Interview: Senator Bill Lockyer

Q: Tell me, Senator, do you gamble?

Sen. Lockyer: No. I haven't even bought a lottery ticket.

Q: Why not?

Sen. Lockyer: I guess people would say I gamble in my work, that I've chosen a profession that's risky and we're subject to tenure review every two or four years from our constituents. So, that's enough risk taking in my life.

Q: But, why not, though? I mean, for instance a lottery ticket -- it seems like everyone should have bought a lottery ticket now -- why haven't you?

Sen. Lockyer: I just don't do it -- it doesn't meet my personal beliefs, and the odds aren't great. I'm much more of a gambler when it comes to playing the stock market or something that's a little better bet.

Q: You're right on the odds. Because I'm asking everyone this question only because I'm trying to get to the second question, which is, what is it about gambling that's entertaining? Do you have any answer to that? Or, if you're not a gambler, it might be harder. But, what is it that people find entertaining? Why is it growing so quickly?

Senator Bill Lockyer, California Senate President.  He was interviewed in the early spring of 1997.	Sen. Lockyer: I would only guess that people just buy in a variety of contexts. I mean, I see developers who get engaged in the deal when there's so much money on the table, at risk, that that excites them. It's not gambling in the sort of, playing poker kind of way, but it's a gamble. And it's risky, speculative business. And they know it. And they get a certain thrill out of that. Oh, I guess, maybe they're the same impulses or motivations, that living risky, taking chances, the...chance of the big, huge, amplified win if you're lucky and the odds run with you. I guess those things.

Q: That's a very interesting answer. No one has said that before and I hadn't thought of that before, but, gambling isn't just a pure games of chance here, you're talking about. What you're saying is gambling is just sort of, this endemic of the human experience. And then when, when there's a tad at risk or, or exposure, there's something more thrilling about that.

Sen. Lockyer: I think that's right. And you find it in lots of different legal and illegal behaviors.

Q: Very interesting. That's an interesting angle. Why has it taken them so long to get meaningful gambling regulation here in California?

Sen. Lockyer: Well, we have gaming regulation right now. Local police departments do a lot. The Attorney General, the District Attorney, the Department of Justice and so, it's not that there isn't any. There are many who believe we need to do more and who especially... look for the more sophisticated forms of illegal activity, loan sharking and money laundering and things of that sort. And so the suggestion has been that we expand the powers of the Attorney General's office to accommodate that growing need.

Q: A lot of people say that, you know, the local police responsibility is compromised, often, by the substantial part of their local budget that is created by this card room activity That, therefore, there should be a state-wide capability. Do you agree with that?

Sen. Lockyer: Well, I don't think the budgets of these communities that rely heavily on revenues from gaming spill over into the department's enforcement activities. I've looked at their enforcement activities. They're very rigorous. They fight with the clubs all the time about specific activities that they would question -- of course, if you'll look at those places, you'll find that there's a TV screen on every table, on the parking lot, on the -- every place in the club where something illegal might occur. And those tapes are kept for a long time to be used by law enforcement. So, there's a lot of activity now and surveillance.

Q: So you think they're doing a good job now?

Sen. Lockyer: What seems to be the problem isn't so much that kind of crime that's very visible and apparent, but the more white collar crime, the illegal books -- the money laundering that might come in from an illegal source. That's more sophisticated and perhaps beyond the capacity of the traditional law enforcement agencies, at the local level. That could be expanded at the AG's office.

Q: How urgent do you feel this need [is]? I mean, is this something that's really pressing, that should be done, quickly?

Sen. Lockyer: I think it's desirable to do it. I don't -- unfortunately, politicians tend to puff and exaggerate their significance. And I think there's been a lot of that kind of hype, that people who were in public office that liked to play Dick Tracey think that they're responding to some great criminal enterprise. Yes. There are problems. Yes. It needs more enforcement. However, I would quickly add, that there probably isn't a single government program that couldn't do a better job with more money, whether it's teaching schools or moving traffic or providing health care or whatever. So that's a common, fact, and one that we need to be sensitive to.

