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Transcripts

February 11, 2002

Host: Michael Grant
Topic: Gambling in Arizona and various legislative bills that may effect it.
In-Studio Guests: Senate President Randall Gnant;
Representative Steve Tully from Legislative District 24;
Dennis Patch, a tribal council member.

>>MICHAEL: Tonight on "Horizon," a look at gambling in Arizona and what proposals are on the table to change it. One legislative bill would allow horse and dog tracks to offer a form of video gaming while giving the state a piece of the action. Another bill would allow the state to get up to 2% of Indian gaming revenues while establishing criteria for the number of slot machines and casinos an Indian tribe can have. Finally, one group of tribes will go to the ballot and ask voters to increase the number of slot machines allowed in casinos. Good evening. Welcome to "Horizon." I'm Michael Grant. A bill introduced last week would let voters decide if dog and horse tracks can offer video slot machines. Senate concurrent resolution 1020 would allow tracks to operate up to 1,000 video lottery terminals. The state would take in 30% of profits. 20% would go to be used to increase purses offered to winners of dog and horse races. The bill also creates a formula for the state to receive up to 12% of Indian gaming profits based on the size of the Indian community. Joining me now is the sponsor of that resolution, Senate president Randall Gnant. Senator, good to see you again.

>>RANDALL GNANT: Good evening to you, Michael.

>>MICHAEL: Let me start with the political side of this. We were talking about this on the Friday edition. This would seem to be a resolution in search of a constituency. Let's say the moderate liberal elements of the state, I think, are very concerned about not doing anything to harm Indian gaming. The conservative elements of the state, of course, aren't real crazy about gaming at all, and certainly no expansion. So, A., do you agree with the premise, and, B., where is the constituency?

>>RANDALL GNANT: I do agree with the premise, and the constituency, if there is to be a satisfactory one s still building. The fact of the matter is whether we want to admit it or not, neither the Republican party nor the democratic party is the largest party at the legislature. The largest party is the ostrich party, that's party that has their heads in the sand and is refusing to understand that for the last now years we have been sending more money out in terms of expenses than we have been bringing in in terms of revenue and there is going to come a time. This legislature can pass the buck if it wants to, but there is going to come a time when we have to Saar veery cut back on goods and services or augment the revenues, and the revenue enhancements they're talking about in terms of tax adjustments I don't think are going to make it. Fact of the matter is states all over the union have managed to carve out a relationship between the tribes and gaming and the horse tracks in their states without turning into dens of inequity, lands every Sodom & Gomorrah and so I have offered a suggestion would that provide between and $200 million to the state for a minimal, minimal increase in the number of opportunities to work these machines.

>>MICHAEL: Part of the 100 to $200 million, though, in increased revenue depends upon the tribes, your participation with the tribes. If the tribes are no longer going to have exclusivity, why would they agree to that revenue sharing?

>>RANDALL GNANT: Well, from all of the conversations I've had with tribal leaders and I've been working this since last July, we don't agree on the conclusion, but we gray on the following statement, all of the tribes understand they are part of Arizona and they understand that their future is tied to Arizona's future and in this post September 11th where we are at war and having to finance ourself at war, I'm hopeful that ultimately they will understand this is the best interest of themselves not only as tribal members but as their other role as citizens of the State of Arizona.

>>MICHAEL: If you expand -- if you allow the expansion of gaming off reservation, I understand that there are what are referred to as poison pills in the current compacts that essentially say in some major respects, all bets are off for the tribes. They can, for example, increase the number of machines. Don't you run that risk with this proposal?

>>RANDAL GNANT: You mean with this particular problemal?

>>MICHAEL: Right.

>>RANDALL GNANT: No, because the current compacts don't have any standing. That was the case last July, that -- where the decision came down for the tracks that set the current compacts are essentially not the kind of compacts that we ought to have, that we have unduly delegated to the governor authority to enter into these compacts. But in the proposal that I have, there is a powerful, powerful poison pill would that stop, for example, every restaurant and bar from having a slot machine, simply because would it then authorize the tribes to go into full scale gaming and I don't think any legislature wants to do that.

