IV. Indian Gaming
Indian gaming has mushroomed over the last three decades. Although there is agreement that it has grown dramatically, it is difficult to put an exact dollar figure on the size of Indian gaming. There are no publicly collected and released statistics figures, as there would be with a public corporation involved in gaming. Estimates of the gross revenues vary widely. A writer on gambling and economic development, Robert Goodman, quotes a $6 billion figure.1 A quick review of other articles yields estimates of $2.3 billion,2 $8 billion,3 and $2.6 billion.4 Not all these revenues are going to the tribes, however, as the management companies take a significant share. By some accounts 65 to 85 percent of the income goes to management companies.5 Again, the exact figure is not known and those figures are higher than the ones seen in recent newspaper stories about signed contracts.
Despite its Popularity and Widespread Availability, the Future of Indian Gaming is Unsettled. Some observers believe that despite its widespread popularity, Indian gaming could become illegal again.6 The history of Indian gaming is replete with conflicts with the states. Native Americans are concerned that those conflicts could threaten what some observers are calling the "new buffalo." Indian gaming has earned that term because it is a single source capable of feeding and clothing the Indians. It has become the one economic development program that has been able to overcome the poor quality and remote location of most of their lands.
The conflict between the states and Indian tribes arises because both are sovereign entities. As such, states are severely limited from taxing and exercising jurisdiction over activities on tribal land. When the interests of the Indian tribes and the states differ, this sets up a conflict. The history of tribal-state relations have been not always been free of conflict and tension.7 The states, in order to prevent the off-reservation effects of certain activities that occur on the reservation have sought to extend authority over reservations. The result has been substantial litigation between the states and tribes in an attempt to define the relationship between the two. The high stakes of gaming and the fact it is an area traditionally regulated by the state have intensified the conflicts.
Although Indian tribes are sovereign entities, they are clearly dependent and subject to federal policy and regulation. Federal policy has fluctuated dramatically over the years, alternating between forcing Native Americans to assimilate or allowing them to maintain their separate identity. During the most recent swing in policy, Congress passed the Indian Civil Rights Act of 1968 which embraces continued tribal existence. The support and promotion of gambling by the federal government is an outgrowth of the policy of supporting a separate identity for indigenous peoples.
First Major Litigation Spurred by Indian Bingo in Florida. The state of Florida had legalized bingo for nonprofit entities. The state had adopted specific laws governing bingo, including prize limits and hours of operation. In 1979, the Seminole tribe opened a high stakes bingo parlor that did not comply with many of the state laws. They were the first federally recognized Indian tribe in the U.S. to operate a high-stakes bingo operation on a reservation.8 The Sheriff of Broward County, the site of the bingo parlor, threatened to close the operation down. Florida, like California, is a Public Law 280 state, meaning that Congress granted the state the authority to enforce the state's criminal laws on reservations. The tribe sued to prevent the action.
In the first important decision in a modern Indian gaming case, the U.S. Court of Appeals rejected the arguments of the State of Florida.9 The Court found that the relevant question was whether gambling, or more specifically bingo, was prohibited in Florida or was it merely regulated. If it was prohibited, then clearly the state could act to prevent gaming on Indian lands. But since Florida allowed charitable bingo, then bingo was regulated rather than prohibited within the state and was a civil rather than a criminal issue. States are severely restricted in enforcing their civil jurisdiction on Indian reservations. The tribe was allowed to continue their operations. California lost a similar suit over bingo games.10
Indian Gaming Began to Grow Rapidly. At that time, only five states prohibited all forms of gaming, giving the Indian tribes a great deal of latitude to expand their gaming. By 1988 over 100 tribes were engaged in bingo and one researcher put the collective revenues at over $100 million.11 Not surprisingly, the tribes wanted to move beyond bingo to card games and slot machines.
Congress Supported the Spread of Indian Gaming.12 Congress was motivated by the conditions on reservations. By any standard they were grim.13 In 1989, the median family income on reservations was $13,489, while it was $34,213 in the remainder of the country. On reservations, 47.3 percent of families lived in poverty compared to the national average of 11.5 percent. The alcoholism rate among Indians was 663 percent higher than the national average, the suicide rate was 95 percent higher.
Objections Were Voiced Over Indian Gaming. The expansion of Indian gaming was not greeted with enthusiasm from all quarters.14 The states, even if they have legalized gaming, have long been reluctant to open up gaming on Indian lands.15 Law enforcement officials were concerned with the possibility that organized crime would infiltrate Indian gaming operations. Non-Indian gaming operations were very concerned about the competition from businesses that did not have to pay the same state and local taxes that they did. Governments were concerned about the possibility of social problems resulting from increased gaming. Another concern of government was its inability to tax gaming on reservation lands.