Q: Well, to an outsider, it would seem fairly easy to say to just borrow what works and then the Nevada system. And just say, OK, this is a good system. We'll overlay it on our system. Is that too simplistic? Why couldn't that work?

Sen. Lockyer: Well, Nevada has a much more comprehensive gaming business. They have, oh, for slot machines, which actually account for two thirds of the gaming inventories in that state -- as well as all the other dice and card games that we don't allow in California. If we were to have games like that, then it makes sense, in my view, to replicate the Nevada enforcement. What they're really talking about is how do we regulate the current card room environments where there's limited types of gambling. That is, you don't play against the house, like you do in Nevada. Big, big gamblers play against each other. That is, provides an important distinction, in terms of the motivations to cheat or, or rig a game on the house, which are, are much less than they might be in Nevada.

The proposals we've seen, and what's disappointed me, is the suggestion has been made that we need this huge bureaucracy at the State level and the Attorney General's office. Now, this is the fellow that claims to be a conservative, limited government advocate. But as soon as it's something that he's in charge of, he thinks we ought to amplify the regulatory effort, spend a lot of money, create a lot of political jobs that pay a $100,000 a year for people to sit on some commission part time. My view is, that's a Cadillac solution to a motor scooter problem. That we need more sleek, targeted enforcement activities with auditors, with investigators and so on -- we don't need a lot of $100,000 a year political jobs.

Q: You mentioned the Attorney General. He said, about your interest in this legislation -- I'm going to quote him so I get it correctly -- that you got interested, that after getting a lot of heat from editorialists and other people, Sen. Lockyer felt he ought to work with us and do something about this. Is that a fair characterization?

Sen. Lockyer: Well, it's partly true in that when bills that were introduced in the past, created what I thought was the fat bureaucracy and the pot and not too much more regulation, too much infrastructure. And those bills down. And the Attorney Generals and others made comments about, gee, I must be supporting the gaming interests or something of that sort.

I learned that the best defense is a great offense. That is, to have my own bill, that I thought would be a responsible one, that didn't contain defects of excessive bureaucracy at tax payer cost so that I could be for something, not just oppose something.

Q: Well, you said at your press conference a few weeks back, that you were partly to blame for the failure of last year's bill. How, in what way?

Sen. Lockyer: Well, only in the sense that the bill failed on the last night. That was partly my decision. Now, there were a lot of other things that led up to that. Our lawyer, for the legislature, suggested there were at least three unconstitutional provisions in that law.

I've taken an oath, as have others, to support and defend the constitution. I don't think I should knowingly enact an unconstitutional statute, that burdens the court system. It creates cynicism with the public whenever the court has to over turn some legislative enactment. So, there were three provisions that were thought to be unconstitutional and partly, for that reason, I put on the brakes.

Now, the Senate passed my bill in May, May 31st, I believe it was, by a vote of 32 to 0. This was the targeted enforcement bill that didn't have all of the special interest goodies that got added on by the Republican Assembly Committees as we worked through that house.

Finally, when Pete Wilson said he was going to veto that because of the hitch-hikers of the special interest variety, then it got rewritten secretly. The Attorney General, apparently, promised lots of the groups, horse tracks, the card rooms, the Indian tribes, that all those things they had tried to add into this bill, they could do for them administratively. They didn't need a statute.

So, I found myself in the uncomfortable position of facilitating all these back room deals that the Attorney General was trying to make just because I had a bill with all these hitch-hikers added to it that I opposed.

Q: Well, that's exactly what he says, though. He says that, you know, the bill that came back to you that final night had been stripped of all those amendments that you would object to and it was much closer to the original bill than what came out of Assembly.

