the act adding this chapter."

That mouthful of a provision would eliminate competition from horse racing and from a new arrival to the Sacramento lobbying scene, Rational Services Ltd. Rational plays in the virtual world of online poker from its base on the Isle of Man in the Irish Sea, and controls PokerStars, the world's biggest Internet poker site.

Rational made the eminently rational choice to retain serious lobbying help, including Capitol Advocacy, one of Sacramento's top firms, and former presidential candidate Richard Gephardt, a lobbyist in Washington, D.C., who recently registered to lobby in this river city.

In an introduction to their proposal, the tribes wrote that for the sake of their "children, grandchildren and future generations," they "cannot afford to get this policy wrong." It's hard to argue with that. The future is, indeed, important. So is money.

Follow Dan Morain on Twitter @danielmorain.