How four tiny Indian tribes, with help from powerful gambling interests, are trying to transform the Bay Area into a slot machine Mecca

Enter George Miller.

If the notion of deeming a card club on a tiny chunk of urban asphalt next to a freeway to be an Indian reservation seems preposterous, the congressman didn't see it that way. Miller, who has long championed Native American causes, saw it as a chance to give San Pablo a badly needed economic boost. As Congress rushed to finish its session in 2000, Miller inserted three sentences into a massive spending bill, and those 135 words would be immensely helpful to Katz and the tribe. Miller's was a seemingly benign amendment, offered as a "technical correction" to the 150-page Omnibus Indian Advancement Act, that declared the land retroactively to be part of the tribe's "reservation" before the 1988 cutoff date.

Yet even Miller's act of political generosity may not have amounted to much were it not for Katz -- or, more specifically, if the wealthy sports stadium financier had not brought the right people into his enterprise. Among them were Scott Reed, Bob Dole's former campaign manager, who now heads Chesapeake Enterprises, a prominent Washington lobbying firm; and Roger Stone, the Republican operative reputedly responsible for staging the so-called "Brooks Brothers Riot" in Miami in support of George W. Bush during the 2000 Florida vote-count fiasco. (Katz later brought in Darius Anderson, Gray Davis' former fund-raiser, who heads Platinum Advisors, a lobbying firm with a presence in Sacramento and San Francisco.) After Nevada Sen. Harry Reid -- ever protective of gambling competition to his state -- got wind of what Miller had managed to do, sources say it was Stone, along with former Louisiana Rep. Bob Livingston, another Katz subhireling, who persuaded key senators to prevent the Miller amendment from being killed in the Senate.

Don Arnold, chairman of the Scott's Valley Band of 
Pomo. His tribe's casino ambitions are underwritten by 
Florida investor Alan Ginsburg.
Paolo Vescia
Don Arnold, chairman of the Scott's Valley Band of Pomo. His tribe's casino ambitions are underwritten by Florida investor Alan Ginsburg.
A sign beckons gamblers to the San Pablo card club, 
where the Lyttons want to open a casino.
Paolo Vescia
A sign beckons gamblers to the San Pablo card club, where the Lyttons want to open a casino.

After incubating for nearly four years, Miller's maneuver finally hatched in August, when Gov. Schwarzenegger unveiled the compact to give the Lyttons a casino with a whopping 5,000 slot machines. The timing of his announcement could scarcely have been more awkward. In advance of the Proposition 68 and 70 gaming initiatives on the November ballot, anti-gaming TV ads have helped to remind voters -- at a time when many lawmakers face re-election -- just how beholden politicians of both parties have become to the Indian gaming lobby.

Angry at the governor for springing the compact at the end of a legislative session without consulting them, Bay Area Democrats quickly seized on the traffic congestion that the casino could create. The Lyttons just as quickly offered to cut the number of slots in half. Despite having already signed off on Schwarzenegger's compacts with other tribes, the Legislature balked, deferring action on the Lytton pact until the lawmakers went home.

"I don't think [the state] can somehow get out of its budget crisis through compacts with gaming tribes, and particularly this one, which opens the door wide for urban gaming," says Assemblywoman Loni Hancock (D-Berkeley), who has helped lead the charge against the Lytton deal. Last month U.S. Sen. Dianne Feinstein got into the act, introducing a bill that would essentially undo what Miller's amendment did. (Notably silent in the gaming hubbub is her Senate colleague, Barbara Boxer, who helped procure federal recognition for the Federated Indians of Graton Rancheria in 2000, when the tribe was vowing not to pursue casino gambling. Now it wants to build a huge casino in Rohnert Park, near Santa Rosa, and has hired Doug Boxer, the senator's son, as a consultant.) Considered dead in the water, the Feinstein measure nonetheless has served to ding Schwarzenegger for negotiating what casino opponents see as too grandiose a pact with the Lyttons.

In a letter to Feinstein expressing his opposition, Schwarzenegger pointedly reminded the senator that had it not been for her fellow Democrat Miller, he wouldn't have had to negotiate the Lytton compact in the first place. Having depicted gaming tribes as the epitome of grubby special interests during his campaign, Schwarzenegger pointed out that under state law he had no choice but to negotiate gaming compacts with tribes that are legally entitled to them.

Critics of the Lytton deal say that doing so doesn't mean giving the tribe what would still be -- even with only 2,500 machines -- the largest Indian slot palace west of the Mississippi River. Chief among the complainers is Miller, who remains unapologetic for his role in setting the ball rolling. "Does [the congressman] stand by what he did? Sure," says Miller spokesman Dan Weiss. "But it's the governor who's chosen to turn the casino into a bigger operation than we thought it would be."

Regardless of the squabble over how many slot machines the tribe may be granted, even anti-gambling advocates acknowledge that there is little to prevent the Lyttons from getting their coveted casino. "The deal is done," says Cheryl Schmit, co-director of Stand Up for California, a gaming watchdog group. "The Legislature's role is to ratify the governor's compact, negotiated in good faith, and if after six months it doesn't, under the law the tribe could turn to the courts for relief."

Meanwhile, the debate over how many slots the Lyttons get obscures a little-known reality that almost no one is eager to talk about. Schwarzenegger's compact with the tribe specifically prevents it from installing video lottery terminals, which at least two other tribes have already deployed as a way of getting around limits on the number of slot machines. But should the Lyttons not get all the slots they want, experts say, there would be nothing to prevent them from installing other new-generation devices, including one called Reel Time, marketed by Multimedia Games Inc. of Austin. While technically a bingo game, Reel Time is barely distinguishable from a slot machine.

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