PALA INDIAN RESERVATION -- Inside the Pala Band of Mission Indians' worn tribal hall, chairman Robert Smith holds up plans for a $42 million casino his tribe hopes to open next year.
Today, the casino site is just a rock-strewn, deserted patch of land the Palas once used as a public campground. But if everything goes according to plan, the bare land will soon sprout a rustic-looking casino fronted with river rock, a beacon for gamblers living 45 minutes away to the south in San Diego.
"We could build up our current water lines and sewer systems, upgrade our television service, expand most everything we have from the Boys and Girls Club to the tribal hall to the child care," Smith says about the potential benefits of a casino.
Seven miles down a winding, narrow road from Smith's office, Mark Macarro also sees gambling as the path to economic prosperity for his tribe, the Pechanga Band of Luiseno Indians.
Macarro, the Pechanga chairman, shows a visitor plans for a new casino the tribe hopes to build to replace its current makeshift gambling hall -- about 50 trailers stuck together with their walls torn out and a facade tacked on the front.
Opened in 1995, Pechanga's casino -- with 1,333 video slot machines -- already has made a huge difference. Before gambling, Macarro said, "Most people here at Pechanga were eligible for (government) food commodities on a monthly basis. After the first year of our casino, nobody was eligible for it."
Both Macarro and Smith see casino gambling as crucial to improving the lives of their tribal members. But they have taken opposite positions on Proposition 5, the Indian gambling ballot measure that's shaping up as the most expensive initiative battle in California history.
The bitter split between a handful of tribes allied with Pala and most of the other tribes operating casinos in California has added confusion to the debate over Proposition 5, which would legalize the current video slot machines and blackjack games played in Pechanga's casino and 40 others statewide. The ballot measure also would force future governors to accept an unlimited number of video slot machines on tribal lands.
Gov. Pete Wilson and federal authorities maintain the devices are illegal and are currently attempting to seize them.
Backing Proposition 5 are more than 80 of the state's 105 tribes, including nearly all the tribes with casinos, which generate an estimated $1.4 billion in annual revenues. They have barraged Californians with television commercials about the benefits of Indian gambling and how Nevada casinos funding the opposition campaign are trying to shut down competition from tribes.
On the no side, Nevada casinos have joined forces with California cardrooms, racetracks, labor unions and church groups. They argue that Proposition 5 represents a vast expansion of unregulated gambling.
The No on 5 campaign scored a major coup when several Indian tribes, including the Palas, came out against the initiative, saying it isn't necessary to the survival of Indian casinos. The Pala tribe advocates an alternative deal that it struck with Wilson to allow limited gambling on Indian reservations.
Pala leaders have subsequently appeared in television ads of their own, as has Paula Lorenzo, chairwoman of the Rumsey Band of Wintun Indians in Brooks.
Lorenzo said the Rumsey tribe has embarked on an ambitious expansion of its Cache Creek Casino, and doesn't think Proposition 5 is necessary for it to thrive. She said tribes backing Proposition 5 "aren't reading the fine print."
This public denunciation of Proposition 5 -- paid for by Nevada casinos -- was greeted with outrage by tribes supporting the measure.
"There was no goddamn reason for them to have done what they did. They got their compact (with Wilson). Be done with it," Macarro said. ". . . They didn't have to go 'No on Proposition 5.' Except that's probably the most effective strategy to confuse the voters of this state: to pit Indians against Indians."
The 35-year-old Macarro has become Proposition 5's envoy to California. Appearing on billboards and in television ads with a neat black ponytail and bolo tie, he has extolled the economic benefits of Indian casino gambling and attacked the Pala agreement as "a secret back-room deal" that serves the interests of Nevada.
Macarro, who holds a bachelor's degree in political science from the University of California, Santa Barbara, says passage of Proposition 5 is necessary to ensure the long-term future of Pechanga and other tribes. The tribes have reaped enormous economic benefits from gambling, he said, but those gains are now threatened by government attempts to pull the plug on the tribes' lucrative video slot machines.
