Props. 68 & 70: Casino Non-choice

Discussion
1

CALIFORNIA'S CASINO PROPOSITIONS

Henry Ford reportedly once quipped that his
customers could have their automobile in whatever
color they liked -- so long as it was black.
California voters face a similar non-choice
"choice" on election day, thanks to two statewide
ballot initiatives pertaining to American Indian
casinos. No matter which one passes, government
will get more and casino customers will get less
than they would like.

On the one hand, voters can vote for Prop. 68,
which would require Native American casinos to
pay 25 percent of their net earnings from slot
machines or face competition from new slot
machines at 16 currently operating non-Indian
card rooms and racetracks. On the other hand,
they can vote for Prop. 70, which would require
the casinos to start paying California's
corporate taxes in exchange for an increase in
the number of casino slot machines and 99-year
monopoly privileges. Different in details, but
similar in two essentials.

If either proposition wins, the state government
wins and casino customers will still have to
suffer from the monopoly restrictions that limit
the number of gambling opportunities in the
state, according to economist Benjamin Powell,
director of the Independent Institute's Center on
Entrepreneurial Innovation.

"Both of the propositions are ploys by
special-interest groups for government handouts,"
writes Powell in a new op-ed. "Prop. 68 will
benefit card rooms and racetracks, while Indian
tribes...have funded the campaign for Prop. 70.
Both bills involve the state government getting a
cut too. Who is being left out? The California
gaming consumer.

"The gambling business should not be treated any
differently than other businesses in California,"
Powell continues. "Consumers and businesses
should be free to engage in mutually beneficial
transactions whenever they want. That would mean
ending grants of monopoly privilege, and allowing
card rooms, racetracks, and any other
entrepreneurs to offer gaming options to
consumers. Who would lose from a proposition for
free enterprise in gaming? The special interests
that are protected from competition by the state
of California and the politicians who get to hand
out the favors. That sounds like a good bet for
California consumers and our economy."

See "Two Gaming Propositions Are Losing Bets," by
Benjamin Powell (10/5/04)
http://www.independent.org/newsroom/article.asp?ID=1377

Spanish translation:
http://www.independent.org/newsroom/article.asp?id=1377&esp=1

2

Hi,

For your consideration...

The LPC ExComm apparently thought 70 was worse than 68. Here are its positions:
  Prop 68 - Non-Tribal Commercial Gambling Expansion.
  Tribal Gaming Compact Amendments. Tax Exemptions.
  NO POSITION. Reduces some restrictions on gambling but also creates new
  monopolies for race tracks and card clubs.

  Prop 70 -- Tribal Gaming Compacts. Exclusive Gaming Rights.
  Contributions to State
  NO. Reduces some restrictions on gambling but also extends monopolies for Indian
  tribes.
And here is what Constance Ericson said in Libertarian Lifeline:
  Proposition 68 and Proposition 70: These two propositions
  are the competing Indian gaming measures. Essentially,
  if Proposition 68 passes, California's 64 gaming
  tribes (those with tribal compacts) would have 90 days to
  agree to a 25% tax. If even one dissented, the tribal gaming
  monopoly would end, and casino-style gambling would
  be open to card clubs and racetracks. If Proposition 70
  passes, it would allow Indian casinos to add roulette and
  craps to what could be played, tax the tribes at the corporate
  rate and require the governor to negotiate new compacts.
  I don't' like Proposition 68 - it stinks worse than most
  propositions in recent history of backroom deals and I
  really don't understand what the impact would be from
  passing Proposition 70. So from a lowly voter's point of
  view, I will Vote No on 68 and Vote No on 70.

Richard Rider had some strong feelings on prop. 70, which I believe influenced the ExComm to take its "no" position:
  While Bruce D. [Dovner] cites important issues we should be reaching out on, he is wrong to think that the Indian casino monopoly will have little effect on Californians, or specifically on Libertarians.

  The 30,000 Casino Indians WILL OWN the state. Or at least the politicians -- which, in a sense, comes to the same thing.

  In fact, they already do own the state and (where casinos are located) local politicians, and that power is growing. As I understand it, they have already surpassed the trial lawyers and the public employee labor unions as the number one political contributor in the state.

  If they were neutral on freedom, that would not matter, but they are very statist. For people who theoretically want to be left alone on their "sovereign nations," you will find that the Indians are very interested in taking away property rights of others off the reservations. They will be imposing their rather collectivist viewpoint on us all through their bought-and-paid-for legislature, and will support the most statist legislators who themselves have their own agenda of socialism.

Rich