06/03/2004 11:00PM

Two gambling measures will be on Calif. ballot


INGLEWOOD, Calif. - An initiative that could lead to the installation of slot machines at five California racetracks will appear on the November ballot, but it will not be the only gaming-related measure before voters.

The racetrack-backed initiative, called the Gaming Revenue Act of 2004, has received approval from the secretary of state's office to be included on the ballot. The initiative would require American Indian tribes that operate slot machines to increase their payments to the state from slot winnings from the current nominal levels to 25 percent. The tribes would have to agree to several other conditions, including increased oversight from a gaming control board, compliance with environmental laws, and an annual audit. Last fall, Gov. Arnold Schwarzenegger was elected on a platform that included forcing the tribes to pay more revenue to the state, which he described as "their fair share."

If the initiative is approved, all tribes involved in gaming would have 90 days to agree to the terms. Failure to comply would allow five racetracks - Bay Meadows, Golden Gate Fields, Hollywood Park, Los Alamitos, and Santa Anita - and 11 card clubs to install up to 30,000 slot machines.

Voters in November will also be presented with an initiative sponsored by the Agua Caliente band of American Indians. It would grant tribes unlimited slots and gaming if they agree to pay the state's corporate income tax of 8.8 percent on earnings.

"The Agua Caliente initiative is so bad when compared to us that it probably helps us," said Barry Fadem, legal counsel for the racetrack initiative. "Their definition for fair share is we'll pay state corporate tax, but that won't be an audited figure."

If both measures pass, the one with the highest number of yes votes would become law.

Thursday, the state Supreme Court rejected a lawsuit filed by the Agua Caliente tribe challenging that the language of the racetrack-backed initiative violated the state constitution by addressing more than one subject and allowing a specific business to directly benefit from an initiative it sponsors.

According to Fadem and Hollywood Park president Rick Baedeker, some tribes are negotiating with Schwarzenegger to pay more revenue from casinos to the state.

Baedeker said the proposed terms of the negotiations are less than what could be generated from the racetrack-backed initiative.

"Our initiative creates $2 billion annually," he said. "They're talking about 10 years' worth of revenue to create a $1 billion payment. The two solutions are dramatically different."