I'm actually a bit happy to read that the Pomo Indians have scrapped plans to build a slot-machine casino in San Pablo. San Pablo isn't too close too me, but its closer than I want. I guess in some ways I'm a not-in-my-back-yard casino supporter. I can go into more about that later.
But, as I read through the various press releases and news articles on Indian gaming, online gaming, state laws, and federal laws, some things are very clear:
1. States don't really want casinos
2. Casino operators want more casinos
3. State legislators want more tax dollars
4. Casinos are a safer political bet than raising taxes
5. Lawmakers are not fiscally motivated or intelligent enough to make good deals for our state.
Items 1-4 are obvious. But #5 is what every tax payer needs to know. When it comes to doing big-business deals with casino operators, our politicians and legislators are just not equipped for the job.
The San Pablo example is one of many. The state looked to get a small piece of the pie from the casino. The casino evaluated the deal on its financial merit and concluded it was not a deal. The financial analysis was completely done by the casino, not by the Schwartzenegger or the lawmakers. Lawmakers just figure out how much they *want* from the deal, and say take it or leave it. But that is pretty simplistic negotiating, and not financially prudent. Part of this may be that legislators are somewhat ambivalent about gaming overall, and part of it is certainly that the casino operators don't want to deal with the uncertainty of the government in their shorts.
But, if California wanted to be smart, it would need to do a few things. First, outlaw all gaming. This way, the casino operators can't retreat to "safe" types of gaming. Second, we'd then have to make specific carve outs with extremely high taxes. Now, because the casino operators would have no alternatives other than to leave the state entirely, the state would finally be in a negotiating position. Unfortunately, lawmakers don't understand how to negotiate with businesses, and as such, can never put effective pressure on a competitor to acheive the desired outcome.
Again, for me, I'm probably happy anyway. For now I'm just glad there aren't slot machines jingling in my back yard.
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