On the rugged, 4,500-acre Pechanga reservation, the benefits of tribal gambling are obvious. The welfare rolls have been reduced to zero. A brand new firetruck awaits action in a new fire station. The tribe's children and baseball players enjoy a new sports park equipped with modern playground equipment, picnic tables, a baseball field and scoreboard.
Twenty-two Pechanga members now attend college or trade school with tribal scholarships. And most significantly, each adult member of the Pechanga tribe now receives a monthly payment of "less than $3,000," Macarro said.
Brand-new roomy houses and double-wide trailers now mix with the dilapidated campers and worn ranch homes on the Pechanga reservation, where 420 of the tribe's 1,263 members reside. Other tribal members have chosen to build homes outside the reservation.
Proposition 5 has taken on the trappings of a crusade here. Inside the Pechanga casino, workers wear "Yes on 5" buttons and man a table registering gamblers to vote.
"Our first weekend we got 300 (new voters) on site," said Donna Barron, a tribal member spearheading Pechanga's grass-roots campaign.
The view seven miles up the road at Pala is vastly different. There, the tribal hall sports a "No on 5" sign and leaders wear "No on 5" buttons.
Smith, 37, argues that defeat of Proposition 5 is in the best interest of his tribe. If the measure passes, it will be tied up in the courts for years, he predicts, continuing the legal cloud over Indian gambling. If that happened, he says, the lender that has agreed to finance Pala's casino would likely rescind its offer.
California's Constitution includes a clause that was inserted into the 1984 Lottery Act. The clause bans "casinos of the type currently operating in Nevada and New Jersey." Proposition 5 is a statutory initiative and thus cannot override the Constitution.
Even if Proposition 5 survives a constitutional challenge, Smith predicted, Indian people could wind up getting hurt. Removing the state's ban on slot machines would prompt cardrooms and racetracks to besiege the Legislature and ask for slot machines too, he said.
"I believe Nevada and us have a common interest in keeping Indian gaming on our lands, but our number-one priority is our people," Smith said. "If they (other tribes) want to sling the mud, let them sling it, because I know what we're doing is right."
Pala leaders say they couldn't just stay neutral on Proposition 5. This is especially true, they say, because another Southern California tribe, the wealthy Agua Caliente Band of Cahuilla Indians in Palm Springs, has begun collecting signatures for a ballot referendum aimed at undoing the agreement they reached with Wilson.
They chafe at being labeled traitors.
"The thing I'm upset about is we're trying to do our thing according to the laws of California, and we're condemned for it," said King Freeman, who chaired the Pala tribe for 19 years.
Both sides in the battle over Proposition 5 are spending enough money to make it the most costly measure in state history. As of Sept. 30, tribes backing Proposition 5 had raised $42.7 million. Most of it has come from a handful of Southern California gambling tribes, such as the 145-member San Manuel Band of Mission Indians, which kicked in $20 million.
The opposition campaign, meanwhile, had drummed up $15.5 million from the likes of Hilton Hotels, Circus Circus and Mirage Resorts. Nevada casinos oppose Proposition 5 because they fear losing their hold on California gamblers.
The story of Indian gambling in the state began around 1980, when the tiny Cabazon Band of Mission Indians opened a card room on its reservation outside of Palm Springs. A high-stakes bingo hall followed soon after.
California threatened legal action. But Cabazon won a landmark victory in 1987, when the U.S. Supreme Court ruled that Indian tribes had the right to run gambling operations in states where such gambling was legal somewhere in the state.
Alarmed at the prospect of unregulated casino gambling on reservations, Congress responded by passing a law that created the framework for casinos on Indian lands, but also gave states some control over the tribes. Indian tribes are considered sovereign nations and are not subject to many of the state's civil regulations.
The 1988 federal Indian Gaming Regulatory Act required tribes that wished to conduct casino gambling to first reach agreements -- or compacts -- with their states. IGRA also requires that gambling profits be spent to improve the lot of the tribe.
