Fate of Prop 5 could rest on obscure lottery measure language

When voters approved the last expansion of legalized gambling in the state 15 years ago, they also wrote into the state Constitution a little-publicized provision saying the Legislature "has no power to authorize, and shall prohibit, casinos of the type currently operating in Nevada and New Jersey."

The state's high court never had to consider the meaning of those words until 63 percent of the voters approved Proposition 5 last November after a $100 million campaign, the most expensive ballot measure fight in U.S. history.

Backed by most California Indian tribes, the initiative would allow previously banned video machines - some of which fit the state law's definition of slot machines - as well as blackjack, several other card games, and off-track betting on reservation casinos.

The measure is crucial to the economic future of dozens of tribes and is opposed just as strongly by Nevada casinos, which bankrolled the opposition campaign and one of the two lawsuits before the court.

The court blocked implementation of Proposition 5 last December when it agreed to review suits by a group of homeowners, who live near casinos slated for expansion, and by the Hotel Employees and Restaurant Employees International Union, which disliked the measure's provisions for casino workers.

Tribal leaders put the measure on the ballot after Gov. Pete Wilson refused to negotiate increases in video gambling and card games allowed on reservations. Gov. Gray Davis, by contrast, supported Proposition 5 and has begun negotiations that could lead to state approval of those games, independently of the ballot measure.

But the results of the negotiations could be nullified if the court rules that the expansion contemplated by Proposition 5 violates the state Constitution or federal law. A ruling is due within 90 days of Tuesday's hearing.

The two sides in the case disagree, not surprisingly, on the meaning of the 1984 prohibition of "casinos of the type currently operating in Nevada and New Jersey."

A large room filled with slot machines and blackjack tables fits most people's definition of a Nevada-style casino, argued Richard McCracken, lawyer for the hotel and restaurant union, in court papers opposing Proposition 5.

Mark H, Epstein, a lawyer for tribes that sponsored the initiative, countered that there are many important differences between tribal casinos and those in the two states:

-Slot machines in Nevada and New Jersey have handles and dispense cash, while machines allowed by Proposition 5 use buttons and dispense credit slips.

-Casinos in the two states are privately owned and located in populous areas, while reservation casinos are tribally owned and relatively isolated.

-Nevada and New Jersey casinos commonly provide free alcoholic beverages to patrons, a practice forbidden in tribal casinos.

-Some games, such as roulette, craps and wheel of fortune, are allowed in Nevada and New Jersey but not under Proposition 5.

-Gamblers in the two states compete against the casino, which makes its money from losing bets. All winnings in tribal casinos come from other gamblers, while the tribe collects a fee per game or a percentage of the amount bet but has no stake in the outcome.

Epstein also argued that the lottery initiative restricted only the Legislature's authority to allow casino gambling and did not apply to future ballot measures.

Another issue involves a federal law, the Indian Gaming Regulatory Act, which requires states to allow the same types of gambling activities on reservations that are permitted elsewhere in the state.

Opponents of Proposition 5 contend it violates IGRA by allowing reservation gambling, such as slot machines and blackjack, that is prohibited by state criminal laws outside the reservation. Supporters contend IGRA leaves states free to permit gambling on reservations that is not allowed elsewhere.

Another provision under attack is Proposition 5's requirement that the governor approve a tribe's gambling compact within 30 days. After that, the agreement would have automatic state approval and would take effect in another 45 days unless the U.S. interior secretary objected.

That would make the governor's constitutionally guaranteed "supreme executive authority" meaningless, McCracken wrote. "He is held under house arrest and forced to sign it."

But Epstein said the power to negotiate agreements for the state is assigned by law to the Legislature, and held equally by voters who pass an initiative.

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