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October 28, 2002

Host: Michael Grant
Topics:
Indian Gaming Initiatives Special
A report on Props. 200, 201 and 202, which deal with Indian gaming issues.
In-Studio Guests:
Jason Rose, representing Proposition 200;
Chuck Coughlin representing Proposition 201;
David LaSarte for Proposition 202

>> A positive future for Indian gaming in our state. Proposition 202 --

>> It allows us to continue to have gaming on our own land.

>> Michael: It's the most expensive election battle in the history of Arizona.

>> We hope Arizona voters will support our 17-tribe Indian self-reliance initiative.

>> Michael: Backers of three competing gaming initiatives have spent more than $37 million to win your vote.

>> We have to take a look at these gambling propositions because we don't want to pay for taxes.

>> Joe Arizona: Over the air, on the ground, by telephone and mail, the deluge of advertisements has been relentless and for good reasons. At stake? Billions of dollars in profits from gambling.

>>Advertisement: And prop 200 is the only one that gives all Indians their fair share of the benefits of tribal gaming.

>> Michael: The battle of the initiatives has gone from promoting the benefits of each to responding to opponents' negative accusations.

>> Advertisement: Once again the out of state owners of Arizona racetracks are running negatives ads attacking Indian gaming and prop 202.

>> Michael: The question is... have the campaigns prompted you to vote yes on any of the initiatives or none at all? Good evening, I'm Michael Grant. Welcome to "Horizon." Tonight we'll compare each of the three gaming initiatives and let representatives from each debate their merits. We will also hear what opponents to all three gaming measures have to say. First an explanation before we begin our discussion. It is an answer to a question that many of you have been asking this fall. If more than one initiative passes, the one with the most votes wins. If all fail, any new Indian gaming compacts would be negotiated by the governor. Joining me now representing proposition 200 is Jason Rose, Chuck Coughlin represents proposition 201 and here is David LaSarte for proposition 202. We start by taking a look at how each initiative expands gaming.

>> Paul Atkinson: Here's how the three gaming initiatives stack up in terms of compact-length, numbers of casinos, slot machines and table games. Proposition 200 calls for a 20-year gaming compact which tribes can automatically renew for a total of 40 years. Prop 201 calls for the current length of compacts which is 10 years. Prop 202 establishes a 10-year compact that tribes can automatically renew plus has a three-year renegotiation period for a total of 23 years. When it comes to the number of casinos, prop 200 allows each tribe up to three casinos. That means a total of 45 for the 15 tribes that offer gaming. Proposition 201 allows each tribe one to three casinos based on tribal population for a total of 37 casinos. Plus a total of 10 race casinos or tracks of offer slot machines. Proposition 202 allows tribes one to four casinos based on population and location for a total of 29 casinos. Each proposition would increase the number of slot machines per tribe. Prop 200 allows each tribe 1,000 to 1400 slot machines based on tribal population for a statewide total of 21,492 slots. Prop 201 allows each tribe 600 to 2400 slot machines based on tribal population for a total of 19,600 slots. Tracks will get 550 to 950 slots per facility, adding another 6450 slots. Upping the statewide total to 26,050 slots. Prop 202 gives each tribe 475 to 1400 slot machines based on tribal population. For a total of 21,492 slots. All three initiatives allow for non-gaming tribes to transfer slot machines to gaming tribes. Prop 200 gives non-gaming tribes an exclusive five-year period before other tribes can transfer their machines. Prop 201 requires the transferring tribe to get 50% of profits per machine but limits casinos to 1,000 slot machines, including transferred machines. Prop 202 establishes a formula for the number of transferred slots a tribe can use, as little as 40 for one small rural tribe up to 1020 for the largest urban gaming tribe. Each proposition allows tribes to offer table games. Prop 200 allows all table games, including blackjack, poker, craps, baccarat and roulette but limits the number of tables to only 20 per casino. Prop 201 allows tribes to offer blackjack and poker. Rural Indian casinos are limited to 50 tables, urban Indian casinos 75 tables. Prop 202 allows blackjack and poker on 75 tables at rural casinos, 100 tables at urban casinos. The amount of slot machines and table games will automatically increase as the population grows. Prop 200 calls for annual increases each year starting in 2006 by the percentage of increase in statewide population. Prop 201 has the number of slot machines at racetracks and slots and table games at casinos increased every five years based on the percentage of increase in state population starting in 2008. Prop 202 also increases the number of gaming devices on state population increases every five years.

