Goldy

I thought I’d done my job yesterday straightening out the confusion over the Spokane gaming compact, and who did or did not “hit the jackpot,” but then somebody forwarded me Ted Van Dyk’s confused and hyperbolic post on Crosscut, and I realized our state’s solemn guardians of the public interest required a little more hand holding.

Van Dyk was “shocked” by the initial newspaper reports, which I suppose shouldn’t come as such a surprise considering how misinformed he is; it isn’t hard to be “shocked” by things one knows nothing about. My instinct is to snarkily fisk Van Dyk’s post, ripping it to shreds line by line, but while that might be joyfully cathartic, I’ve decided a more informative approach would be to simply reprint the heart of my lengthy post from February of 2007, in which I sought to understand and explain the Spokane compact at a level of detail no other commentator has yet attempted. Sure, I could just provide a link, as I did yesterday, but our press corps has proven so lazy on this subject already, I just can’t trust them to bother to take the effort to click through.

To understand the compact and its potential impact one must first understand the basic legal principles governing tribal gaming. Federal law states that tribes may engage in the same gambling activities already legal in the state, and that if requested by a recognized tribe, the state must negotiate a governing compact in good faith. Furthermore, unless otherwise waived, each individual tribe retains favored nation status, meaning they have the right to reopen compacts and negotiate the same terms and conditions granted any other tribe in the state.

The existing tribal compacts grant each tribe an allocation of 675 slot machines each, and with one exception (we’ll get to that later) a maximum of two casinos. As has been widely reported the proposed Spokane compact authorizes the tribe to operate up to 4,700 slot machines at as many as five locations. This would appear to set the stage for a massive expansion of tribal gaming as the other tribes reopened their compacts to demand the same deal: more casinos, more slots, more gambling.

Well… not exactly.

While each tribe is allocated the right to own 675 slot machines, some are authorized to operate as many as 2000 at a single facility using machines leased from smaller tribes that do not operate casinos of their own. In fact the number of casinos and machines authorized in the Spokane compact is actually quite similar to the terms of the compact granted the Colville tribe, which is authorized to operate 4,800 machines at as many as six locations.

So why can’t the other tribes use their favored nation status to demand a similar number of casinos and authorized slot machines? Because they can’t meet the same conditions.

Both the Spokanes and the Colvilles have sprawling reservations, and their compacts stipulate that their casinos be located at least twenty-five miles apart. Fitzsimmons implied that no other tribe can meet that stipulation, and thus no other tribe can demand the same deal. (Though looking at the map, I wonder about the Yakimas.)

Where the Spokane compact does depart from previous compacts is the fact that it grants an allocation of 900 slot machines, not 675. The 27 other recognized tribes can reopen their compacts to obtain the same 900 machine allocation, potentially increasing the total number of tribal slot machines statewide by about a third, from 18,225 to 25,200. In fact, that’s the whole point.

See, most of the existing allocation is already spoken for, so by coming to the table late, the Spokanes would otherwise be unable to lease additional slot machines to fill their casinos. They already operate about 500 Las Vegas style slots (illegally), but there is little the state can do to remove them, so there would be no incentive for the Spokanes to agree to a compact that doesn’t give them the opportunity to expand their operations. It’s not the extra 225-machine allocation that makes the deal work for the Spokanes, its the thousands of additional machines that will now be available for them to lease.

In addition to the increased allocation, the Spokanes have negotiated a number of other new goodies into their compact. Currently, slot machines are limited to a maximum $5 bet, but the Spokanes would be allowed to raise this betting limit to $20 on as many as 15-percent of their machines. Existing compacts require that players use coupons or cards to initiate play, but the Spokane compact for the first time permits using US coins and currency. And finally, the Spokanes have negotiated higher betting limits (essentially, none) at five gaming tables in one facility during a specified time period of up to 120 days each year.

Like the higher 900-machine allocation, the other tribes would have the right to reopen their compacts to obtain the same terms.

But… only if they agree to the same conditions. Like other compacts the Spokanes have agreed to pay 2-percent of net receipts into a local mitigation fund, and to contribute another 1-percent to charity. But the Spokanes have also agreed to contribute 0.13-percent to problem gambling treatment and prevention programs (the same contribution now required of commercial card rooms,) and have the option of either contributing an additional 0.13-percent to smoking cessation programs or make all of its facilities smoke free.

So… what does all this mean?

When it comes to the number of facilities and authorized machines, the Spokanes demanded the same sort of deal negotiated by the Colvilles. Given the Spokanes’ favored nation status, the state really couldn’t do anything about that. But this authorization would be totally worthless to the Spokanes without a larger universe of slot machines from which to lease, so while nothing requires the state to bump up the allocation from 675 to 900, there’s a certain irrefutable logic to doing so.