>>MICHAEL: Essentially -- we keep talking -- I think the reference is to VLTs, video lottery terminals, but these would be slot machines --

>>RANDALL GNANT: This is the old walks like, likes like, quacks like but it's not quite a duck. It doesn't pay off in coins. Would it pay off in a voucher. And so at the track you would take this voucher, like a winning horse race ticket, to the cashier to be cashed out. The other difference is you can take a slot machine, take it from the wall, unplug it, and plug it and it operates off its own algorithms with the chip in the machine. With the video lottery terminals, they are all tied into a central computer, so it would be more like playing Powerball, for example, than it would be a regular self-contained slot machine.

>>MICHAEL: 1,000 slot machines per location is mentioned, but your bill actually doesn't have that filled in?

>>RANDALL GNANT: Actually, my bill has blanks. I don't see any one location having a thousand machines. Quite frankly, my interest in doing this is to provide a global solution to the gaming issues and all of the other proposals, including the ones that the tribes want to put on the ballot, don't do away with the lawsuit that the tracks are continuing to pursue. This is a global solution, but my interest is not to turn the tracks into the casinos business. My interest is to provide them with a small amount of revenue so that they feel that they can be competitive with what they say that they've lost to the tribes.

>>Michael: And you emphasized what they say that they have lost to the tribes. There's an awful lot of people that point out that in the past five, six, seven years, add midly because of the expansion of offtrack betting, satellite wagering, but that track profits are at an all-time high. Now, it's not as a result of the Arizona racing activity. So do they -- are they being hurt or harmed by Indian gaming?

>> RANDALL GNANT: In many of the conversations I've had with the operators of the tracks, they have sort of indicated, you know, if we could have exactly the status quo, exactly what we have here on February 11th, 2002, we can live with it, but you start putting more machines and more games in at the tribal facilities and then all those new products that we've added over the last decade is still going to leave us behind and we don't have other new products that we can at to it. So we feel that if there's going to be an expansion of gaming on the reservation, we need some ability to compete off the reservation. There are over 6,000 families in Arizona that owe their lively hood to the tracks, whether they are breeders, horse or dog breeders, whether they work at the track as trainers or work in concessions, and that's something we ought to be aware of as we're trying to create solutions.

>>MICHAEL: This would allow track operations 6:00 a.m. to midnight? Did I read that aspect?

>>RANDALL GNANT: The bill is currently set up for liquor hours, so the same hours that the bars can be open it would be set up for liquor hours. But everything in this bill is negotiable, from the number of machines to the emergency that the -- percentage that the tribes might pay, from the hours the tracks would be allow to do offer the gaming. What I want to do is to get the parties to the table and try to see if we can get, as I've said before a global solution, and that's something where something goes on the ballot, passes in November, and then adjudication that takes place either in California with the 9th circuit Court of Appeals or several years later down in the supreme court in Washington, all of a sudden obviates all of that work and we're back to square one.

>>MICHAEL: How hopeful are you that the parties show up at the table. So far this kind of collective bargaining that you envision obviously hasn't taken place.

>>RANDALL GNANT: Well, I have sort of been like Henry Kissinger going back and forth between the two parties for the last two months. The tracks have come to the table and willing to negotiate. The tribes have not so far indicated a willingness to negotiate. Where it will go, I know not. But I do believe that if we can't get this global solution, we're just postponing the inevitable down the road, and we've done that too many time in the past.

>>MICHAEL: If the tribes say, no, we won't come to the table, are you prepared to fill in these various blanks, cut the best, most acceptable deal to the tracks, and see if the legislature will buy it?

>>RANDALL GNANT: No, it won't be the most acceptable deal to the tracks. If the tribes elect not to come to the table, I'll have to negotiate with them for the -- for them with the tracks to come one something fair to all parties and hope we can get the political collective will to move it through the legislature and that collective political swill by no means guarantee as of today.

>>MICHAEL: What about the collective will to move it past the people of Arizona? What do you consider its valid chances to be?