>> Michael: All right. I want to the ask about some of those issues but first let me go quickly around the table and, Jason, tell me why people ought to vote for proposition 200.

>>Jason Rose: Well, we're going to talk about a lot of issues tonight, Michael, but they all take a distant second to the Benjamins. As the illustrious Jerry McGuire would say, "Show us the money." In the case of proposition 202, what they want to do is keep the money with the bigger bun rich tribes and we think that's wrong. We don't think that 20% of Arizona Indians should get 80% of the profits, $800 million. Money that's being funneled as soft money into political parties. Money that is so incredible in its sum that they can offer to pay -- help fund a football stadium for Bill Bidwill. We think the priority moving forward should be with the rural Indians, the poorest of the poor, and the only way to do is that to vote yes on prop 200.

>> Michael: Why yes on prop 201, Chuck?

 

>> Chuck Coughlin: Three reasons, Michael. Number one, it provides the most revenue to all of Arizona. 300 million dollars a year and 150 million approximately of that going to deficit reduction. Number two, it's the only initiative which requires public disclosure of gaming revenues on a billion-dollar a year industry. We think that's not only smart but prudent. It's the right choice to make. Finally, the term of the compact. Given the explosive nature of gaming across the country, being the fast -- one of the fastest growing industries in the country, we think that a 10-year term is appropriate rather an 23-year term or a 40-year term. We think would that give voters in Arizona and policymakers a chance to review the decision in a timely manner.

>> Michael: David, why should I walk into the voting booth and vote yes on 202.

>> David LaSarte: Mike, what's getting lost in all discussion is why these three initiatives are on the ballot at all. The reason they're on the ballot is because next summer, unless something happens, unless something passes, Indian gaming becomes illegal, and casinos will have to start shutting down next summer. You know, if that wasn't true, none of these initiatives would be on the ballot. The tribes would be more than happy to not have to run a ballot initiative. If there is one things the voters need to remember is that one of these measures has to pass in order for Indian gaming to continue safely.

>> Chuck Coughlin: That's absolutely not true.

>> David LaSarte: It absolutely is true.

>> David LaSarte: No.

>> Chuck Coughlin: That's being disingenuous of the voters when you say.

>>David LaSarte: 202 is the only balanced approach. It's supported by 17 tribes, who represent over 90% of the Indians in the state, supported by every gaming tribe in the state except for CRIT. It does tighten regulation. It maintains reasonable limits, shares money with the state and non-gaming tribes, it does require full disclosure and open books to gaming regulators.

>> Michael: Let's go to gaming expansion. Proposition 202 expands gaming to include blackjack. That's a new feature. Why should Arizonans vote for that, particularly an Arizonan who is maybe concerned about preserving the status quo, not going further?

>> David LaSarte: Well, under 202, blackjack is included, but at the same time, the tribes have voluntarily limited the total number of facilities that can be in the state. They voluntarily made it so that there will be no new casinos in Phoenix, only one additional casino in Tucson. Voluntarily kept limits on how large a casino can be. And voluntarily placed limits on poker operations that had no limits before. So blackjack being added is just part of this balanced approach which allows the tribes to move ahead and keep doing what they have been doing but at the same time provide benefits foot non-gaming tribes, provide benefits to the state.

>> Michael: Jason, proposition 200 is the most aggressive on this subject. It allows all forms of gaming, roulette, craps, you know, et cetera, it has table limits to it, but it really takes it to a new dimension. Why is appear good idea?

>> Jason Rose: First of all, the only balanced approach that prop 202 brings to Arizona vote certificates a balanced one for the urban tribes that continue to get $800 million a year and 80% of the Indian gaming benefits and that's wrong, David, but more specify tyke your point, we think prop 200 is the most powerful tool for rural Indians that Arizona has ever had, and to the extent that we expand gaming on the reservations it's to the direct benefit of rural Arizonans, not the big six urban tribes that are currently getting all the benefits and have a near monopoly on the Indian gaming situation in Arizona.

>> Michael: Jason, you got machine transfer provisions in proposition 202, so I guess I don't follow the argument that it doesn't --

>> Jason Rose: Let me tell you the argument. Is that the lobbyists and consultants of 202 who sat down and negotiated that deal with Governor Hull have a near stranglehold and monopoly on how those transfers from the non-gaming, those rural tribes, happen. Furthermore, the urban tribes sat down and negotiated this massive tax scheme that the rural tribes can't afford. They cannot afford it.