Sen. Lockyer: Well, it might have been. I think it probably was. Unfortunately, when-when we pass a bill in May and then in August, after midnight, on the last night, you get a 130 page bill back that's been rewritten, there's no time to really review and analyze. Plus, we did note, that the legislative analyst - or, pardon me - the legislative council told us that there were at least three constitutional defects in the proposal. Well, given that environment, and what I thought was disrespect for me and my office because I had been frozen out of all the discussions - it was my own bill - that they wouldn't even tell me what they were doing to it. You get it back aft- in the wee hours, that it was appropriate to say, we're going to stop and take this up again next year, which is what we're doing.

Q: Yeah, that's what you said at the press conference, that you might have over reacted to the insult. Is that a correct a description?

Sen. Lockyer: Yes. I think so.

Q: Just in the, sort of the heat of the last night or is that what...?

Sen. Lockyer: Well, it's just a pressure cooker here all the time. And the last week and the last night are especially frenetic. People's bills are passing and they're dying. And, and I'm in the middle of a lot of those disputes... And so, I think I overreacted to the fact that they were disrespectful. But, separate from that, the constitutional defect would have been sufficient reason not to pass something at the last minute.

Q: Yeah, you said, also, that there was plenty of blame to go around on it. Simply, can you articulate that for me? Where else should the blame be shared?

Sen. Lockyer: Oh, I think the willingness of Assembly members to add in all the special interest provisions made it more difficult. The Attorney General's instances on fattening up his bureaucracy may be inconsistent with his usual philosophy. And especially, the high paid board members that would work part time to get a big salary, that commitment on his part contributed to the part. And that just generally, his willingness -- and I think it's because he's a right wing Republican and I'm not -- but his willingness to engage in jousting in an aggressive way, isn't a way to get things done when you have to operate in a bipartisan manner.

Q: Well, let's talk about that. I was going to get to it eventually. But, the whole idea of the, the various lobbyists who have shown interest in this legislation...explain to me, how important a role have all of those representatives played in...changing, creating problems, whatever -- for this bill?

Sen. Lockyer: Well, the groups that those lobbyists represents are significant. There are on all sides of the issue, so there's not one point of view. They compete amongst each other for market space. And, if they can get an advantage for their particular business because of [the way] the law is written, they're active in those ways. And I can certainly, as the bill progressed through the Assembly, that became an increasing problem with each step. And then when Pete Wilson said, "I will veto a bill with all those Christmas Tree, special interest goodies on it." I think he was right. And that shut down that whole process.

Q: How do those Christmas tree ornaments get attached to a bill like your SB8 or whatever it was last year?

Sen. Lockyer: Well, what happens, is you go to the governmental organizational committee, which regulates liquor and cigarettes and horse racing and so on. You go to the committee, some member of the committee -- in this case, it was the Chair, who, fortunately was defeated last year so he's not here -- but the Chair introduced amendments that the race-tracks want. Then you go to the next committee, the Appropriations Committee. And amendments were offered and appended to the bill there by the majority of the committee that added in some other kind of special interest thing. And the bills, even if you're the author, you don't control it in the sense that it's the property of the committee or the house in which it's being heard. And if they want to force something on it, then the choice you have is either to drop it, just not go forward or to keep fighting the next hearing to try to undo the damage.

Q: Well, it's interesting because we tried to calculate how much money, in fact, had been invested by all these various interests. And the number we came up with, roughly somewhere around 10 million dollars have been spent to hire lobbyists by the variety of interests involved, to play some role, or at least keep an eye on this bill. What does that mean when you have that much man power, or woman power, that much fire power being applied to a piece of legislation like this?

Sen. Lockyer: Well, what it means is that clearly, there is some very important economic interests that have a stake in the outcome -- much like we will see doctors and lawyers and corporations and hospitals and you name it, competing around bills that affect their industry or interests or their economic interest to try to maximize the outcome. But it certainly means that there's a opportunity for them to write the law in a way that might benefit their particular client.