>>RANDALL GNANT: I think the valid chances are better than people think right now that they are. Because more and more people, I think, are coming to the understanding that you can have gaming and a same population co-exist, and the revenue stream, quite frankly, is so attractive that it's going -- I think it's going to be difficult for people to want to say, I think we should, you know, cut down on some of the core goods and services that we want the government of Arizona to provide in order to not have this revenue stream.

>>MICHAEL: Ok. Senate president Randall Gnant we appreciate your time. Governor Hull and the legislature have both called for revenue sharing as part of any new gaming compact reached with Indian tribes. A KAET poll released a couple weeks ago found 67% of Arizona voters support Indian gaming while 59% think the state should get a share of gaming profits. Here's what some people had to say about the state taking a cut of the action?

>>I think they should keep all profits. I mean, we should serve that community so they can use the money to develop their own community for their own activities. I don't think we should take any profit from them.

>>Definitely 'do, I think they should get the percentage.

>>PAUL ATKINSON,REPORTER: How high?

>>Oh, somewhere around 10%.

>>I think if we're allowing it to happen, then, yeah we should be able to get a little cut, of course.

>>I think the state should be able to get a cut out and it I think they should allow Indian gaming to do whatever they need, that's a sovereign nation, and basically they should have the right to do what they want to do on their lands.

>>I think possibly the state should get a small cut of the gaming action, although certainly the Indians at this point are entitled to a significant amount of the revenue that they get from it.

>>MICHAEL: Phoenix lawmaker has introduced a bill that would allow the state to collect up to 2% of revenue from Indian gaming, house bill 2603, also sets a limit a limit on the number of gaming machines and casinos a tribe can operate based on its population. Joining me is the bill's author, Representative Steve Tully from Legislative District 24. It's good to see you. Interesting. Some of the people saying, no, it's Indian money, they ought to keep it, state shouldn't snag a share of it. What's the strongest argument you've got for it? We can talk about whether it's 2, 8 or 10 in just a second, but just taking any of the cut at all.

>>STEVE TULLY: Well, I prefer not to take any of the cut myself. I think the exchange -- the reason for asking for a cut is that the state is giving the exclusive right to the casino gaming to the tribes. How we got there is a real long and convoluted story. It wasn't a rational decision. No group sat down and said, you know, the tribes, they need some economic development, let's give them the exclusive right to run casino style gaming in Arizona to build them up.

>>MICHAEL: It was more a crush and tumble eve vents, including but not limited to mayflower moving vans at the Ft. McDowell Indian reservation.

>>STEVE TULLY: Right. And a bunch of legal decisions that sort of led us down this path we've had for the past 10 years. My bill and virtually any of the proposals would allow the tribes the exclusive right to have casino-type gaming in Arizona and for that right, the monopoly right, I think people say, well, they should pay something back in the form of a -- 2%, 8% type of tax.

>>MICHAEL: Obviously we just had Senate president Randall Gnant here. He thinks it it off to come off the reservation. Your bill would not allow any expansion of gaming. Do you think allowing gaming off the reservation is a bad idea?

>>STEVE TULLY: I do. In fact, I think gaming on the reservation isn't a great idea, either. But we're kind inform the situation now, and what I'm seeking to do with my bill is to say, well, here we are, the tribes have spent a great deal of money building out these facilities, they're now in legal limbo, there is great support for gaming on the reservations by the people of Arizona, by these polls, how -- how do we make the best of a bad situation? I mean, I can't put the GENIE back in the bottle. How do we make the best of a bad situation? My view is we say, you made those investments, we're not going to hurt those investments to the tribes. We're going to allow you to keep the casinos open to the extent you have but we're not going to let you expand.

>>MICHAEL: However, you do allocate more machines to the Navajos, ironically enough, the Navajos don't use any at all, but if I recall correctly, again we have these poison pills in the compacts and if you authorize an increase in machines, I understand that you trigger some of those poison pills in the existing compacts and would allow the tribes to do much heavier gaming. Is that an intended or unintended consequence in your bill?

