California, the nation’s most populous state, is on the verge of becoming the leading gambling jurisdiction in the Western Hemisphere. The state has several of the largest horse racing tracks. It also has one of the largest lotteries, hundreds of poker clubs, and several dozen Native American casinos.
Shortly before California became a state in 1850, gold was discovered at Sutter’s Mill on the American River. The news spread quickly, and soon a “rush” of forty-niners was on the way west. Between the time gold was discovered and 1860, over 350,000 immigrants had come to the Golden State. They were miners and prospectors who had free spending habits when they made their personal discoveries—or whenever they got money in their hands. Gambling was pervasive, as San Francisco became a center for a wide variety of “sin” activities. Gambling was also widespread in smaller cities and in the many mining camps of the state. Soon both the state and the local communities were charging fees for operating gambling halls.
The sinful nature of California did not last. Mining opportunities lessened as gold veins were depleted. But California offered many other opportunities—good agricultural lands and ports for commercial activity. Waves of nonmining people—“good” people—came to the state looking for normal business activities and also for opportunities to raise families and cultivate futures for their children. The dominant interests of the state—the mine owners and railroad interests—did not see that their roles in society were incompatible with those of the newer immigrants. The power elite responded to cries of public outrage and demands to clean up the sinful activities prevalent in the state. Actually, the first state constitution had contained a ban on lotteries, but casino gambling had been accepted by local authorities, until the citizens acted. Gamblers in San Francisco were lynched in 1856, and the legislature took notice. In 1860, all banking games were banned, but poker games could continue to be played.
The rule against banking games remained until 2000, when the final effort to win legal status for Native American casinos was successful, and the constitution was changed. The slot machine was invented in California in the 1890s, and machines operated in the open until state laws specifically made them illegal in 1911.
Wagering on horse races was legalized in 1933; however, the major distinguished form of gambling in California from the 1860s through the 1980s was the poker club. Many debates in court and in the legislature revolved around definitions of different kinds of games that were legal or not and whether certain poker clubs could be considered public nuisances. Courts ruled that the clubs could exist only under the authority of local ordinances. The 230 poker and card clubs of California produce revenues approaching $1 billion a year. The private clubs are not allowed to participate as players in the game, nor are they allowed to take a percentage of the money bet by the players. The card club furnishes a dealer and then charges players a participation fee per hand or a fee based upon how long the player sits at the table—the fee is collected each half-hour. There are over 2,000 tables in the clubs of the state. The largest clubs are in southern California. These include the Commerce Club (in Commerce) with 233 tables and the Bicycle Club (in Bell Gardens) with 180 tables. The clubs were, for the most part, unregulated until 1999, when the legislature activated a state gambling control commission. The commission makes decisions on new licenses and rules for the games that may be played and also makes recommendations regarding taxes.
California also permits charity gambling. There are many bingo halls in the state. The charity gambling and the poker clubs opened the door for Native American casino gambling in the state in the 1980s, precipitating an ongoing controversy that by the year 2000 had been mostly resolved.
There have been continuing efforts to legalize casinos in California since the mid-twentieth century. In 1950, the voters decisively defeated a plan for creating a state agency that could have authorized all forms of gambling, including casinos. In 1975, a legislative bill for casino gambling in Placer and El Dorado Counties, near Lake Tahoe, died in committee. A 1977 plan called for three casinos along highways leading into the state of Nevada. A 1979 proposal to have casinos in Jackson failed, as did a 1982 plan to put casinos in the towns of Adelanto in San Bernadino County and Clear Lake in Lake County. The sponsor of the plan was arrested for holding illegal games to get funds to run his campaign.
The opposition to casinos became an element of the campaign for a state lottery in 1984. Sensing that the public was adverse to the notion of having casinos and that they might fear that a successful lottery vote could strengthen efforts to get casinos, the lottery sponsors put a provision into their constitutional initiative that stated casinos would be banned in California. The measure passed, and this meant the constitution would have to be amended if there were to be any casino gambling—similar to that in Nevada.
The ban did not stop the Native American quest for casinos, but it certainly “muddied the waters.” Several tribes set up bingo and poker games, but they did not follow the local rules governing them. This precipitated a series of cases leading to the U.S. Supreme Court’s ruling in Cabazon v. California, which said that the Native Americans could run games according to their own rules as long as the games did not violate the general public policy of the state. Hence, since poker and bingo were allowed, they did not violate the general public policy of the state. The case, in turn, caused the U.S. Congress to pass the Indian Gaming Regulatory Act of 1988.
The Native Americans of California are located on over 100 small reservations, called rancherias. The Native Americans wanted casino games, but the governor would not make an agreement with them to allow the games. Nonetheless, the Native Americans installed a variety of slot machines, and they also played nonbanking versions of Nevada casino games. Legal squabbles seemed endless, until the tribes sponsored a legislative initiative to mandate that the state give them an agreement to have some casino games. The 1998 campaign on Proposition 5 turned out to be the most expensive initiative campaign in U.S. history, as the Native American interests invested almost $70 million in their effort. Nevada casinos that opposed the Native American casinos invested $26 million in the campaign.
The proposition passed overwhelmingly. A court challenge struck it down, however, on the basis that the 1984 amendment to the constitution said casinos were banned. The Native Americans returned to the campaign. In March 2000, they won passage of Proposition 1A, which amended the constitution to allow Native American casino gambling in California. It is predicted that as many as sixty tribes will open casinos and that their collective revenues will approach those of the casinos in Nevada after they are in full operation. Controversies will persist, however, as there are “vague” limits on the amount of gambling devices that each tribe may have. In any case, California is poised to become the leading gambling state in overall volume of gambling.
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