21 April 2002

Hull deals a losing hand to taxpayers

I would like to turn your attention to a good writeup by Steve Wilson in the Sunday AZ Republic concerning Jane Hull and her bid for a new Indian gaming setup. Not that I'm opposed to Indian casinos, or gambling in general, but I do think the governor is fumbling and bumbling again, and another alternative fuels fiasco is on the horizon.

The governor's deal would be spectacular for the tribes and a missed opportunity for Arizona taxpayers. If adopted, it would make the more than $200 million lost in the state's alternative-fuels debacle look trifling. Negotiating behind closed doors, the governor's office worked out a revenue-sharing plan with the Arizona Indian Gaming Association that allows a huge expansion of gambling at Valley casinos. Using a sliding scale between 1 and 8 percent, it would bring the state an estimated $83 million the first year, based on casino revenues of $1.5 billion. The agreement stipulates, however, that 88 percent of that money be spent on Native American programs.

Contrast what Hull's deal would give Arizona with the money being received in Connecticut and predicted revenue in New York. Connecticut last year took in $322 million, based on an agreement giving 25 percent of tribal casinos' slot machine proceeds to the state. In New York, legislation passed last fall calls for casinos to give 25 percent of all gaming revenue to the state. Estimates vary, but most expect New York will receive at least $500 million a year, once a half-dozen new casinos are opened. Are tribes in those states up in arms? Hardly. Connecticut's casinos are yielding close to $2 billion a year. The moneymaking opportunity in New York is so attractive that even out-of-state tribes have applied to build gambling halls. If you see 25 percent as excessive, think about this: If the state offered exclusive, long-term franchises in a highly profitable business and you had to hand over a quarter of your revenue to the state but would pay no state, federal or local taxes, the line of applicants would stretch from Phoenix to Yuma.

Also, in case you missed it, there was a featured "My Turn" column by Robert Hazard a few weeks ago that asked some questions on Hull's proposed deal that I haven't heard answered yet ...

If Hull's plan is accepted by the Legislature, for the next 23 years the Arizona tribes will have an exclusive right to operate cash casinos that extract an estimated $1 billion to $4 billion each year from Arizonans, tourists and the Arizona economy without paying one dime of federal income taxes, property taxes or state and local sales taxes.

There will be revenue sharing in lieu of taxes. But instead of paying the state a 25 percent share of gross operating slot revenues (minimum $100 million), as is now paid to the general fund of the state of Connecticut by the Mashantucket Pequot tribe or the 25 percent share of gross operating slot revenues (minimum $80 million) paid by the Mohegan Tribe, Hull proposes a paltry sliding scale of 1 to 8 percent of revenues.

Even worse, 88 percent of the state's estimated $83 million will be earmarked for Native American education and health care programs, community development programs heavily skewed to reservation projects, tourism promotion to attract more gamblers and regulatory costs already funded by the gaming tribes. These monies should accrue instead to the general fund to help erase Arizona's $1 billion budget deficit. Hull's plan offers the state limited power to regulate tribal slot machines but no authority over poker rooms, bingo halls or blackjack. Furthermore, the full disclosure, oversight and audit requirements imposed by gambling states such as Nevada and New Jersey on their casinos are missing.

Casino cash attracts crooks like kitchen scraps attract cockroaches. Relying on the tribes or the understaffed, ineffective and incompetent Native Indian Gaming Commission to police tribal gaming is like asking Enron to audit its own books.

The state of Arizona has the right and the responsibility to regulate gaming and protect the integrity of this tourism-recreational activity because casino customers are not members of the tribes but Arizonans and tourists. Proper policing of Indian gaming to prevent corruption, money laundering, casino skimming, organized crime and loan sharking must include full, unfiltered oversight by tribal and state authorities, modeled after the dual regulatory system in Nevada. There two independent state agencies have overlapping and virtually unlimited authority to police gaming, including employment background checks, review of internal operating procedures and audits of gross and net gambling profits.

Comments

No comments yet

Add Comment

This item is closed, it's not possible to add new comments to it or to vote on it