Now, the universally argued thing in the capital, is that every special interests needs are some how congruent with the public good. Our task is to try to figure out when that may be true. There might be a case of the public good being the same as some private interest, usually not, in my view, but often -- or sometimes, at least, it might be true. That's the hard task, because they all claim that.

Q: Yeah. So basically, you get money publics working in this...

Sen. Lockyer: Well, and also, they're on opposite sides of the issue. Sometimes people think you can do a vector analysis and look at the political or contribution inputs and predict the policy outcome...this is a good example of where you can't do that because they're all fighting with each other, these different groups and interests. And what's interesting for people like me, is you eventually discover how liberating it is to do whatever you think is right. Someone out there will agree and contribute to your campaign. It may be different groups, but you don't have to worry about that. It takes care of itself. Just do whatever you think is the appropriate policy.

Q: So, it's a question of whatever the decision is, there'll be some supporters and some...

Sen. Lockyer: Some will be unhappy and some will be happy and just do whatever you think makes sense.

Q: Now, looking at the progression of those five years of attempts, there is an interesting flow of people who will move from the legislature and then over and become lobbyists. How much of a problem does that create for you? Because, basically, a lot of those folks that you're looking at were somebody who might have been writing last year's bill.

Sen. Lockyer: We do have a period of time that you're not allowed to lobby whether you come from the executive or legislative branch. And so there's a freeze period. But there are some that were legislators years ago, that now are lobbyists. I haven't noticed that they have any special advantage. Sometimes they're people you didn't vote with when you were in the legislature with them and that might even be a burden on their side, rather than a benefit.

Q: One of the characters that we were struck by because he's working with the federal government -- or was, anyway, as a partner -- was a fellow named George Hardie. [W]hat's your assessment of Hardie?

Sen. Lockyer: He's one of the colorful, fascinating, rascals of California business. I found him to be very interesting, just as a character. He seems to have very complete and credible explanations about his own business background that are, that defend his, himself and his activities. Beyond that, he certainly is a matter -- a person that is controvers[ial]. The Attorney General and others are after him all the time for various kinds of gaming abuses. Those -- the proper way to determine those, rather than in gossip columns, it seems to me, is in the court system. That's where they should be.

Q: Does it surprise you that he was sort of working as a partner to the federal government during a lot of that? Does it seem like a logical marriage?

Sen. Lockyer: Well, it seems odd when the federal government seizes an asset because of the drug forfeiture laws and then winds up, in effect, running a business. And he's a minority partner in that business. I would think that getting the government out of that business would be the right thing to do. And I believe the Attorney General's attempted to facilitate that. It's just been hard to find a buyer and one that would pay the appropriate amount for profit.

Q: I mean, the property has made a whole lot of money. It seemed likely -- if you've got a growing concern, something that's making money, it should be reasonably easy to sell, especially after six years, or what ever it's been.

Sen. Lockyer: Well, I guess it's a question of how much they'd sell it for. And perhaps business people are -- I don't know why they don't tell me this -- but I'm guessing that they think prospects for the business are too unclear ten or twenty years from now and to, to recover their investment, they'd need more certainty than they currently have.

Q: Mr. Hardie's been separated from that property now....there's been a suggestion that he was playing too big a role up here in Sacramento in terms of these bills. Is that accurate, do you think? Is that a fair assessment of what he did?

Sen. Lockyer: Well, his role was to propose my bill, the Eisenberg bill and others and he lost that. So, that certainly suggest that the other side had much more influence than... did Mr. Hardie.

Q: The um, one of the items that came out in previous conversation was the whole question of the, the amendment in there that bans contributions to Attorney General candidates. You opposed that. Tell me why you opposed that.