Since the passage of IGRA, Indian gambling has exploded into a more than $4.5 billion industry. But in several states, including California, IGRA's passage also marked the start of a protracted legal battle between state officials and Indian tribes over what sort of gambling should be permitted on reservations.
"I'd like to see IGRA go away," Macarro said. "We didn't have the resources to fight IGRA when it happened. That goes to the core of this debate."
Faced with the restrictions imposed by the new federal law, California tribes pursued a legal line of reasoning that has led to the current standoff, in which 14,000 video slot machines whirr away in Indian casinos despite protests from state and federal authorities that they violate the law.
The tribes wanted lucrative video slot machines for their new casinos. But Wilson, who dislikes gambling generally, refused to negotiate for them, citing the state law barring slot machines. About 40 of the state's 105 tribes went ahead and installed them anyway.
In doing so, the tribes argued in various court cases that the video slots were no different than games the state Lottery played or was permitted to play. Eventually, the courts ruled against tribes.
After repeated pleas from Wilson, who has no authority to enforce state gambling laws on Indian land, federal prosecutors in May filed lawsuits against 27 tribes, seeking to shut down their video slot machines. Those actions are pending before judges around the state.
Yet while the Indians were losing in court, they had gained political influence in Sacramento that proved difficult for Wilson to ignore. Legislators from both parties were growing increasingly receptive to the tribes, who were suddenly showering them with millions of dollars in campaign contributions and employing huge numbers of people in their districts.
Finally, Wilson agreed in August 1996 to open negotiations with one non-gambling tribe -- the 857-member Pala Band, which was intended to act as the proxy for gambling tribes. In return, California tribes agreed to support Wilson's legislation to regulate the card club industry.
But to reach agreement with Wilson, Pala leaders accepted compromises that sparked outrage among many of the tribes that already had casinos and didn't want to see their profits eroded.
Represented by Howard Dickstein, a Sacramento lawyer, Pala abandoned the demand for video slot machines and instead began negotiations with Wilson's people for a new type of gambling device that would operate on a system similar to the state Lottery but offer the fast play, bells and whistles of a slot machine. The device, which has never been used commercially, will be tested in casinos this month.
Pala also agreed to numerous other items Wilson sought, including a cap of 19,900 on the number of gambling machines statewide. Each tribe in the state would receive an allotment of 199 machines. Gambling tribes could obtain up to 975 machines by leasing the rights from non-gambling tribes. Tribes that chose not to open casinos could still earn up to $1 million a year from such leases.
In addition, Pala signed off on provisions requiring it to concede some of the traditional notion of sovereignty in the name of greater cooperation with the outside world. For instance, the agreement requires Pala to provide workers with unemployment insurance, disability and workers' compensation insurance. And the tribe would have to reach written agreements with local communities on such items as traffic control, law enforcement services and construction standards.
In a shrewd political move, Wilson also successfully pushed for a provision requiring Pala to allow employees to join a labor union. Suddenly, Democratic lawmakers such as Assembly Speaker Antonio Villaraigosa were torn between wanting to help Indians and wanting to help their traditional organized labor base. With help from Villaraigosa and state Senate President Pro Tem John Burton, Pala and 10 other tribes that had subsequently signed similar agreements with Wilson won legislative ratification of their deals.
When the Pala tribe announced its agreement with Wilson in March, the U.S. attorneys finally acted. They warned gambling tribes to accept a Pala-type agreement or unplug their machines and try to get their own deal. The majority of tribes responded by throwing their support behind Proposition 5.
With just a few weeks to go before the deadline to qualify initiatives, tribes spent $8 million in an aggressive campaign to put Proposition 5 on the ballot. Worried they wouldn't have enough signatures, backers made the initiative a statutory -- rather than constitutional -- measure, which requires a lower threshold of signatures. In hindsight, they say, this was a mistake, because it left Proposition 5 open to a certain constitutional challenge.
But even if the measure is hung up in the courts, a favorable vote from the public would give tribes' a powerful tool to negotiate a more favorable agreement with the next governor, said John Magee, a Pechanga tribal council member:
"The will of the people -- that's great leverage."