>>STEVE TULLY: That's an unintended consequence if it comes up. I mean, right now, you have to understand, that gaming is illegal Arizona under judge Broomfield's decision. We will see what happens at the 9th circuit. No one is waiting for that. We're going to have propositions on the ballot -- at least -- if we keep going the same way we're going and don't have a global settlement, we will probably have 2, three n in my view we will probably have four propositions on the ballot. So the whole world of Indian gaming is going to change. But that has come up. So I'm not sure that would have a big deal of difference if big compacts are going Touche -- Michael: Renegotiated anyway.

>>STEVE TULLY: It might be for a year or so. So I don't think any tribe is going to invest money in something that might evaporate.

>>MICHAEL: Would your legislation allow in addition to slot machines and the poker and those kinds of things, would it allow table games like blackjack, roulette, other kinds of table games?

>>STEVE TULLY: No, no bank games. This is something that I've learned just by getting involved in this issue. Apparently there's bank games are where the house n this case the tribe, the casino, is the bank, and they -- and it's like blackjack and those are highly profitable for the tribes. What they have now is poker where apparently the parties -- the ante that the tribes take is for use of the facility, and then -- they're not a part to that. Apparently that's not a huge revenue source for them. So --

>>MICHAEL: But you would not -- but not allow them to move into the table games that we associated with, for example, Laughlin, Vegas and California?

>>STEVE TULLY: Yes, again, I just want to say, you built what you have, let's stay there, and the tracks have indicated -- some of the tracks, not all -- have indicated they could live with the status quo. Some of the tribes have indicated they could live with the Staat us quo. I'm willing to say, hey -- it's a right to print money for some of the tribes. Exclusive rights for casino style gaming, we'll put that into law, and in exchange for not expanding gaming.

>>MICHAEL: Your bill also would not allow transfers of machine rights from tribe to tribe. The argument is made that many tribes located in more remote areas of the state, even though they may have an allotment, can't really do much with it, on the other hand, if they could move that to a Phoenix, Tucson urban location, they could get some money off of it, and everybody would benefit. I take it you don't buy that argument?

>>STEVE TULLY: No, because that argument presumes that there was a rational decision made by someone that gaming was going to be the engine of economic development for the tribes, and that is casino-style gaming. That was never the rational decision. The decision that sort of got us there and I won't get into long a legal discussion on the show, was sort of a way for the state to control these types of -- basically bingo original Le, these high-stakes bingo games that were going on. Again, through a bunch of legal designifies came in Arizona, in Arizona and other states by default, it became an exclusive right to casino style gaming. It was never a rational decision. I don't think anybody would. Nobody in Congress would say, hey, the tribes are -- you know, economically depressed, let's make them Vegas. You come up with some other economic stimulus package.

>>MICHAEL: Isn't there middle ground someplace where you say, ok, Navajo tribe, you can move 750, we're not talking 10,000, 750 of those machines to Pima, illustratively, or the McDowells or whatever and by that you at least allocate the money a little more equitably, regardless of how you got there?

>>STEVE TULLY: Well, if we're looking to economically allocate the money, then we ought to require the tribes who are in urban areas give a cut, just a subsidy, to the Navajo.

>>MICHAEL: To share the bucks?

>>STEVE TULLY: To share the bucks, because they have, like I said, a license to print money. But I think it's a separate issue that if we block economic development on the Navajos or some of the tribes that are remote --

>>MICHAEL: Representative Steve Tully, we appreciate very much the information. Take care.

>>>Colorado Indian river Indian tribes have launched an initiative to increase the number of slot machines at Indian casinos. The "Yes for Arizona" initiative calls for an increase from 14,600 slot machines to 21,000 statewide. It also would allow tribes to transfer slot machines from one Indian casino to another. The initiative earmarks 3% of statewide tribal gaming revenue fund college scholarships and pay for elderly care. Joining me now to talk about the "Yes for Arizona" initiative is Daniel Eddie, Jr., tribal chairman of the Colorado River Indian tribes. Welcome to the program.

>>DENNIS PATCH: Thank you. I am Dennis Patch. I'm a tribal council member.