Sen. Lockyer: Well, I'm a free speech advocate. And I don't think it's right to have laws that regulate people's speech, when it's legal. And so that's my worth. Now, that was last year's debate. This year it shouldn't matter at all because the voters adopted Proposition 208 last November and the most that a club, for example, can contribute to a candidate for the legislature is $250.00. Now that would, it seems to me, have taken care of whatever complaint that people had about undue influence.

Now, I point out, that while there's a substantial amount of money involved in their political activities, they're on every side of the issue. So, in many ways, they nullify each other's efforts. But, 208 is the law. That problem is resolved. And it's resolved in a way that doesn't do violence to the first amendment, as did some of the earlier suggestions.

Q: There was some suggestion that you might run for Attorney General and that was part of your concern? Is that true?

Sen. Lockyer: Well, it's true that I've given some consideration to running for Attorney General. I don't rely on regaining interests for much of my total amount of political contributions. It's significant. And I'm grateful for support from any group but the, like the argument that somehow there was a connection between my own ambition and my First amendment beliefs suggests that somebody doesn't know me very well. I've been a pure, First amendment advocate for the 23 years I've been in the legislature.

Q: Going back in history a little bit, we've been told that one of the major reasons the early bills failed was because, then speaker, Willie Brown, on a legislative technicality would basically bury the bills. Is that accurate? And why did the speaker do it then? Do you know?

Sen. Lockyer: I wasn't in his house when that occurred. I heard him talk about the bills in the past and the -- with the hue that they weren't constructed correctly. He had some complaints similar to mine...too much bureaucracy, too much overhead, too much waste of tax payer money. But other than that, I've never heard any explanation from him.

Q: ...legislative trick that was going on to, to get something off the table that certain interests didn't want on the table. Is that a common occurrence? Is that fair to say in those cases with the Speaker? I know you weren't there, but you certainly know enough about the legislative process to, to have an opinion.

Sen. Lockyer: Well, there's no doubt that when Speakers oppose a proposal because they think there's some defect, they have a variety of, sort of, parliamentary maneuvers that can help them accomplish that goal. But it starts with a fundamental belief about what's good policy. And I think there's too much cynicism thinking that it's all politics rather than a policy debate.

There's so many interests and issues that we see every year in the Legislature, that we don't have any need to have one reoccur year after year after year. It just occupies space and time. It's better to solve these matters and get them behind us, if we can.

Q: What do you think of now Mayor Brown's recent idea about opening up a casino on Treasure Island? Or, the Presidio, I guess it was? Is that a good idea?

Sen. Lockyer: Well, the Mayor has a history of, kind of spouting or spinning off new ideas with some regularity. I think this would be a controversial one and it would take a long time to implement it...

Q: I actually had somebody who was in the gaming industry in Vegas, many years ago, tell me, recently, that if he could get that San Francisco casino, he would give the state of California 99% of the take. And he'd be very, very happy with 1%.

Sen. Lockyer: I haven't heard that.

Q: How do you respond, though, to those who claim that these bills -- because we're talking about five years worth of bills in both houses -- have been basically milked by the Legislature? Is that a fair criticism?

Sen. Lockyer: Well, it is true, there was intense competition among all these interest groups. And over the years, as the debates gone on, the people who sit on the governmental organizational committee and other relevant forums have been supported or opposed by the various groups, depending on their particular philosophy. That's just the nature of things. I don't think anyone has tried to put the breaks on. It's just been a legitimate argument about the right role for the state. Should we take over a local responsibility and bring it to the state level? Normally, now, we're going the other direction, trying to shift power and authority for programs from the federal government or the state government back down to the locals. This reverses that trend.

What kind of regulation? Who should be in charge? What kind of bureaucracy and taxes are needed? Those are legitimate debates. And it's too bad, I think, when people are overly cynical and look just at the politics of the environment and not the policy disputes.

Q: I guess, the problem is for the average viewer outside, a lot of those subtleties are lost...a lot of those fine distinctions about the type of regulation and the various interests. Because, from the outside, it looks like you don't have regulation; you need regulation; you should have regulation. A no brainer. But it's not, you're saying.