And you can be sure that the 27 other tribes will most definitely reopen their compacts to obtain the higher allocation, even if it means agreeing to the new problem gambling and smoking cessation contributions. Slot machines are the lifeblood of the gambling industry, accounting for the overwhelming majority of casino profits. This is money in the bank.

What the state gets from this is an end to the Spokanes’ illegal operations, relatively uniform compact terms across all 28 tribes — and assuming all the tribes seek the same deal — about $2.6 million a year in additional funding for problem gambling treatment and prevention programs.

This is what Gov. Gregoire gave the Spokanes: in number of locations and slot machines per location, essentially the same deal enjoyed by the Colvilles… as she was required to do by federal law. And anybody who understands the economics of the gaming industry will tell you that it’s all about the slot machines, which account for the vast majority of casino profits.

Van Dyk and others talk about the 22 states that have negotiated revenue-sharing into their compacts, but leaving aside a discussion of whether or not this is good policy (it isn’t), that horse left the barn long before Gregoire became governor. The state has absolutely no power to reopen compacts unilaterally, and Washington’s tribes have no incentive to give up a portion of their profits without receiving substantial concessions in return. And indeed, this is exactly what the rejected 2005 compact would have done: establish revenue-sharing in exchange for a dramatic expansion of gambling statewide.

How dramatic? Instead of a maximum of 2000 slot machines per location the Spokanes had negotiated 4000, and instead of a 675 or 900 slot machine allocation the Spokanes had secured a staggering 7,500! And that’s in addition to zero betting limits, casino credit, 24-hour operations, off-reservation casinos and more. Now that’s what I call “hitting the jackpot.”

Again, like the issue of revenue-sharing, there is a legitimate public policy debate to be had over the pros and cons of permitting such a dramatic expansion of gambling, but there is no question that in rejecting the 2005 compact—one which would have increased the number of permitted slot machines more than tenfold—Gov. Gregoire acted consistently with the will of voters, who just a year before had overwhelmingly rejected an initiative that would have merely doubled the number slot machines statewide… as they did similar slot machine initiatives twice before. Washington voters simply don’t want to turn our state into Nevada, not even in exchange for $140 million a year in shared revenue, and that’s why Gov. Gregoire wisely rejected the 2005 compact.

I’ve actually read the two compacts and the federal statutes, as well as numerous scholarly and government studies on the economics and impact of casino gaming, and I suggest that Ted Van Dyk, Chris McGann and other media know-it-alls either do the same and prove me wrong on the facts… or publicly apologize to Gov. Gregoire for misrepresenting her record and unfairly attacking her ethics.

A snapshot a friend took at the Fremont Solstice parade.  I think you can all guess the name over the frame on the flip side.

It’s a Drinking Liberally double feature for me tonight as the Columbia City chapter meets from 6PM to 8PM at the Columbia City Theater, 4916 Rainier AVE S. (next door to Tutta Bella’s), followed by the Seattle chapter which meets tonight (and every Tuesday), 8PM onward at the Montlake Ale House, 2307 24th Avenue E. Stop on by for some hoppy beer and hopped up conversation.

Not in Seattle? Liberals will also be drinking tonight in the Tri-Cities. A full listing of Washington’s thirteen Drinking Liberally chapters is available here.

And it’s Gov. Gregoire whose in the pocket of special interests? Yeah… right.

The BIAW alone has budgeted two to three million dollars this cycle toward electing Dino Rossi. (And if I have that number wrong, they are free to come right out and refute me.)

It looks like the stock market isn’t the only market suffering under President Bush’s economic stewardship:

Harvard University’s Joint Center for Housing Studies painted a bleak picture of the housing downturn, pegging it as possibly being “the worst in a generation” in its “The State of the Nation’s Housing 2008” report.

The study noted that housing starts, new-home sales and existing-home sales are at all-time lows since after World War II, while price declines and mortgage defaults are the worst on record.

I’m just sayin’.

Yup, Dino Rossi’s refusal to identify himself as a “Republican” is so transparently ridiculous that even FOX News is calling his bullshit.

Rossi dismisses the criticism by claiming he used the GOP moniker four years ago (new campaign slogan: “Deceiving voters since 2004”), though that’s not how he identified himself in the voters pamphlet last time around. And if it’s the Democrats who think voters are stupid, as Rossi claims, it raises the question why he’d even bother with this weaselly charade in the first place?

Makes you wish Rossi were a straight shooter like Republican GOP Party unaffiliated Insurance Commissioner candidate Curtis Fackler, the chairman of the Spokane County Republican Party, who publicly frets about folks who “won’t vote for a Republican no matter what.”