>>David LaSarte: Absolutely false.

>> Michael: Let me allow Chuck to weigh in. The concern on prop 201 is different because it pulls its off the reservation and there's a lot of concerns, particularly up in the turf paradise area, about extended hours, traffic, those kinds of concerns. Why sap good idea?

>> Chuck Coughlin: We will not run 24 hours. We will close at 1:00, we will follow bar hours, number one. Number two, on -- we're gambling already exists, Michael. It's class 3 gaming. Parimutuel wagering is class 3 gaming. In fact, that was one of the tenets of the decision that provided Native Americans the right to have slot machines in Arizona on the pretense we had class 3 gaming here already. I think the important part to get back to your question earlier on term, voters should understand that as your intro piece pointed out there is growth provisions in each of the initiatives and by the time you're done with the 23-year initiative say on prop 202, you will have over 3030,000 slot machines which is greater than the number in downtown Las Vegas. I don't think voters recognize that. Ours is a one-year growth measure at five years and then shuts down and allows the voters to review the decision.

>> Michael: David, quick retort.

>> David LaSarte: Some tribes do make more money because of others simply because of where they are located. That's common sense. Under prop 202, the amount of money each tribe would share with the state varies from between 1 and 8% and the smallest rural tribes like Mr. Rose's clients would only pay 1% because though rural tribes helped right 202. Every single rural gaming tribe in the state except CRIT helped right and supports 202.

>> Michael: An important component of each initiative is regulation, here is how they compare on that subject.

>>Paul Atkinson: The three gaming initiatives differ on regulations. Prop 200 gives more regulatory control to tribes allowing them to license employees who are tribal members and certify small vendors. Tasks currently done by the department of gaming. Prop 200 also makes tribal gaming offices responsible for investigating violations, not the department of gaming. Prop 201 would require the department of gaming to monitor and regulate all Indian casinos but makes the department of racing responsible for overseeing slot machines at racetracks. Prop 202 keeps current regulatory standards, but requires an online monitoring system be built so that the department of gaming could do real time monitoring of urban Indian casinos. By law, all tribes must report gaming proceeds to a state and the federal agency, amounts that are confidential. Each proposition differs in the amount of public disclosure of profits. Prop 200 keeps confidential each tribe's gaming profits but does make public the overall amount of money tribes give to the state in shared revenues. Prop 201 calls for full disclosure to the public of what each tribe and racetrack makes. Prop 202 calls for public disclosure of the overall amount of the money made by tribes but not individual tribal profits.

>> Michael: Chuck, why does it make sense to have the racing commission oversee slot operations? I think they're probably pretty darn good on urine tests on horses but does that translate well?

>> Chuck Coughlin: Yeah, it does. They actually have to look at the daily track revenues, they look at the handle which is reported every day, they look at licensure issues, they have the same kind of regulatory requirement. We simply put it in there, and I would suggest in a condensed version we would probably look at a condensed gaming department perhaps to save money for the taxpayers, but the bottom line is that on regulation, as your intro piece hit, we are the only proposition which requires full disclosure of gaming revenues on a billion dollar a year industry, full public disclosure. I think you cannot underestimate the value of that information. The public needs to be aware of and it that's why we put it in there. It was the central part of why prop 202 and the governor's proposal failed in the legislature, because legislative leaders wanted to know how much money was going in and they are not allowed under prop 202 to seep kind of information.

>> Michael: Dave, why keep it secret from the public? You disclose it to authorities, but why keep it secret from the public?

>> David LaSarte: The legislative proposal failed because the racetracks mounted a huge lobbying campaign to sink that legislation.

>> Chuck Coughlin: Based on disclosure.

>> David LaSarte: Like the last three years they fought in court to shut down Indian gaming, which again if none of the props pass, Indian gaming will become illegal unless something happens. As far as disclosure goes, the tribes report everything, always have reported everything to ADOG and the federal regulators and under 202 they're going to remember the statewide total to the public, so the people of this state will know exactly how much money is being made by Indian gaming in Arizona and how much money is being shared with the state.

>> Michael: Jason, Supreme Court says that prop 200 significantly weakens state oversight of Indian casinos. Why is that a good idea?

