06/16/2004 12:00AM

Slot machine efforts dealt blow

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California Gov. Arnold Schwarzenegger said on Tuesday that the state is close to signing revenue-sharing agreements with five Indian tribes that operate casinos in the state, dealing a blow to efforts by racetracks to add slot machines to their gambling menus.

According to published reports, the deals would either require tribes to contribute 15 percent of their profits to the state or pay annual license fees per slot machine. The deals, which would expire in 2030, were expected to raise at least $1 billion up front.

Earlier this year, racetracks succeeded in getting an initiative on the November ballot that would require tribes to pay 25 percent of their profits to the state. If one tribe did not agree to the payments, then racetracks would win the right to install 30,000 slot machines, with 30 percent of the profits from the machines going to the state.

In comments during a press conference Tuesday in Sacramento, Schwarzenegger said the revenue-sharing deals would make the initiative and another ballot question dealing with expanded gambling "meaningless."

"We will make sure to get rid of them because what we want is to protect Indian gaming," Schwarzenegger said. "We want to have the Indian gaming tribes pay their fair share to the state, and it looks like we are on that road."

Schwarzenegger campaigned on a promise that he would make tribes contribute a "fair share" of their profits to the state, which he described as 25 percent. He has said previously that he opposes expanding gambling beyond Indian reservations.

Supporters of the racetrack referendum said that the deals fall short of Schwarzenegger's campaign promise.

"These deals are a lot less than the fair share the governor talked about in the past," said Greg Larsen, a spokesman for the racetrack initiative, in the Sacramento Bee. "Our research and the fact we got more than one million signatures to put this on the ballot makes us confident that voters will see that."