Sen. Lockyer: Well, I'm saying, first of all, that's an inaccurate description of the current environment. There is regulation. The question is, is it adequate for all potential abuses of gaming laws and illegal activities that we would want to control.

And then, to the extent that there is some problem that we want to effect, who can do it best? With which resources? And what manner?

We have this problem, for example, in California, the state is unable to regulate just the Indian gaming activities at all. So we talked about the explosion in gaming, but it's mostly in sovereign lands of Indian tribes that the state can't touch, unless they consent to the regulation. So, we operate in this other little niche, where there already is regulation here and quite a bit of it. And here, is totally unregulated activities in the same town, just further away.

Q: Does that undermine the attempt to control all this gambling in the state, by having sovereign states who can gamble within the state?

Sen. Lockyer: Well, that certainly creates two kinds of pressures. The regulated California businesses saying, well, this isn't fair to us if someone is unregulated and we are. Also, to the extent that there are Indian activities, then you have the regulated community saying, well, we want the same games or opportunities to have gambling that they might have. That's a federal law. I think there are reasons both of historic justice and economic development to allow Indian gaming, so I don't dispute the federal policy on that point. But it does, for us, create a regulatory problem because of the different rules in each part of California.

Q: Well, how do you deal with that problem? They have slot machines...why shouldn't we have slot machines?

Sen. Lockyer: Well, it's very hard to justify different treatment. Now, in California, well, any place, the state government, if the Governor wants to, can sign an agreement with [unintelligible] that would specify the major type of games, the regulatory environment and taxes and so on.

Our Governor, in the past, has not chosen to do that. Perhaps if there's any benefit that came out of last year's contentiousness with respect to this matter, is that the Governor has now finally engaged in a serious negotiation with the Indian tribes.

Q: Well -- how does that effect your SB8? If there is a compact, would that not be enforceable on the Indian tribes, too?

Sen. Lockyer: Well, there'd be two things, one is, we probably have to put some of the agreement into state law so that you need some bill some where to accomplish that. The second is, the me, too, types of arguments will intensify depending on what the agreement is that the Governor would work out.

Q: You mean others will ask for slot machines.

Sen. Lockyer: Yes. Or, well -- it depends on what it is. But, you -- you know, whatever the agreement is with the Indians, there's going to be the traditional gaming enterprises of race tracks and card rooms and bingo games or whatever, that will say, wait a minute. If that's OK here, why isn't it OK for us? And I expect...debate this year of that sort.

Q: It sounds as though we've got a little spiral going here that can't stop. There isn't an end point, as I'm hearing.

Sen. Lockyer: Well, the end point is the voters. In California, a constitutional provision that was adopted by initiative along with our lottery prohibits casino style gaming. So, in order to open that door, it has to go back on the ballot and people have to cast votes. So that's the constraint, ultimately, on this thing.

Q: You brought up the lottery. What's your position on the state lottery? Is it a good idea?

Sen. Lockyer: I opposed the original proposition, mostly because I thought at first it was over promised. I can't tell you how many constituents believe that our funding for public education is resolved because we have the one third of the lottery receipts that go to public schools. Well, that barely makes up for inflation each year in the school district's budget. It's no great fiscal device.

My, my second is that it looked basically like a special interest deal that was financed and advanced by the -- make the businesses that manufacturer and distribute the lottery devices...seems to be true. And on both factors...Now, it's the law. We've got it. I don't see that it's likely to go away.

Q: That phenomenon we were talking about with the private gambling operators has operated on the state level, hasn't it? Because I remember back in Massachusetts, years ago, when New Hampshire had a lottery, oh, my God, we've got to have a lottery. Then they had a lottery. And on and on and on. And now, what 38 states? Or something along that line now have lotteries. [I]t's almost the same phenomena we were talking about with the private interests here.

