by C.W. Nevius

San Francisco Chronicle

The first thing that hits you when you stroll through the doors of Casino San Pablo is the low-hanging haze of cigarette fumes. For a smoke-free state, it's a jolt. How can they get away with this in California?
"This is Indian land," shrugs an employee. "They can do what they want."

That may not mean much to you. Maybe you don't play two-handed poker or Pai Gow, or maybe you don't care that the Lytton Band, a 253-member Indian tribe, was awarded this little chunk of land in the middle of San Pablo last fall as a reservation.

But you are going to care. Soon.

Here's what's coming at the casino: a massive expansion, a multi-level parking garage and a super-sized casino. There will be blackjack, video poker and -- that license to print money that brings in 80 percent of any casino's business -- slot machines.

What's the big deal, you ask? Maybe you already have visited a casino like Cache Creek, about 85 miles northeast of Oakland. There are lots of casinos in California.

The difference is Casino San Pablo will be the first in the state to be established in the middle of a city. Right up the freeway from Oakland, just over the bridge from San Francisco, there will be "Las Vegas style"
gaming. Little Reno right here in the East Bay.

And that may be just the start. Critics worry that once a casino is established within a city, it will open the door for urban casinos elsewhere in the East Bay.

Indian gaming interests certainly have the clout to get it done. An aide to Gov. Arnold Schwarzenegger said the other day that California's Indian tribes were hardly noticed five years ago. Today they are one of the biggest forces in California. How big? State officials have estimated tribal gaming revenue at between $5 billion and $6 billion a year.

"But," says Kim Rueben, a public finance economist with the Public Policy Institute of California, "I would think it is higher than that."

That is what's behind the current negotiations between the governors' office and six of California's 107 Indian tribes. Schwarzenegger promised in his campaign for governor to make tribes pay their "fair share" of gaming taxes. You can bet that when an agreement is announced, probably within weeks, the tribes will be putting as much as $1 billion a year into taxes.

Sound good? Sure. Except for what comes with that injection of cash. A tribal source told a Southern California reporter that with the new deal, the potential for Indian gaming expansion could be "limitless."

And that little card room in San Pablo will be ground zero. Is that what the East Bay wants?

"I don't believe in gambling in urban settings," says Contra Costa County Supervisor Mark DeSaulnier, who introduced a resolution opposing Indian gaming casinos in the county. "I think it is a deal with the devil, and you never really recover the costs."

San Pablo City Manager Brock Arner regards such hand wringing with the same amusement as Capt. Renault, who in the film "Casablanca" told Humphrey Bogart that he was "shocked, shocked to find that there's gambling going on here."

"You read the sports pages," Arner says. "You see the betting line every day. You have never been to the track? Never bought a lottery ticket? My point is that it seems that, like liquor, gambling is here to stay."

Arner can take you through the math. The city of San Pablo currently gets $2.6 million from Casino San Pablo, "26 percent of our general fund. We'd be in a world of hurt if the casino went away." He expects that figure to jump to $5 million a year when Casino San Pablo expands.

Is it worth it, even though studies show that states with urban casinos find that they dry up local businesses, use up discretionary income and promote gambling?

Frankly, if you have any concerns, you're too late. The Casino San Pablo project is essentially a slam-dunk. Tribal attorney Howard Dickstein has called the project "a virtual certainty," and the governor has made it clear he has no problem with an urban casino as long as the city agrees.

Agree? San Pablo will probably throw a party.

At this point, the real battle is over the next step. Two months ago NSV Development snapped up 30 acres along the Richmond Parkway in the unincorporated community of North Richmond -- less than 5 miles from Casino San Pablo. This is the same firm that tried, and failed, to get an Indian casino in the city of Richmond. Now, it is clearly hoping to work the same kind of deal as the Lytton Band by turning the land over to a tribe for a casino.
There's the concern that Casino San Pablo is a foot in the door and that others will pop up, selling residents on easy money for their city, payments to help balance the state budget and a thriving local business.

There have been proposals for casinos in Antioch, Richmond and even Oakland, where Mayor Jerry Brown is enthusiastic about the idea.

"The thing that concerns me," says Richmond City Councilman Tom Butt, "is that people look on these silver bullets. Forget the tried and true ways.

We'll get a casino, and everything will be OK."

Butt may remember the last time gambling was going to pump millions into California -- when the lottery was going to save our schools.