Indian-run casinos are under fire for their video slot machines, which law enforcement officials say are illegal. Indians say no, and so far, legislators in California are agreeing with the tribes. Critics say that Indians, and their high-powered lobbyists, are getting a special deal.
SPENCER MICHELS: Nearly 30 Indian casinos operate today in California. It's the fastest growing segment of the state's gambling industry. Because the Indian tribes are sovereign nations, their casinos are unregulated by the state and they're fighting to keep it that way. But now some state officials want to go after the mainstay of these casinos--the video slot machine. A room full of those machines operate night and day at the Cache Creek Casino, run by the Rumsey Band of the Wintwon Indians.
Video slot machines look almost like the one-armed bandits, which are illegal in California. These machines operate electronically instead of mechanically, with the push of a button. Twelve thousand of them operate in California Indian casinos, and more are added each month. But these machines have come under increasing fire following a state supreme court ruling. The court recently said that a similar kind of video game, Keno, was illegal.
Run by the state lottery, Keno was played in stores and restaurants throughout California. Indian gambling is based on a federal law that allows tribes to run any gambling game that is sanctioned elsewhere in the state. Now that Keno has been shut down, the state says Indian video slots are obviously also illegal. Dan Lungren is California attorney general.
DAN LUNGREN, California Attorney General: It's illegal. I don't care if you're an Indian or not Indian. You don't have a right to ignore the law. It's an area of illegality in an industry which has been fraught with peril the past when you don't have sufficient oversight and criminal justice oversight.
SPENCER MICHELS: Since the state cannot enforce California law on Indian reservations, Lungren wants federal prosecutors to crack down on the slots.
DAN LUNGREN: I've always said, as most law enforcement has said, that when you have the absence of proper regulation, the absence of proper criminal oversight in the area of gambling, where the commodity is money, you are an inviting target for organized crime. And we've been waiting for the Feds to do something for years.
SPENCER MICHELS: The U.S. Attorney replies he is waiting for clearer instructions from the courts before he moves. The Indians say they think the court instructions are very clear in their favor. They say the court only ruled against Keno because people were betting against the state. If too many people pick the winning numbers, the state could go bankrupt. The Indians claim that since that doesn't apply to their slot machines, they're not covered by the ruling.
MICHAEL LOMBARDI, Indian Casino Manager: The attorney general is dead wrong on this one.
SPENCER MICHELS: Michael Lombardi manages an Indian casino near Santa Barbara.
MICHAEL LOMBARDI: The California state lottery has established that the use of online video terminals and computers is legal in the state of California. That means some form of video gaming on Indian reservations is coming to California, whether the attorney general likes it or not.
SPENCER MICHELS: Like most gambling battles, the fight over video slots has come to Sacramento, the state capital. Mayor Lombardi and others are lobbying the legislature to legalize the tribal machines. The Indians are big contributors. In fact, they say they are solicited for such contributions. The Cache Creek Casino is no exception. Paula Lorenzo is the Rumsey Band tribal chairwoman.
PAULA LORENZO, Tribal Chairwoman: As a whole, the tribes throughout the state have contributed to campaigns. We haven't ever been asked actually until we started in gambling, in gaming. Umm, no one ever thought about the tribes, and all of a sudden, it's like, well, you got $500 here, $1,000 here.
SPENCER MICHELS: All told, gambling interests are spending $3.3 million in campaign contributions and lobbying a year. Sometimes they are fighting for legislation in favor of themselves, sometimes against other gambling interests. For example, race track owners, whose business has been declining of late, are pouring money in to allow card rooms at the track and they are spending money to fight against the expansion of casino or video gambling elsewhere.
Card rooms like the glitzy Los Vegas-style San Pablo Casino near San Francisco also spend money to bolster their own interests and fight others. This place grosses $90,000 a day from card games alone. In California, card rooms are not allowed to operate slot machines like the Indians do. They'd like either to get permission to have slots or keep the Indians from having them. The owner of this casino, Stanley Friedman, says because of all the competition in gambling, he has no choice but to play the political game.
STANLEY FRIEDMAN, Card Room Owner: Those people in Sacramento have had civics lessons. They're pandering to Indians. They're taking their contributions. They're putting laws through the legislature which they know either won't be signed, or if they are, they'll be challenged and defeated. I mean, there is the quintessential example of what's going on up there that we are basically in the midst of this competitive battle and everybody is being bought.
SPENCER MICHELS: Even Nevada, the grand daddy of gambling in the U.S., is right in the midst of the fray. Gambling interests from this neighboring state are working hard to curtail gambling in California. They have given seed money to former Highway Patrol Commissioner Maurice Hannigan to form the Foundation on Gambling Abuse to protect their interests.
MAURICE HANNIGAN, Foundation on Gambling Abuse: They have a very tight, regulated process in the state of Nevada, and they don't want to see this spread to other states, where it's unregulated and cause problems in the industry because gambling--and I don't think anybody, including those that are in the industry--will deny that there is a big potential for abuse and criminality when it comes to large flows of money going through establishments.
SPENCER MICHELS: California assemblyman Philip Isenberg thinks all these contributions will lead to corruption. He wants to limit them by law.
PHILIP ISENBERG, California Assemblyman: This is not like regular Chamber of Commerce activity. The transaction is cash. It has always involved criminal elements, always involved criminal elements. That seems inescapable, always involved serious problems, extortion and bribery of elected officials, and there's no reason to believe we'll be any different.
SPENCER MICHELS: But Isenberg's attempts to limit gambling contributions have failed time and time again because of the opposition of legislators like Democratic State Senator Richard Polanco. Polanco sees nothing wrong with the money he receives from Indian tribes and quotes former California assembly speaker Jess Unruh.
RICHARD POLANCO, California State Senator: Jess Unruh said it pretty well, that the--you know, if you can't, uh, drink their booze, if you can't enjoy and look ‘em straight in the eye and vote against them, then you're in the wrong business, and I concur with that. A contribution doesn't get any member's vote up here.
PHILIP ISENBERG: I don't have any doubt in the world, whether it's this year or next year or the year following, some of my colleagues will get in trouble. I have no doubt that law enforcement officers, federal and state, are looking at the gambling activities in this legislature and at the local level and considering investigations, if not prosecutions.
RICHARD POLANCO: I don't think it's a question about politics. It's a question about, hey, why do we want to screw with the Indians again? They've come--they've made it--they have resources. They're viable, they're building homes, their health clinics. They have kids now that are going to college. And now we want to come and take--pull the rug from under them? That's not right.
SPENCER MICHELS: A bill by Sen. Palanco that would have legalized Indian slots died in the legislature, but a similar bill is still alive which Gov. Pete Wilson says he will veto. Meanwhile, many new Indian casinos with slot machines are planned, despite protests from residents who object to gambling in their neighborhoods. The federal appellate court is now considering another case that could determine the future of video slots. And several other pro- and anti-gambling measures are still on the state legislative table, which means the money is still flowing not only in the casinos and card rooms but in Sacramento as well.
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