Sen. Lockyer: Yes. Now, the thing that I'm trying to raise this year that's new to the debate is what will we do about gambling addiction? As gaming spreads throughout the country and California, we know that there is substantial number of people who actually have an addictive personality and can't stop themselves from spending their paycheck or whatever and then not feeding families. And so programs that would help people deal with those addictions, I think, are very important. That hasn't been part of our debate in the past. I'm advancing that to the front of the discussion this year.

Q: And on the lottery question, I know there are suggestions that there are a lot of people who fit that category in the lottery that are, sort of junkies to the lottery, if you will. Is that something you've heard of?

Sen. Lockyer: Same thing, yes. And one of the proposals I have, for example, is we put on the back of every lottery ticket an 800 number where a family member that sees addictive behavior could check in and try to figure out how do you get some intervention and counseling for a person or they might themselves. Some of their advertising program should probably include help with addictive gaming. So I'm hoping that we can expand our programs that way.

Q: Is it you're feeling this is worth a couple of percent of the school budget?

Sen. Lockyer: That's it. [It] depends on the volume of the activity in any year. But it's basically two or three of the school district's budget which means you keep even with inflation, but you don't expand your programs.

Q: You were referring to this at your press conference. You said that without aggressive advertising the lottery wouldn't work.

Sen. Lockyer: Yes. That's what they say.

Q: So...what's your feeling about that?

Sen. Lockyer: I think it's probably true. That is the lottery tells us, when it's often suggested, for example, why don't we have more small winners rather than these huge big pots? They claim that they have marketing research -- and I have no reason to doubt it -- that suggests that it's the big pot that drives the ticket sales, not the little wins that are more possible. And they're doing this all over the country. And these marketing experts that look at what works and what doesn't. And it seems to be dependent on millions and millions of dollars of advertising that drive the games.

Q: So, in order to have a lottery, you must have this advertising?

Sen. Lockyer: That seems to be the case. For a lottery that generates the kind of revenues that we've experienced, seem to depend on massive advertising budgets.

Q: [D]oes that send the wrong message, though? Relative to gambling activity?

Sen. Lockyer: Yes.

Q: Tell me how?

Sen. Lockyer: Well, it is the sponsored gambling. It's not a private sector activity that we might monitor and regulate and keep legal. It's the sponsored gambling. And many of us think that that's an inappropriate message to be coming from government.

Q: Well, it's funny that you should say that, because it just so happens that the lottery people keep insisting to us that they are not in the gambling business, they are in the entertainment business.

Sen. Lockyer: Well, of course, the card rooms and the race tracks will also argue that they're an entertainment business. Now, that doesn't mean that it's not both. That, as we started this discussion, that gambling can be entertaining. And so they're in both the gambling and the entertainment business.

Q: Do you sense a tad of denial there on the lottery's part?

Sen. Lockyer: Probably.

Q: We've been told, full scale, Nevada style gambling is inevitable here in the state of California. Do you agree with that?

Sen. Lockyer: No.

Q: Tell me why.

Sen. Lockyer: Well, I don't think voters want it. The current mood, at least, seems about two to one, opposed, to the casino style gaming and whether it be a slot machine in every corner store and grocery and the movie, in the gas station and so on. That kind of -- that pervasive gambling environment is something that most Californian's don't want. There are some that think it would be OK to have a limited geographical gaming in California so we wouldn't send all of our business to a neighboring state, as in any tax benefits. That maybe you could have some small amount of casino operation in California. There are some that are for that.

The problem is this me, too, problem. Once you would allow that at all, it's very hard to see how you would stop it from spreading throughout the state.

Q: Once there's a crack in the door, how do you keep the door shut again.

Sen. Lockyer: Right.

Q: Well, what about the arguments that we are losing six billion dollars a year to the state of Nevada. Why are we letting them take all our money? We should have that money here in the state of California. No?