“And we wanted to get around that,” he frankly told FOX News.

Huh. With voters so eager to reject Republicans these days, you’d think the party’s standard bearers might want to consider changing their policies, instead of just their party’s name.

With the Dow Jones Industrial Average closing virtually unchanged at 11,842 today, it is interesting to note that the index is now up a mere 8.8 percent over President Bush’s seven and a half years in office, or less than 1.2 percent annually. By comparison, the average annual returns for Republican and Democratic administrations has been 10.5 and 11.7 percent, respectively. Indeed, over the past century, only Herbert Hoover has presided over a worse stock market than our current pro-business president.

I’m just sayin’.

Gov. Chris Gregoire is up on Daily Kos again with another diary, this time exposing to a national audience cozy relationship between Dino Rossi and his Orca-killing buddies at the BIAW:  “Obama and all Democrats face attacks from all directions.”

Each election year, we see more ads from these groups, generally negative attacks, and I have a feeling that 2008 is going to set records.  It’s a safe bet that John McCain’s campaign, unable to compete with Sen. Barack Obama’s broad, grassroots support, will receive millions in support from 527 groups in this election.

In Washington state, my Republican opponent has already given the green light to his special interest friends.  The Building Industry Association of Washington (BIAW) is the most powerful special interest lobby in Washington. Despite their benign name, the BIAW’s tactics and policies are anything but.

The BIAW’s values don’t match up with the voters of Washington. As you can see here, here, and here, local bloggers agree.  The BIAW has opposed cleaning up toxics in the Puget Sound, opposed fighting global warming and even opposed protecting orca whales.  My opponent voted with them 99% of the time while he was a State Senator.

This special interest lobby is my opponent’s biggest backer, and has already spent spent $500,000 on radio attack ads that distort my record, and challenge my integrity as a governor and a mother – and it’s only June.

Please read the whole thing and take the time to recommend Gov. Gregoire’s diary; the longer we keep this in the recommended list, the louder her message.

Currently gracing the front page of HA, Darryl highlights a recent poll that shows Darcy Burner trailing Dave Reichert by six points, Lee accuses Barack Obama and the Democratic Congress of being “pretty pathetic” on protecting our Fourth Amendment rights, and Will shows some love to King County Councilman Larry Phillips, a local Democratic politician who I have nothing particularly against, but quite honestly, have nothing particularly for… especially in a potential face-off against Executive Ron Sims, a man I openly admire (if often disagree with.)

But then, that’s the sort of ideologically rigid, uncompromisingly partisan amen blogging you’ve come to expect from HA. I suppose you can just write it off as one three of those “rare occasions” when we dare to stray from party orthodoxy.

George Carlin, comedian, actor and hero of First Amendment advocates (and English language enthusiasts) everywhere, died yesterday at age 71.

Last week I wrote about my cat’s apparent near death experience at the hands jaws of the coyotes rumored to be inhabiting Seward Park.

Well, it’s no longer a rumor. Friday afternoon my daughter and I were walking our dog along the trails atop the park, taunting Feisty that the scent she was furiously sniffing was of the coyotes that had invaded her territory, when what should cross the path about 50 feet ahead of us, but a coyote. It stopped in the middle of the path, looked at us for a moment then scurried off into the woods.

I never doubted that there really were coyotes in the park, but I sure didn’t expect to see one, and right on cue, just a few minutes into our hike. It was about 50 pounds or so, maybe a little bigger than our dog, and damn beautiful.

The Seattle Times editorial board today urges the state Utilities and Transportation Commission to “Block PSE sale,” arguing that the highly leveraged proposed buyout of Puget Sound Energy would be “hazardous to ratepayers.” And, well, I don’t disagree.

Why do this transaction? For shareholders, the answer is easy: They get $30 a share, in cash, immediately, for a stock that traded recently in the lower $20s, with the profit taxable at the 15 percent capital-gains rate.

For Puget’s CEO, Stephen Reynolds, who has options on 300,000 shares priced at $22.51, the attraction is obvious. He also gets a payment of $4.4 million from the acquirers, with the tax paid by them.

[…] And then there are the people who rely on Puget for their electricity and gas. As a result of this deal, they get a utility burdened with $1.4 billion in extra parent-company debt, a mortgage that buys the ratepayers nothing of value to them. And it is not a mortgage really, but a medium-term debt that will have to be refinanced a few years hence at an interest rate no one can now determine.

Last week I kinda-sorta debated uber-conservative Grover Norquist on the limits of governments, and it’s issues like this that really test the ideological purity of self-proclaimed free marketeers like Norquist and his ilk. No doubt, this is a deal that is good for shareholders. And no doubt the unchallenged doctrine of the invisible hand would argue that the market always makes the most efficient allocation of resources. But it’s hard to see what if any benefit would accrue to ratepayers by having foreign investors mortgage PSE’s assets to facilitate a leveraged buyout?

