Bootleggers & Baptists: XXXVIII- Prop. 5 (California, 1998)- Tribal Gaming

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Proposition 5 (1998):

Most legislative proposals seeking to permit or expand state gambling have generated controversy. Proposition 5 (1998) delivered on creating a notable amount of contention in California. The referendum aimed to allow tribes to form gaming compacts with the state, allowing them to provide Class III gaming (casino-style) services to their patrons. Per the provisions laid out in the  Indian Gaming Regulatory Act (1988) (IGRA) under Sec. 2710 of the act. The more granular objectives of the proposition included:

1. Allow tribal casinos to install or keep video-style slot machines, operate lotteries, and run card games.

2. Require the governor to approve such gambling arrangements with any tribe requesting them.

3. Require tribes with gambling operations to contribute a small percentage of their earnings to a fund benefiting statewide emergency medical care programs, communities near tribal casinos, or tribes without gaming.

4. Turn over to the tribes’ primary responsibility for overseeing the casinos. State regulation would be limited, but tribes would reimburse the state for the cost of state oversight.

https://www.sfgate.com/politics/article/STATE-PROPOSITIONS-Proposition-5-2983468.php.

The tribes had a lot to gain through the passage of Proposition 5, but in contrast, non-tribal gaming venues and adjacent industries had the potential to be big losers. This tension resulted in the Prop. 5 campaign engendering record-setting election spending in California. Per an October 1998 report, surpassing the spending on insurance reform bills in 1988, amassing a gargantuan $84 million in campaign expenditures. The rivalrous campaigning of tribal and non-tribal interest groups lays down the substrate for Bootlegger and Baptists’ (1983) coalition dynamics. The union of business and moralistic factions are most salient on the side that opposed the referendum. Since gambling is associated with crime and moral decay, attracting Baptists to act as moralizing agents is like shooting-fish-in-a-barrel. Once a curious individual dives deeper into it, the invested interests of the opposition become a web of predictable and unlikely Bootleggers begins to emerge.

The Baptists:

The most conspicuous moralistic voice in the anti-Prop 5 campaign was Stand Up for California, a grassroots political action organization with conservative leanings. Since 1996, the organization has been a vocal opponent of expanding tribal gaming. The organization even acted as a consortium of moral anti-Prop 5 arguments, publishing articles ranging from trade associations, law enforcement organizations, and even the California Council on Alcohol Problems expounding upon the ills of tribal gaming. It is even suggested (on the California voter Information Guide not by Stand Up) that environmental protection issues; resulting from tribal gaming establishments being exempt from California environmental regulations (p.23). The implication is that environmentalists would object to the measure. The 1998 Voter Guide indicates a diverse array of moralistic arguments against Prop. 5. Including but not limited to the potential for crime, violation of state labor laws, the lack of bargaining power on the part of local citizens/governments, the lack of taxation, and even arguing that the revenue gained from gambling proceeds only helps a minority of tribally affiliated Indians (p.21-23).

The Bootleggers:

The organization Stand Up reduced its political activity during this campaign to avoid cooperating with “…Nevada gambling interests…”.; demonstrating the organization’s commitment to moralistic communitarian causes. Regardless of whether they wanted an alliance with gaming interests, simply by taking a passionate position on the issue, they formed a tacit coalition. However, the relationships between the various varieties of Bootleggers are far more intricate than the networks of Baptists. It is open to debate whether some of these actors are Bootleggers, Baptists, Dual-Role Actors, or even if they are Covert Bootlegger (p.190).

The Bootleggers with the most linear relationship to the anti-referendum campaign are those with overt ties to the gaming industry. Several in-state interest groups donated money to shutdown Prop. 5. The involvement of gaming interests in the appurtenant state of Arizona and nearby Nevada is attention-grabbing. It is easy to surmise that many of these firms feared a loss in revenue from California residents having more local casinos. One notable gaming firm that contributed to the campaign was Aztar, the now-defunct gaming and hospitality management firm previously headquartered in Phoenix, Arizona (p.3-4). The list of luminaries included donors such as Caesars Las Vegas, the Rio, and Hilton Hotels (p.4). A careful observer may find it puzzling that a construction company based out of Framingham, Massachusetts (p.4) donated to the Prop. 5 counter-campaign. That is because the Perini Building Company built many of the famous casinos in Las Vegas, including Luxor and the northern expansion of Caesars Palace (p.5).

Another group backing the opposition was the labor unions. Many readers may question what organized labor would have to gain through blocking tribal gaming? The unions had two main objectives in the opposition campaign. First, the unions operated under the political action organization COPE (Los Angeles County Council on Public Education) since “…Indian casinos are not required to apply the National Labor Relations Act guidelines as other private employers are..” (p.24). The second reason why the tribes created such a powerful enemy was by the fact that “… many tribes refused to bargain with unions…” (p.24). Keeping in mind the doctrine of tribal sovereignty, they were well within their rights to refuse such negotiations; but they engendered a Prisoner’s Dilemma. Through working against the unions, the tribes incentivized organized labor to defect by working against their interest in an uncharacteristic (p.24) amount of activism devoted to defeating a tribal gaming bill.

Conclusion:

Despite the best effects of the opposition campaign, Prop. 5 still passed in November 1998. The measure achieved victory by winning 62.38% of the vote, leaving the opposition at 37.62%. This demonstrates that even calculated and strategic counter-campaigns cannot assure success in the political arena. It also should be noted that the tribes did overall spend more on Prop. 5 advocacy than their opponents did refute it. While it is shrewd to avoid any social justice justifications for permitting tribal gaming, but for many tribes, it is crucial for their economic development. Native Americans, as of 2020, have the highest rates of poverty among any ethnic group living within the United States. Loosening regulations constraining tribal gaming is a tenable solution to help improve the economic circumstances of native peoples. Versus relying on handouts or ill-fate government programs that could only exacerbate their current economic struggles, we are allowing indigenous people to help themselves by getting out of their way. It is also worth noting that tribal casinos are not “for-profit” in the traditional sense. They might not overtly operate as charities. The casinos are “state-owned” since the establishments are owned by the tribal government. The proceeds function like tax revenue, funding infrastructure, programs, and other tribal initiatives (p.2).