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Myths and Facts about Proposition 70:

MYTH: Prop 70 requires tribes to pay taxes. Sponsors claim that Prop 70 guarantees that Indian casinos pay the same rate as all Californians: "Prop 70 requires tribes to contribute funds to the state for 99-years at exactly the same rate as other California businesses." (Yes on 70, Press Release, 8/24/04)

FACT: Prop 70 does not allow for the state to audit the books of the Indian casinos. This means we will never know if they are paying their fair share or not. They could end up paying next to nothing. Further, if the corporate tax provisions in Proposition 70 are found to be preempted by federal law and severed from the initiative, the tribes would enjoy a 99-year monopoly over casino gaming activities and would not be required to make any payments to the state. It's a sweetheart deal for the tribes bankrolling the measure, but a raw deal for the rest of us.

MYTH: Prop 70 treats casinos like other businesses. Sponsors claim they want to be treated like any other business in California: "Our initiative is very simple and straightforward... we want to be able to run our tribal businesses like any other businesses." (California Secretary of State, Official Voter Information Guide, "Argument in favor of Prop 70," November 2, 2004, p. 66.)

FACT: The operation of a tribal casino on trust lands is not remotely the same as operation of a non-tribal business. Tribal casinos pay no property, sales or income taxes. Tribal casinos are not required to obtain business licenses or pay license fees. Tribal casinos are not required to pay the state minimum wage. Most importantly, tribal casinos are not subject to suit in state or federal court by the state or members of the public if the tribe fails to abide by its promises. The operation of tribal casinos is governed by the exclusive rules established by each tribe and the terms of a tribal-state compact. To say that tribal casinos operate like any other business is false and misleading and conveys to most voters, mostly uninformed of the special status of tribal casinos, the impression that tribal casinos are like any other business found in the Yellow Pages or are heavily regulated to protect the public like casino operations in other states.

MYTH: Proposition 70 constitutionally requires compliance with strict environmental reviews. (Source: Yes on 70, Talking Points, 8/24/04)

FACT: California environmental laws do not apply on reservations. Absent express provisions in a tribal-state compact, the only environmental laws that apply on reservations are federal or tribal. The United States Environmental Protection Agency enforces most federal pollution laws or that task is delegated to a state with stricter environmental laws, such as California. However, the U.S. EPA will allow a tribe to self-administer environmental programs, such as air and water quality, in the same way that a state administers these federal laws.

One of California's most important environmental laws is the California Environmental Quality Act (CEQA). CEQA requires disclosure of significant environmental impacts and mitigation of those impacts under some circumstances. CEQA does not apply to development on tribal lands. A related law, the National Environmental Policy Act (NEPA) applies to federal actions, including those on reservations. However, NEPA only applies when a federal permit is required, and a tribe does not always have to obtain a federal permit before building a casino. Moreover, NEPA does not require mitigation of identified projects.

Land use laws are an important part of environmental laws. In California, local governments control land use, but local land use regulations do not apply to the tribes. The tribes have authority to develop their own land use laws for reservations.

While tribes under Prop 70 would be required to prepare an "environmental study," whose scope and standards are not defined, analyzing the impact on the surrounding area of any new or expanded tribal gambling facility, they are not required to negotiate with local government to mitigate environmental, public safety or other effects attributable to the project.

MYTH: Prop 70 maintains mandatory audits from both the state and independent accounting firms. (Source: Yes on 70, Talking Points, 8/24/04)

FACT: Prop 70 "doesn't really address the issue of what type of audit might be necessary to make a full determination of what is taxable income…the state has no direct authority, apparently, to demand an audit to determine whether or not they - the tax provisions of Prop 70 - would be met." (Source: Transcript of Judicial Proceedings, Sacramento County Superior Court Judge Raymond M. Cadei, Case No. 04CS00980, p. 14.)

Prop 70 does provide that its provisions are a mandatory amendment to the existing tribal-state compacts which a number of tribes signed in 1999. A review of that compact demonstrates that the only audit of the tribes' operation is conducted by the tribal agency, not the state. The audit is no more a state audit than a self-audit by General Motors or any other corporation would be. Further, for tribes that have no current compact, Prop 70 does not require that they agree to any terms other than those in Prop 70. Because Prop 70 has no audit requirement at all, it is false and misleading to suggest that Prop 70 maintains mandatory audits.

MYTH: The defeat of Proposition 70 means casino will close, depriving tribes of the ability to support themselves and their members.

FACT: Casino gambling by Indian tribes is a right guaranteed by federal law and no tribe needs Proposition 70 to conduct legal gambling on their land. Therefore, no tribe that conducts legal gambling in California will be forced to close its casino if voters reject Prop 70. Tribes will continue to operate casinos and even build new ones -- as long as they follow the compact process established in federal law. To date, more than 60 California tribes have negotiated compacts with the state that protect their rights to operate casinos.

MYTH: If passed, Prop 70 will not result in an expansion of gaming.

FACT: Wrong. Prop 70 requires the California Governor to approve every single request for casino gambling that crosses his desk - within 30 days. The approval of this initiative would encourage casino gambling operations in virtually every county in California and there would be no limit on the location or size of these casinos or the number of gaming machines and tables they could operate.


Open as a PDFMessage from Governor Arnold SchwarzeneggerYou Can Help

No on Propositions 68 and 70 - Governor Schwarzenegger's Committee for Fair Share Gaming Agreements with major funding from Governor Schwarzenegger's California Recovery Team. FPPC ID# 1266181