TEXAS HOLDEM ONLINE POKER

"We're doing well now," said Schayltz, who has owned the poker room since 1990, "but I really believe that unless things change, it's only a matter of time before we are out of business."

For Rick Baedeker, it's not life or death - but it's close.

"If this proposition goes down," says the president of Hollywood Park racetrack, "we will have to retrench as an industry and figure out some other wayto keep going. But it will be tough."

What unites Baedeker and Schayltz, who, at least nominally, are rivals for Californians' gambling dollars, is their antipathy for a common enemy - Indian casinos.

Since voters approved a constitutional amendment in 2000 that gave tribes an exclusive franchise on slot machines in California, Baedeker, Schayltz and virtually everyone else in the racing and card room industries has prophesied doom for their businesses.

What they need to survive, they say, is a level battlefield. What they need, they say, is Proposition 68.

Created by two Sacramento political consultants, drafted by the attorney who created the California Lottery initiative 20 years ago, and sponsored by two county sheriffs, Proposition 68 takes a curious carrot-and-stick approach to solving Baedeker's and Schayltz's problems.

Under it, every California tribe that wanted to run a casino would have to enter into a new compact with the state. The tribes would have to share 25 percent of their slot machines' net revenues with local public safety agencies and programs for abused and foster children.

The tribes also would have to agree to state court jurisdiction in disputes with customers or local governments near the casinos, and abide by state environmental laws.

Moreover, the new deals would have to be approved by the governor, the Legislature and the U.S. Department of Interior within 90 days of the proposition taking effect.

If even one tribe failed to agree, a group of 11 card rooms and five racetracks - all of them in the Bay Area and Southern California - would be allowed to operate a total of up to 30,000 slot machines.

The tracks could have up to 3,800 machines, the card rooms from 800 to 1,700 slots. Thunder Valley Casino in Placer County, the largest tribal casino in the state in terms of machines, has about 2,700.

Card rooms like Schayltz's would be granted four slot machine "licenses" for each table in their establishments. They could then sell the licenses to the highest bidders among the big tracks and card rooms but could not operate slots themselves.

The tracks and card rooms would be obligated to share about a third of their slot revenues with local governments, fire and police agencies and programs for troubled children.

Proponents have stuck steadfastly to the campaign message that the tribes need only pay their "fair share" to avoid any competition unpleasantness.

"All the tribes have to do is agree to the provisions (of 68)," said Baedeker, "and not a single slot machine will be operated by anyone else."

They also insist they are only following up on Gov. Arnold Schwarzenegger's pledge during last year's recall campaign to collect a "fair share" of revenues from the tribal casinos.

Schwarzenegger, who ardently opposes Proposition 68, has since reached deals with nine tribes that give the state about $200 million per year, along with financing guarantees for a $1 billion transportation bond.

To the proposition's opponents, the fair-share argument is a contrivance designed to distract voters from the ballot measure's real purpose.

Foes of Proposition 68 - who include a majority of district attorneys, county sheriffs, and law enforcement organizations as well as the Republican governor - point out that even if every tribe agreed to 68's provisions, a rejection of the deal by a federal court or the Interior Department would trigger the slots-for-tracks-and-card-rooms provision.

"This is nothing more than a transparent attempt to put Las Vegas-style casinos in the midst of California's largest urban areas," said Dan Schnur, a consultant to the No on 68 campaign. "To suggest anything else is ludicrous."

Whatever the merits of fair-share and urban-casino arguments, it's indisputable that slot machines are unrivaled in the gambling business as revenue producers. In the right setting, a single machine can easily net $175,000 a year.

And card room and racetrack people say it's indisputable that they can't compete with the tribes if they don't get to play by the same rules.

Racing industry officials say California already is hemorrhaging business to states such as New Mexico and West Virginia, where "racinos" - racetracks with slot machines - are legal.

The slots generate revenues that create bigger purses for the races, which makes the states magnets for horse breeders, owners, trainers and jockeys.

"We're not talking about losing one racetrack, but racetracks all over California and the entire breeding industry," said Jack Liebau, president of the Bay Meadows track in San Mateo. "That's 60,000 jobs at risk."

For California's card room operators, the success of tribal casinos has accelerated a decline that began about a decade ago and has seen the number of rooms go from 220 in 1997 to 92 today.

One of the survivors is Schayltz, a 55-year-old former general contractor who bought the Lucky Derby basically because he liked to play poker.

Over the past decade, he said, he's fought a steady and expensive battle with state and local officials over efforts to expand his business.

"I don't know how many times I came home and told my wife, 'Honey, if we don't have a good weekend, we are going to have to shut the doors,' " he said.

Schayltz acknowledges that business lately has been good, spurred by the current public fascination with high-stakes poker tournaments on television, "but we all know that won't last."

The money from leasing the slot licenses he would get if Proposition 68 passes, he said, would help keep the doors open after the current HoldEm fad fades.

But Schayltz contends the issue is more about fairness than money.

"I served 27 months in Vietnam, I pay my bills, I pay my taxes, I provide jobs," he said. "How is it fair that my business should slowly die while the Indian casino down the road gets special privileges from the state government?"

Even if Proposition 68 fails, its proponents have sent clear signals that the war won't be over.

A group of horse racing interests already has filed a suit that seeks to block deals the governor and the Legislature approved in June with five tribes that would allow those tribes to have as many slots as they want. They also have indicated they will launch referendum drives against any new deals that allow Indian casinos to expand.

"The campaign and the lawsuit are separate fronts," said David Townsend, the measure's chief political consultant. "No one knows what is going to happen in November, and we have the right, and are exercising the right, to bring a legal challenge."