>>MICHAEL: Oh, I'm sorry. Dennis Patch. We had a last-minute substitution. Mr. Patch, we appreciate you joining us. Why the increase? Why the 6,000 or so increase in total slot machines in the State of Arizona?

>>DENNIS PATCH: It's actually 6,000. It -- because the initiative is for 20 years, the compact would be for 20 years, it would allow the tribes to grow in those 20 years and the increases we felt were moderate increases over a 20-year period.

>>MICHAEL: One of the other major changes that your initiative would make, as I understand it, is right now there is a cap on how many machines you can have in one location. Yours would lift that, in other words f a tribe had, oh, 1500 machines allocated, you could put all 1500 in one location. Why is that a good idea?

>>DENNIS PATCH: Well, our initiative allows for a thousand machines. It allows for up to three casinos. And if a tribe can put a thousand machines in a casino, it allows that.

>>MICHAEL: I guess the concern is, though, you concentrate a lot more gaming in a much smaller area, whereas under the current scheme, you at least move that out over two or three different locations.

>>DENNIS PATCH: Well, the casinos currently are built -- we think are going to accommodate those machines, so we don't see it as a problem because they're already currently in the casinos.

>>MICHAEL: Why not work with the other tribes on a new contract? The Colorado tribe is sort of on its own in this thing. You're regarded as a maverick, I understand, by the other tribes. Why have you moved off on your own on this subject?

>>DENNIS PATCH: Just to get the negotiations going and to also allow for the voters to decide. We've been negotiating -- we were part of IGA for a number of years and they have been negotiating for the last three years, and we decided that with the other initiatives that might be put on the ballot that we couldn't afford to wait and we think that our initiative is inclusive of all tribes, and so we went forward with it.

>>Michael: Does this indicate that you don't have much confidence in the negotiation process that is currently under way? Because from all signs, it seems that the tribes and the governor's office have been making some substantial progress, progress that at least I think several other Indian tribes are satisfied with.

>>DENNIS PATCH: Well, we don't know exactly what the governor and the other tribes are talking about, we weren't privy to those negotiations, and with the number of ballots that are currently -- looks like might be put on the ballot, we figured we couldn't wait any longer.

>>MICHAEL: Tell me about the 3% revenue sharing aspect of the initiative. It would be earmarked for college scholarships and elderly care. Would this be college scholarships and elderly care generally throughout the store?

>>DENNIS PATCH: Yes, it would be 3% of net gaming and it would be allocated to college scholarships in the public universities and community colleges and tribal colleges, and to all Arizonans in the elder care melt care.

>>MICHAEL: Why dictate a particular use or function for the money? I'm not necessarily arguing that college scholarships aren't good, but why not just simply say 3% goes to the state general fund and the state figures out how to spend the money?

>>DENNIS PATCH: Well, we looked at the details of the state and -- needs of the state and one that stood out is education and healthcare for the elderly, and we wanted it to go back to Arizona for their support of Indian gaming, and we looked at all the different causes or needs out there, and we settled on those two.

>>MICHAEL: We talked to the Senate president Randall Gnant earlier in the program about his proposal to allow the horse and dog tracks to take part in basically slot machine gaming. Does the Colorado tribe have a position on allowing that to occur?

>>DENNIS PATCH: We don't really have a position. We just know that the polls that have been conducted in the past and currently show that most Arizonans don't want to that happen.

>>MICHAEL: But you don't have a position necessarily on don't allow it to move off the reservation?

>>DENNIS PATCH: No.

>>MICHAEL: Dennis patch, council member, Colorado River Indian tribe, sorry for the confusion at the start. Again we appreciate you joining us discussing the initiative.

>>DENNIS PATCH: Thank you.

>>MICHAEL: Tomorrow on "Horizon," we will be talking about a bill that would eliminate non-compete clauses for people who work in radio and television. It has passed the Senate and we will take a closer look at its provisions. Plus we'll have an update on the never-ending stadium site selection process. Wednesday a new drug prevention program will be unveiled in our state. We will have details on Wednesday's "Horizon." Thank you very much for joining us on this Monday edition of "Horizon." I hope you have a great one. I'm Michael Grant. Good night.