Republican lawmakers steadfastly opposed to any tax increases suggested by Democrats say they have other ideas for raising money to help plug a $2 billion state budget shortfall.
Their biggest proposal on the table: Gambling.
Republican leaders want to let nontribal casinos offer the same slot machines as tribal casinos, with the state getting a cut of the revenue. Advocates say it would bring in nearly $160 million next fiscal year and $380 million in the following two years, although the governor’s office questions those numbers.
“This to me seems like a pretty lucrative option,” said Rep. Gary Alexander, R-Olympia, the ranking Republican on the House Ways and Means Committee. “Beside generating significant amounts of money, it also hits the other major issue we’re addressing, and that is putting people back to work.”
Republicans say they want to help level the playing field for small, nontribal gambling halls that are struggling to compete with the glitzy tribal casinos.
Democrats, who’ve been saying “everything is on the table” when it comes to balancing the state budget, seem inclined to leave this idea in the freezer. Democrats control the House, Senate and governor’s office.
Gov. Chris Gregoire doesn’t see the proposal going anywhere. “If I had my way, we would not have any gambling in Washington state at all,” she said, “on or off reservation.”
The GOP grumbles that Democrats don’t want to anger the tribes, who are big political contributors.
The state Democratic Party alone received about $1 million in direct contributions from the tribes between 2004 and 2010. The state Republican Party, by comparison, received $4,500.
The tribes say they’ll fight any legislation that tries to break their monopoly on electronic gambling machines.
And Brian Cladoosby, chairman of the Swinomish Tribe, noted that voters have turned down expansion of slot-machine gambling outside of tribal casinos in the past.
In 2004, voters rejected with more than 61 percent of the vote an initiative that would have allowed as many as 18,000 new electronic slot machines in nontribal casinos, bars, restaurants and bowling alleys.
“Washington voters have spoken loud and clear that they are comfortable with this kind of gaming being limited in tribal facilities, and I would hope they would look at those past votes,” Cladoosby said.
Republicans in the House and Senate say they plan to introduce bills in both chambers as soon as this week that would allow a limited number of electronic slot machines in the 60 existing licensed cardrooms, with a maximum of 7,875 machines statewide.
Alexander said he planned to meet with representatives from several tribes today in Olympia to discuss the legislation.
Under their gambling compacts negotiated with the state, tribes are required to spend some of their revenues on smoking cessation, problem gambling, impact fees, and charitable contributions in their communities. But there is no revenue sharing.
State records show tribal casinos had an estimated $1.95 billion in net receipts in fiscal year 2011, up from $1.57 billion in 2009.
Gregoire said she convened an emergency meeting of tribal leaders last month, at the request of Republicans, “to see if tribal leadership was interested in revenue sharing or something short of revenue sharing.”
The governor said 24 tribes were represented at the meeting held in Kitsap County. “I laid out the crisis that we’re in, and the cuts that I was going to make are going to impact not just all of the nontribal folks in the state, but the tribal folks,” she said.
The tribes were not willing to budge on revenue sharing, she said.
“Then I simply said, ‘Bottom line, is there anything you can do to help us?’”
Gregoire said she’s still waiting for an answer.
W. Ron Allen, chairman of the Washington Indian Gaming Association, said tribal leaders reminded the governor that under the gambling compacts, revenue sharing can’t be entered into without renegotiating the agreements and getting U.S. Department of Interior approval.
And tribes would not agree to revenue sharing without getting exclusivity in the bargain – cutting all other nontribal gambling out of the action, without any grandfathered operations, Allen said.
Further, he said tribal leaders reminded the governor that tribes have troubles of their own. Reducing gambling revenues they need to pay for their own programs would only shift budget problems to the tribes, Allen said.
Tribal leaders did pledge they’d try to help fund services in their communities the state can’t afford, something some tribes are already doing, both Cladoosby and Allen said. Last February the Tulalip Tribes donated $1.26 million to the Marysville School District to help it weather budget cuts, benefiting not only tribal kids, but all 11,000 students in the district.
Gregoire said the reality is the state has no leverage over the tribes when it comes to revenue sharing.
“If we got revenue sharing, they’d have to get something in the deal. The court cases have been real clear about that,” she said.
There is nothing to stop the state from allowing slot machines in the nontribal casinos, except an apparent lack of votes.
Democrats say it takes a 60 percent vote in the House and Senate to approve an expansion of gambling – a threshold that isn’t likely to be achieved.
Republicans, however, contend their proposal is not an expansion – machines would go only to existing nontribal casinos – and would require only a simple majority vote.
Supporters say the popular slot machines would help keep those businesses afloat.
Chris Kealy, owner of the Iron Horse Casino in Auburn, said he used to have 300 employees and is now down to 92 full-time positions. It’s hard to compete with the Muckleshoot Casino – with more than 3,000 slot machines – only three miles down the road, he said.
Kealy said he’d install 100 slot machines if the Legislature allowed it.
“For me personally, it will save me from bankruptcy because I’m headed there otherwise,” he said.
“I’m definitely not in a good spot.”