During this period, the federal government was not active in regulating Indian gaming. The Bureau of Indian Affairs had adopted tribal gaming ordinances for years, but generally gaming was not an issue of regulatory concern.16
The problems associated with Indian gaming began to grow.17 Non-Indian managers who helped tribes establish gaming operations were taking the majority of the profits. Suspected organized crime involvement began to surface. There was also evidence of cheating and skimming. Some dishonest tribal members were involved in criminal activities. These events began to create pressure for Congress to act, but there was not a consensus on what should be done. A major case regarding gaming in California was pending before the Supreme Court, adding to the inertia in Congress.
The pending Supreme Court case had developed when California had threatened to take criminal action against the Cabazon and Morongo Bands of Mission Indians because of their card game and bingo casino. These games were not operated in a manner that was consistent with state law. In 1987, the Supreme Court found for the Indians in the landmark case, California v. Cabazon Band of Mission Indians.18 The U.S. Supreme Court upheld by a six to three vote the right under federal law for Indians to run gambling operations without state regulation in states where such gaming was legal for any purpose. As the court noted:
"California itself operates a state lottery and daily encourages its citizens to participate in this state-run gambling. California also permits parimutuel horse-race betting."19
The decision in the Cabazon case ultimately prompted Congress to act. After Cabazon, the states and Nevada gaming interests became the principle proponents for new gambling legislation, because they wanted more limitations and control.20 Shortly after, the Indian Gaming Regulatory Act (IGRA) was passed.
Congress Intended to Accomplish Five Objectives With the Passage of IGRA.
IGRA divided gaming into the following three classes or categories:
Class I: Consists of social games for minimal value prizes associated with traditional tribal ceremonies or celebrations. This class is within the exclusive jurisdiction of the Indian tribe.
Class II: Includes limited card games, lotto, and bingo, but not the electronic form of the games. Class II games are within the jurisdiction of the tribes primarily, but is subject to oversight by the National Indian Gaming Commission. These games are only permitted in states that permit such gaming for any purpose and/or any condition. Although states almost always heavily regulate and restrict such games, many of those state restrictions do not always apply to the tribe.21 For example, although Class II card games must be played in conformity with state laws and regulations on hours of operation and limitations on wager or pot sizes, state limits do not apply to bingo at a tribal reservation facility.
Class III: Encompasses those gaming activities such as slot machines and other games that are commonly operated by Nevada or Atlantic City casinos, lotteries, or parimutuel facilities. Class III gaming is subject to negotiations between the state and the tribe. The exceptions are those cases where the tribe already offered Class III prior to the passage of the IGRA and these were grandfathered.
In order for a tribe to offer new Class III gaming, three events must occur:
1. The state in which the reservation is located must permit the same specific gaming activities that are permitted.
2. The tribe passes an ordinance authorizing the gaming activities.
3. The gaming is conducted in conformance with a compact entered into by the tribe and the state.
The IGRA also reserves for the federal government exclusive jurisdiction over criminal prosecutions of state gambling laws at Indian facilities.22 For the state to gain any say over how Indian gaming is conducted, the state must enter into a compact that allows state oversight.23
States Unhappy With Tribal Authority Over Gaming. The States were interested in protecting their prerogatives and opposed the grant of authority in the Cabazon case and the IGRA.24 The IGRA requires states to allow tribes to conduct gambling to a greater extent than the state allows other person and entities to gamble. At the same time, IGRA does not automatically make tribal gaming subject to state regulation intended to protect patrons and minimize the negative side-effects of gambling on nearby communities.
Furthermore, the reluctance of the states can also be understood by noting that neither the tribes nor tribal members pay state sales taxes or state income taxes on income earned on reservations nor do they have to pay property taxes. This is a long-standing prohibition that predates IGRA. To the extent that tribal gaming reduces lottery ticket sales or causes consumers to spend money on gambling that would otherwise be spent on goods or entertainment that generate sales tax, the states are direct competitors, not mutual beneficiaries of gambling on Indian reservations.
The compact provisions have proven to be a contentious element and has been the subject of much litigation. Many states have not wanted to negotiate because they did not agree with the position of tribes that certain Class III games were legal in the state. They did not believe that Congress envisioned casino gambling in states just because the state allowed charity Monte Carlo nights. Senators Inouye and McCain have indicated that if the states do not negotiate compacts, Congress might preempt and establish sole federal regulation of Indian Gaming.25
In particular, the requirement that the states negotiate with the tribes in good faith has spawned a great deal of litigation. The states were required under IGRA to negotiate in good faith to enter into a compact with a tribe to allow Class III gaming. If they did not do so, the tribes were allowed to sue in federal court. Congress adopted this good faith requirement to ensure that the states would not stonewall but would enter into negotiations that could and would be completed.26 Ironically, the compact provision was put into the bill at the behest of the states and limited the freedom that the tribes had gained in the Cabazon case. The Nevada gaming interests also pushed for the compact provisions.27
Under the provisions for negotiating a compact, if negotiations failed, each party had to submit an offer to a mediator. The mediator picked an option and submitted it to the tribe and state. If the state did not approve the mediator's option, the Secretary of the Interior could step in and approve the compact. Even with state approval, the Secretary must approve a compact for it to go into effect.
