Minorities in the Labor Force - Native American Casinos—a Matter Of Self-rule

The Indian Gaming Regulatory Act of 1988 (PL 100-497) gives tribes "the exclusive right to regulate gaming on Indian lands if the gaming activity is not specifically prohibited by federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity." The law requires that only tribes, not individuals, run gaming operations. The tribes do not need state approval for class two casinos, which are supposedly bingo halls but which in many cases have slot machine parlors that skirt the law. Class three casinos offer slots, roulette, craps, and poker, and they require state approval. Thus, governors strike deals with tribes, granting class three approval in exchange for a share of the profits going to the state treasury. With many states facing severe budget problems, tribal gaming has become an attractive source of revenue. As a result, tribal gaming has gained considerable political influence. The Tribal Law and Policy Institute reports in "Native Gaming Resources" (2005, http://www.tribal-institute.org/lists/gaming.htm) that as of 2005, 224 of 562 federally recognized Indian tribes were engaged in gaming. How much has tribal gaming helped the Native American population as a whole?

Donald L. Barlett and James B. Steele, in "Wheel of Misfortune" (Time, December 8, 2002), provide a scathing and controversial review of tribal gaming. According to Barlett and Steele, when tribal gaming emerged in the late 1980s "in a frenzy of cost cutting and privatization, Washington perceived gaming on reservations as a cheap way to wean tribes from government handouts, encourage economic development and promote tribal self-sufficiency." But the 1988 Gaming Act "was so riddled with loopholes, so poorly written, so discriminatory and subject to such conflicting interpretations that 14 years later, armies of high-priced lawyers are still debating the definition of a slot machine." Barlett and Steele maintain that only a handful of tribal gaming establishments, those operating close to major population centers, are successful, while the overwhelming majority are either too small or too remote in location: "Casinos in California, Connecticut and Florida—states with only 3% of the Indian population—haul in 44% of all revenue." Barlett and Steele state that in 2002 "290 Indian casinos in 28 states pulled in at least $12.7 billion in revenue. Of that sum,… the casinos kept more than $5 billion as profit. That would place overall Indian gaming among Fortune magazine's 20 most profitable U.S. corporations." But "just 39 casinos generated $8.4 billion. In short, 13% of the casinos accounted for 66% of the take." In 2004 total revenues were projected to top $15 billion.

Also controversial was the authenticity of the tribes involved in gaming. According to Barlett and Steele, leaders of tribes involved in gaming "are free to set their own whimsical rules for admission, without regard for Indian heritage. They may exclude rivals, potential whistle-blowers and other legitimate claimants. The fewer tribe members, the larger the cut for the rest. Some tribes are booting out members, while others are limiting membership." Moreover, many "long-defunct tribes and extended families" have attempted to gain congressional certification to become involved in tribal gaming. In New York State some tribes that are not even recognized as New York tribes, including tribes from Oklahoma and Wisconsin, have teamed with area developers to buy land in the Catskills and elsewhere in the state in hopes of building casinos. They are opposed, however, by local communities—as well as the likes of Donald Trump—who fear further competition to casinos operating in Atlantic City.

McCulloch argues that revenues from gambling casinos have helped spur economic development on reservations and allowed Native Americans to reassert tribal sovereignty. She writes: "Native American tribes have looked to gambling as a means to achieve the economic autonomy requisite for tribal sovereignty, and to improve the lives and the health of their members through employment. The immediate effect of Indian gaming seems to have done just that." The casinos employ large numbers of Native Americans, and with the profits from casinos, the tribes are building schools and community centers; financing education trust funds, local government, and new businesses; and putting in water and sewer systems on reservation lands.

Proponents of tribal gaming point to a number of success stories. The Oneidas of Wisconsin, for instance, took advantage of a bingo hall to lower the tribe's unemployment rate in the early 1990s and used proceeds to build an elementary school and subsidize a Head Start program. The Suquamish in Washington State used gambling profits to buy back former reservation land. While only a handful of tribal casinos generate large revenues, even those operations that break even create jobs that benefit many Native Americans. Tribes not able to take advantage of gambling can also benefit from revenue-sharing programs, such as the one set up in California. The Alliance of California Tribes reports in "California's Gaming Tribes Share More Than $39 Million with Other Tribes" (August 28, 2001, http://www.allianceofcatribe-s.org/financialsharing.htm) that sixty-one tribes with gaming compacts share profits with eighty-four qualifying tribes.

Much of the growth in tribal gaming, which is outpacing both Atlantic City and Las Vegas, is due to the expansion of facilities into full-fledged resorts. Wary that the future might see the curtailment in revenues, some tribes are looking to diversify by investing proceeds into nongaming businesses, thereby establishing an economic base independent of gambling. To counter adverse publicity regarding tribal gaming, the National Indian Gaming Association has launched a public relations effort, the United Tribal Public Relations Campaign.