Golden Acorn Casino. Will they get unlimited slot machines and will they be house banked?
Eight Indian bands in San Diego County now operate casinos in San Diego County, more than in any other county in the nation. And if bands in Jamul and Santa Ysabel have their druthers, that number will soon climb to ten. Before 1983, when the Sycuan band of Kumeyaay Indians opened a bingo parlor on their Dehesa Valley reservation, there were none. Sycuan, soon followed by the Viejas and Barona bands, were among the forerunners in tribal gambling in the United States. But the story started when Seminole Indians opened a bingo hall on a reservation in Broward County, Florida. When the county sheriff threatened to shut down the bingo hall, the Seminoles sued. Ultimately, an appeals court found that, since the state of Florida regulated but did not prohibit bingo in other settings, it could only regulate, not prohibit, bingo on the reservations. Don Smith works as the director of security at the Campo Band's two-and-a-half-year-old Golden Acorn Casino. Before that, he worked for a number of tribes in the Pacific Northwest as they launched casino ventures. He explained that, as a result of the Seminole vs. Florida case, "The tribes have got to have a compact with the states to have their gaming. That's how the states can dictate what kind of gambling can happen on the Indian reservations."
Though the story of Indian gaming begins in Florida, its most famous passage takes place in southeastern Connecticut. That's where, in 1986, the tiny Pequot tribe, which had no full-blooded members, started a bingo hall. In 1992, the Pequots opened Foxwoods Casino, which is now said to be the most lucrative single casino in the world. "It's unreal," Smith said. "Beyond huge." Ed Sites, Golden Acorn's marketing director and another veteran of the Indian-casino industry, said, "It's basically a city now. I don't know how many hotels and golf courses they have. It's bigger than anything in Atlantic City and Las Vegas."
That raises the question of whether one (or all) of our San Diego Indian casinos could become Foxwoods West or Las Vegas South. Nikki Symington, spokeswoman and consultant for Viejas, says no. The reason goes back to the compact established by Proposition 5, which was passed in 1998. The compact places a limit on the number of slot machines allowed in Indian casinos. "We have 2000 slot machines [at Viejas]," Symington explained. "That is the maximum number of slots we can have. The tribes and the governor agreed to that limit."
An average Las Vegas casino has upwards of 4000 slot machines. And, Sites explained, "In every gaming jurisdiction, 80 to 90 percent of the revenue comes from the machines. It's a universal rule of thumb."
However, ongoing negotiations between Governor Schwarzenegger and seven of the state's gaming tribes -- including Viejas, Pala, and Pauma in San Diego County -- may allow those tribes to have an unlimited number of slot machines. In return, they will pay fees to the state as high as $25,000 per machine per year.
Since the passage of Proposition 1A in 2000, which removed Indian tribes from California's prohibition on "casino-like gambling," the gaming machines themselves have been identical to those found in Las Vegas casinos. "Before that," Sites said, "They ran only class-two games in California. Now, we're running class-three games, which are more sophisticated gaming devices. They run on computerized random-number generators."
Smith said the difference in class two and class three gambling machines isn't obvious to the casual observer. "It's in the way that you wager," Smith said, "and the way the wagers are paid out." "Prior to the compact," Symington explained, "we didn't have slot machines. We had video-lottery terminals. They work like a lottery because the awards, the prizes, are based on the collection of all of the players. They aren't house-banked. They look like slot machines, though no money comes out." Video lottery players received payout tickets from the machines.
Table games such as poker and blackjack, before the compact was signed, were not banked by the Indian casinos either. Payouts were based on how much the players bet. "That was then," Symington said, "but along with slots, we got the right to do house banking -- both of our games and of the machines."
But along with the 2000 slot-machine maximum, the compact placed limits on the table games the Indian casinos could offer. "We do not have any dice games, so no craps," Symington explained. "We can't have baccarat, roulette, and that kind of stuff. It doesn't make sense, but we don't have them."
Gaming-wise, the absence of those table games is the only difference between local Indian casinos and Las Vegas casinos. Asked why those games were excluded from the compact, Symington answered, "No reason. It was part of the give-and-take of negotiations."
The biggest difference between Las Vegas casinos and local Indian casinos? How revenues are spent. While Nevada casinos are owned by a corporation that may spend the profits as it pleases, gaming tribes must spend their revenue in one of five ways. "Those five areas are to actually underwrite their business. There is a cost to that," Symington explains. "Then there is a cost for other economic diversifications; the federal law encourages the tribes to diversify. An example would be our outlet center. That is a legitimate use of casino revenues by a tribal government."
Symington continues, "The second [legal spending area] is for any [tribal] government expenditure -- such as health care, education, senior care -- that serves the entire community. The third allowable use of our money is that we can give money to local government. The fourth is we can give money to nonprofits. The fifth is to share revenues with tribal members. The perception that the tribes have is, 'We own our land communally. A collective general membership votes on all land decisions, and if we make money off of our land or through our business, we would like to be able to distribute the benefits back to our tribal members.'
"Although there is a lot of controversy about it," she concludes, "what that basically does is ensure that there isn't one tribal member at Viejas that qualifies for federal aid programs."