>> Jason Rose: I always enjoy when that at the same time we're doubling the funding for regulation. I don't think anyone has suggested in this debate that if bad things are happening in casinos and prop 200 happens that they won't be punished as they should be. I would just like to return very quickly to Mr. LaSarte. He keeps talking about 17 tribes and stuff. Mr. LaSarte, you represent the Arizona Indian gaming association, and just last week your former head, your former chairman, said that prop 202, so-called good initiatives for Indians, was a bad deal, and that prop 200 was a far better way to go.

>> Michael: If anything sets the three initiatives apart, although there's a lot of stuff, it's the amount of money each gives to the state. Here's a closer look at the amount of money and where it goes.

>> Paul Atkinson: Propositions 200, 201 and 202 differ on how much revenue they share with the state. Prop 200 requires casinos pay 3% of net profits. Prop 201 requires Indian casinos to pay 8% of gross profits and impose as 40% tax on racetrack slot machines. Prop 202 impose as graduated tax of 1 to 8% of net profits of Indian casinos. The three propositions also differ on where the money is spent. Prop 200 money is to be spent on college scholarships, senior healthcare programs, tribal senior healthcare and tribal education. Prop 201 revenues are divided up among the state general fund, reading programs, rural healthcare, Medicare prescriptions, college scholarships and emergency services provided by cities. Prop 202 money would be used for educational improvement, trauma and emergency services. Wildlife conservation, tourism promotion and economic development. In terms of the overall fiscal impact, here's how much money each proposition 2 raise. Legislative counsel estimates prop 200 could bring in up to $32 million annually. Prop 201, up to $195 million a year from racetracks and $137 million a year from Indian gaming. Legislative counsel estimates prop 202 could make $102 million annually for state and local governments.

>> Michael: Jason f I'm just going to the polls to vote the state's pocketbook, why do I vote for proposition 200?

>> Jason Rose: You're not going to. If you like the fact we give 18,000 college scholarships, you are probably going to vote for 200. But we don't give the most money to politicians and bureaucrats and we're very, very proud of that, because we say, Indian gaming was created to help the poorest of the four. 200 is about the tribes that can't afford to build new football stadiums, David, for Bill Bidwill. It's about building homes and schools and new shelters and we think that's where the priorities should be in Arizona moving forward.

>> Michael: David, he keeps sending you questions, so I'll governor you the opportunity, why -- you're sort of in the middle. Why is that an appropriate approach? Lot of states get much more than 8%.

>>David LaSarte: Lot of states don't get anything voluntarily. The fact here is that 202 is a balanced approach because 17 tribes worked for three years in drafting it. Rural tribes, urban tribes, gaming tribes, non-gaming tribes. The Navajo nation worked on drafting prop 202. Every single gaming tribe in the state except for CRIT helped to write prop 202, and that's why it meets the needs of all the tribes. At the same time, these tribal leaders wanted to be good neighbors to the people of the State of Arizona and that's why they set up a revenue sharing program with the people of the state to go to writ would help the most people, the classrooms of the state, the local school districts, as well as the other areas that have been talked about. But, again, every tribe in the state, gaming tribe, except for CRIT, helped write prop 202.

>> Michael: Chuck here, I think s one of the problems with the admittedly much larger amount of money that 201 delivers to the state. I am told the interior department has never approved a compact where the tribe has objected to forced revenue sharing. How good is that 100 million --

>> Chuck Coughlin: If they want to choose to maintain their current level of gaming, they would not be required under 201 to share any revenue. If they choose to increase the amount of machines, which is provided for in 201 and 202, then they would then fall under that. So it is not a subjective -- they are not forced to do so. I would say this, I've also never seen a department of interior reject the notion that would be popularly supported by an electorate to vote its gaming policy and its sovereignty as a state as a whole to govern the types of gaming that they would have and how it would be regulated and-out revenues are going to be shared. To answer your last question directly f you are going to vote the state's pocketbook here, you are going to vote prop 201. We are looking at a billion dollar state budget deficit next year. That's not just Native Americans, not just rural tribes, that's all of Arizona that's suffering from that problem and those are services and programs that are going to be cut next year. This is an opportunity to avoid tax increases and avoid budget cuts by thinking forward about how we apply gaming policy and what it mean to the future of Arizona.