PSE is after all a monopoly throughout most of its coverage area, leaving consumers no alternative supplier of electricity or natural gas. Given a deregulated market (the conservative ideal), it would be equally foolish to expect investors to build competing power lines in response to rising rates as it would to believe that competing power grids could somehow constitute an efficient allocation of resources.

One can reasonably argue with specific regulations and the specific decisions of government regulators, but there are simply some products and services for which a regulated monopoly—or God forbid, a government agency—provides the most efficient and beneficial economy of scale. To inflexibly argue otherwise—that regulation is always harmful and that the public sector is always less efficient than the private—is to argue that PSE should not only be free to sell out to whomever it pleases under whatever conditions most benefit shareholders, but that it should also be free to raise utility rates as high as consumer demand will bear… which in a natural monopoly for a crucial commodity can be pretty damn high.

Imagine electricity rates quadrupling the way gasoline has done, with no end in sight, and imagine what havoc that would wreck on our local economy. That would be an unregulated free market at work.

I expect there are arguments to be made against recommendations that the UTC block PSE’s sale, but I’m wondering if anybody can cogently argue against giving UTC the power to do so?

Washington Post political blog The Fix has bumped WA-08 up a couple notches to list it as the 17th most likely US House seat to flip parties this November:

17. Washington’s 8th (R): Every Republican strategist we talk to insists on the one hand that Rep. Dave Reichert is the only GOPer who could possibly hold this Seattle-area seat but on the other acknowledges that Reichert’s time may be up. Barack Obama at the top of the national ticket is bad news for Reichert, as the Democrats’ presidential candidate will roll up the vote in metropolitan Seattle. Darcy Burner, who took 49 percent of the vote in 2006 against Reichert, is, by all accounts, an improved candidate. The political environment is everything in this district. If Obama wins big in the 8th, he is likely to carry Burner along with him. (Previous ranking: 19)

Yeah, but then what do you expect from an amen blogger like Chris Cillizza?

The Seattle Times editorial board just loves the King County Sheriff’s Office’s crackdown on underage drinking, which resulted in 143 arrests or citations over the first weekend of its annual “Party Patrol.”

Every year, parents are nabbed in the act of willfully ignoring the party they know is being thrown in their absence. A few genuine idiots get caught trying to be the cool mom and dad who host an event and provide alcohol to minors.

Yeah, well, it was certainly a different era, but my mom and dad hosted a couple high school parties at our house where they provided the beer, and they certainly didn’t do it to be “cool.” I suppose you can argue with their judgment, but they were pragmatic enough to know that the kids where going to drink regardless of the party’s location, and they’d rather it happen under their close supervision.

Ironically, the local chapter of Mothers Against Drunk Driving was started by the angry mother of a classmate of mine, after my parents called her to pick up her daughter, who was in no condition to drive home. It wasn’t the first or last time I saw this girl get drunk, but it was the only time I saw anyone prevent her from getting behind the wheel of a car.

Illegal, underage drinking only became more normalized in college, where the university actually threw a kegger for us during freshman orientation, and the RA’s made a point of explaining which local bars served undergraduates and which did not. Attitudes started shifting near the end of my senior year (1985) after a study revealing a serious binge-drinking problem on college campuses (duh-uh) was reinforced by a string of alcohol related campus tragedies.

Ominous headlines led to crackdowns by both local university and law enforcement officials… but that only drove the parties off campus. In one memorable example of the media hysteria of the time, a group of Rutgers students held a clandestine end-of-semester kegger outdoors in a wooded area near campus, where the metal keg was subsequently struck by lightning, killing one student and injuring several others. Newspaper headlines the next day trumpeted “another tragic alcohol related death” at a local campus.

Don’t get me wrong, I’m not an advocate of underage boozing—especially of the binge variety—but having been a teenager myself I seem to recall that kids will be kids, and I find it hard to believe that arresting a few teens or their parents is going to have much of a long term impact on the problem. I hate to get all libertarian on you (that’s Lee’s job) but it strikes me that law enforcement provides exactly the wrong approach to what is at its core a public health issue, and thus I’d much rather the Sheriff’s office focus their resources on apprehending and punishing drunk drivers, rather than waste their time on efforts that may draw flattering headlines, but really do little to address the larger societal problem.

We, as a nation, have an unhealthy attitude toward alcohol and other drugs, that leads to the sort of binge consumption that truly puts our youth at risk. And I don’t think an annual police crackdown, or a couple of rah-rah editorials, does much to promote a thoughtful discussion on the issue.