Sen. Lockyer: Well, it's true we are losing a substantial amount. Of course, Nevada has to also pay for all of the law enforcement and other problems associated with the gaming industry, but it looks like they pay for a lot of their state government. And we do in traditional taxes that are, arguably, too high because we're losing the revenues. But it's just not something Californian's want.

Q: Even if they're losing...

Sen. Lockyer: They're willing, I think, by and large to sacrifice the revenue potential in order to keep what they think is a more wholesome, family-type state. That's what Californian's [inaudible].

Q: Do you buy the economic argument about that revenue loss?

Sen. Lockyer: Yes.

Q: Is that real money that money is going there? Because I hear it both ways. And I'm wondering [about] your opinion as to whether or not the six billion that they tracked Californian's in Nevada is actually the state?

Sen. Lockyer: Well, certainly, some goes to Nevada. That would go anyhow. Nevada, I think now, sees itself, not just as a casino, but these entertainment complexes where there's show and people go, basically, for a vacation. Some would do that anyhow. But there is still some revenue loss. It's hard to measure exactly how much, but I think it's pretty convincing there's some. Not enough, in my view and the view of most Californian's, to justify having a casino-type environment throughout the state.

Q: But back to that...problem...[T]hat's what happened out in the Midwest. Iowa had it. Then Illinois had to have it because Indiana had it -- the exact same thing.

Sen. Lockyer: Well, I -- as someone who follows the stock market -- I know that gaming stocks are hot right now. And they're being recommended and people are buying them and their values are going up and so on. But there's a whole different argument that you hear from economic historians, that these matters come in cycles. And that while we may be on the up-swing of gaming right now...certainly, in southern California, we probably maximized or saturated the market. [In] Northern California there might be a little bit of room left. But that when there's a down turn, it's going to cause severe impacts on these businesses, if we're saturated now.

Q: There's something like five billions worth of new properties coming on line in Vegas, alone, in the next eighteen months. Are you suggesting that they're going to hit the wall here?

Sen. Lockyer: Well, I don't know about Las Vegas, because they have a different environment and therefore aren't all over the planet to their complexes. But in California, and many of these other states with an expanded -- the little level forms of gambling -- there's potential to have a dip in consumer demand that portends very severe economic damage to those industries.

Q: Well, thinking about expansion, do you think that the, the race tracks and the card rooms who have built extra space to accommodate slot machines are on thin ice?

Sen. Lockyer: I think it's a speculative investment.

Q: Think it's going to happen?

Sen. Lockyer: But it's speculative

Q: Let's get back to your bill. Do you think you're going to get it to the Governor's desk this year?

Sen. Lockyer: Yes.

Q: Tell me why you think that.

Sen. Lockyer: Well, I think there's general agreement that we need to enhance our regulatory activity and enough willingness to avoid all of these special interest hitch-hikers that I think we can get it done in time and quick.

Q: In terms of the difference between the -- well, I guess what is called the Attorney General's bill and your bill -- where are the sticking points?

Sen. Lockyer: OK. The Attorney General's bill requires a local 2/3 vote to have a card room. Mine is a majority vote. I assume his is just predicated on opposition to card rooms. Mine is reflective of the fact that the core philosophy for me is equality. And I'm offended when one person's vote counts twice as much as another person's vote. I just don't think that's right. I don't think it's fair and so on. I'm a majoritarian. That's a difference. He has this super structure at the top, with a lot of full time or part time, but full time salary Commissioners. And I think we can regulate better just by enhancing the investigators and auditors in the Attorney General's office. Things of that sort are the principle differences.

Q: Where then, if you're going to get a bill out to the Governor this year, do you see the ability to bargain? I mean, what are you going to give? What does he going to have to give?

Sen. Lockyer: Well, the Attorney General doesn't have a single vote in the Legislature. And so, my guess is, that the final product will probably be closer to that which Governor Wilson and I have indicated we prefer...

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