>> Michael: Chuck in just a couple minutes we're going to have no on all three forces and I want to give each one of you an opportunity to respond to that. I think there's a couple different arguments that go on, the moral/philosophical one, also the one we have been discussing, reject all three and the governor can negotiate a Bert deal. What do you say?

>> Chuck Coughlin: I think 201 is the best answer. That's why we're here and that's why we're -- to debating this tonight. There is about consistently 30% of the electorate out there that has objected to gaming. When the fairness initiative ran in 1996, approximately 35% of the Arizona electorate voted no, and there was no funded campaign against that. You also noticed when the lottery is on the ballot, which it again is this year, about 30 to 35%. There is a core constituency out there of people who object to gaming on either moral grounds or some other grounds. But if you're looking for the best deal, there's no question in your mind that 201 is the best deal for Arizona.

>> Michael: Jason, vote no on all three --

>> Jason Rose: They have got it right in two of the cases but more specific to prop 202 there is a reason that proposition isn't in a free-fall -- is in a free-fall in the polls. It's because as people read it, 26,500 words, they don't like it, they don't like it because it favors the bigger bun tribes and seeks to lock in billions of dollars of profits for 20% of Arizona Indians for the foreseeable future. Prop 200 helps the poorest of the poor, the rural Indians and is the most powerful tool that Arizona will ever have to improve the welfare of those communities.

>> Michael: David, vote no on all three?

>> David LaSarte: Right now the governor can't sign compacts. The governor cannot sign compacts right now because of a lawsuit filed by the racetrack industry, which they have said they are going to appeal to the Supreme Court level is necessary. So right now, I keep saying it f none of these pass, Indian gaming compacts expire next summer and Indian gaming becomes illegal. People think that this is not true, but look back five years, six years, seven years ago, the early '90s, mid-'90s, Fife Symington refused to talk to the tribes and they had to go in and try to shut down casinos. One of these has to pass to ensure the future inform deny gaming.

>> Michael: We're out of time. David LaSarte, thank you very much for being here. Chuck Coughlin, my thanks to you. Jason Rose, good to see you. You have heard from proponents of the three gaming issues initiatives. Here now are opponents' arguments against the gaming propositions.

>> Len Munsil: It should be a fundamental rule of public policy that you don't try to solve social problems in society by creating a whole new class of social problems. The problems of economic deprivation, poverty, addiction, lack of education and healthcare in Arizona's native American community are significant and must be addressed that. But gambling is not the solution. Increased gambling leads increased crime statewide and increased suicide rates, increased bankruptcy, domestic violence and child abuse. We end up paying more taxes to solve the social problems that gambling creates. One final thought, gambling money corrupts everything it touches. That's why three of the last six mayors of Atlantic City and a recent governor of Louisiana have gone to jail over gambling corruption. In this election, pro gambling forces are spending 10 times more than has been spent on any election in Arizona's history. If we agree now to double the amount of gambling, then understand that the gambling industry will control every election for every office in our state from here on out. Please vote no on propositions 200, 201 and 202. Las Vegas is close enough.

>> Jeff Goscost: Thank you. We appreciate the opportunity to respond on behalf of itsabaddeal.com. Not only can you vote no on all three initiatives but you should. The result of that isn't the sky going to fall as some chicken littles are running around saying but instead you will allow the Native Americans and the newly elected policymakers that you're electing at this election to sit down at the table and come up with something that really is a fair deal for Arizona. First of all, it should have a time period that does not go over ten years, perhaps even five years like in Wisconsin, so we can address the problems as they arise. Secondly, it should not only be monetarily a fair deal for the state but also for the four out of five Native Americans that right now get no benefit from gaming in this state. Thirdly, there should be no expansion without a vote of the people. Not the automatic expansions that we see in these current compacts, and lastly, if you're not trying to hide anything, why aren't the books open? The fact is all three of these are a bad deal, you should vote no on all three. We can do better. We need a fair deal for Arizona.

>> Michael: Let me cover just one more time in case you are wondering what happens if all the initiatives pass or fail here is the answer. The state constitution mandates the initiative with the most votes becomes law. If all the gaming propositions fail, it will be up to the governor to negotiate new gaming compacts if that you missed any part of this debate, you can watch it online at www.kaet.asu.edu and click on election 2002. You'll also find information on the other ballot initiatives. Thank you very much for joining us on this Monday evening. I'm Michael Grant. Have a great one. Good night.