Casinos: The Effects of Casinos - The Effects Of Native American Tribal Casinos

Native American tribes who encounter opposition to their casino plans attribute some of the opposition to the issues described above and some of it to racism. On the other hand, some critics of tribal casinos believe that they encourage a cycle of dependence. These critics claim that tribe members who were formerly dependent on the federal government are now dependent on their tribal government.

The Pros

In 2004 the National Indian Gaming Association (NIGA) published Indian Gaming: Final Impact Analysis, a study of the economic and social effects of tribal gaming. The report notes the following advantages that tribal gaming and associated businesses have brought to Native Americans:

• Generated revenues of nearly $18 billion in 2003
• Created nearly 500,000 jobs
• Paid wages of approximately $5 billion to employees of tribal governments and economic development enterprises
• Contributed to substantial development in Indian-owned small businesses during the late 1990s
• Provided millions of dollars to nongaming tribes through special trust funds
• Provided a means for trade and commerce between gaming and nongaming tribes, for example, through purchasing of goods and services
• Resulted in contributions of more than $100 million in 2003 from tribal governments to charities and non-profit organizations
• Funded essential tribal programs, such as schools, hospitals, water and sewer systems, roads, police and firefighting programs, infrastructure needs, and cultural and social projects

The report concludes that "gaming has given Tribal leaders the opportunity to acquire the knowledge, skills and self-confidence needed to build strong Tribal governments and, for the first time in generations, provide for the health, education, and welfare of their people."

A study published in April 2000 (Jonathan B. Taylor, Matthew B. Krepps, and Patrick Wang, The National Evidence on the Socioeconomic Impacts of American Indian Gaming on Non-Indian Communities, Chicago: Lexecon) found that Native American casinos had substantial economic and social benefits to surrounding communities and that these impacts were greater than those from non–Native American casinos. This was because Native American casinos were more likely to be in areas suffering from severe economic depression.

The researchers examined a hundred communities across the country including twenty-four in which commercial casinos had been introduced and sixteen in which tribal casinos had been introduced. Analysis of thirty indicators of socioeconomic health revealed no harmful impacts associated with the introduction of tribal casinos. The casinos were praised for benefits including infrastructure improvements, economic growth, higher employment, better social programs, greater indigenous language retention, and all-around community vitality.

The Cons

Critics of tribal gambling claim that tribal casinos unfairly compete against local hotels, restaurants, and pari-mutuel operators; hurt state lottery sales; place an increased burden on states to address problems resulting from pathological gambling; introduce opportunities for money laundering and organized crime; and hurt the culture and political stability of the tribes.

An editorial by the staff of the Wall Street Journal (April 4, 2002) made three major claims against the tribal casino industry: that it is underregulated, linked with organized crime, and rife with political scandal. The editorial cited the relatively low budget of $8 million under which the National Indian Gaming Commission (NIGC) operates as proof that the industry is underregulated. The NIGC, which is responsible for oversight of hundreds of tribal casinos, employs fewer than thirty full-time auditors and inspectors, while in contrast, the New Jersey gaming authorities employ more than two hundred auditors to oversee only twelve casinos. The editorial cited reports from other newspapers linking tribal casinos in Minnesota, Florida, and California with known Mafia figures. Finally, the editorial accused politicians of misusing the federal recognition process to give tribal status to "groups of dubious lineage" so that these tribes could open casinos.

The journal Indian Country Today called the editorial "generalized fiction" and insisted that tribal gambling is more regulated than other gambling enterprises in the country. Comparison of the NIGC budget to those of state gaming commissions is inaccurate because the NIGC is not the primary regulatory authority over Class III gambling. The tribes spend more than $100 million per year on their own regulatory structures.

Furthermore, the states that enter compacts with tribes have input in how tribal gaming is conducted, and no states have complained about problems with underregulation. The magazine reports that there have been isolated incidents of organized crime figures trying to infiltrate tribal gaming operations, but that the wrongdoers have been ferreted out and caught. The article cited a statement by the chief of the Organized Crime and Racketeering Section of the U.S. Department of Justice, who in 2001 reported to a Senate committee that there had been isolated incidents but no systematic infiltration by organized crime figures.

In general, state and local authorities associate tribal casinos with increased regulatory, law enforcement, and infrastructure costs, but also with savings on welfare assistance payments. Increased costs can be offset by licensing fees collected from the tribes as dictated in state-tribal compacts.