The issue of good faith, however, will be less important in the future. The Supreme Court of the United States recently decided a Florida case on the issue. The court agreed with the state's position that the 11th amendment prevents states from being sued by the tribes in federal court without the state's permission.
It is an open question of what will happen next. The compact is merely an option under federal law, perhaps leaving the tribes the ability to go straight to the Secretary of the Interior. The Secretary of Interior has issued an Advance Notice of Proposed Rulemaking for regulations that would allow that. The states oppose this and argue that such an action is bad policy, in violation of IGRA, and possibly unconstitutional.
Connecticut Lost One of the First Significant Cases. Connecticut's position was that Class III games were not legal in the state. The Mashantucket Pequot Indians pointed out that a charity could have an annual Las Vegas night where casino-type games were legal. Because casino-type games were legal under certain conditions the court held the state to negotiate a compact to allow those games to be played on Indian land with or without those conditions. Thus, because charities could have a casino night one time a year, the Indian tribes were permitted to open a casino. Furthermore, even though these games were strictly limited and regulated by state, none of the state's limitations or regulation would apply, except as agreed on the compact. Because the state had failed to negotiate with the tribe, the court ordered the state to negotiate a compact within 60 days of its order.
The court settled this dispute and agreed with the tribe's position. The state was found to not be negotiating in good faith and the Indians were able to set up a casino. This was the first of several cases where the state lost the leverage that it could have gained by a compact, because it failed to negotiate. While the Supreme Court decision has eliminated the ability of tribes to take states into federal court, it still leaves states without authority unless they negotiate a compact.
There was an additional dispute in Connecticut over whether slots were allowed. The state and tribe came to agreement and the state receives a payment from the tribe of at least $100 million annually. This casino, Foxwoods, is now one of the largest casinos in the Western hemisphere.
Indian Casino Gaming Has Become Widespread. The spread of casino gaming into states where it is generally not legal was an unforeseen result of the compact process.28 In Minnesota, the federal mediator concluded that since Minnesota allows private social games such as blackjack and poker in private citizen's homes, the tribes could do these things in casinos.
Significant Indian Gaming Cases
State of California v. Harold Monteau. This case has been brought by the state against the National Indian Gaming Commission to compel them to shut down slot machines at tribal casinos. The state lost its case at the District Court in December 1996. The state is considering an appeal.
Seminole v. State of Florida. In this case, the Supreme Court held that the Indian tribes cannot sue states under the Indian Gaming Regulatory Act in federal courts without state permission. In other words the tribes cannot force states to negotiate gaming compacts. The decision was based on the 11th Amendment to the Constitution which provides that a state can only be sued in its own courts or if it consents to the suit. Basically states have a sovereign immunity from lawsuits filed in federal courts and Congress cannot abridge that immunity through passage of the Indian Gaming Regulatory Act.
Rumsey Indian Rancheria of Wintun Indians v. Wilson. The basic issue in this case is whether the tribe can have slot machines because the lottery operates similar games. This case was decided for the tribe, but appealed to the Ninth Circuit Court of Appeals. The Ninth Circuit held for the state and decided that Indian tribes cannot offer banked games such as slots.
Western Telcon v. California State Lottery. This case was decided by the California Supreme Court on June 24, 1996. The court held that the lottery's electronic keno game was not a lawful lottery game, but an illegal banked game that is prohibited in California. Hence the state lost the case although the ruling is favorable to the state's position in negotiating with Indian tribes. In non-banked games, including the lottery, the house collects a flat percentage. With a banked game the house is betting against the players and has a stake in the outcome. Although not strictly an Indian gaming case, it has ramifications over what is legal in California, hence what the tribes can operate
Sycuan Band of Mission Indians v. Roach. In this case, the court held that the State has no authority to prosecute tribe's employees for conducting tribal gaming.
Indeed the act has been so successful in promoting Indian gaming that one observer noted:
"The IGRA may fairly be said to be the first Indian victory since the Little Bighorn."29
When the States and Tribes Cooperate, States Have Been Able to Gain Some Concessions. For example, in Minnesota the 11 tribes that have entered into compacts have agreed to limit table games to blackjack. Minnesota also uses the compacts to get Indian tribes to set minimum gambling ages. As noted before, Connecticut ended up with a share of the slot machine revenues. The governor of Kansas was anxious to sign a compact and upset that the Legislature prevented him from doing that. He was concerned that without the compact, the state will have no regulatory say over Indian gaming.30 Among the conditions negotiated in the compact were state inspections, background checks and an agreement to create a state gaming commission that would oversee Indian gaming. The tribes even agreed not to offer games that compete with the lottery.
The Kansas can highlights a key case in the compact process. Some observers see the negotiations to be a legislative action, hence the Governor cannot unilaterally negotiate. A decision by the New Mexican Supreme Court supported this notion.
California Has Been Locked in Litigation With the Tribes. At issue is whether or not the lottery games are the same as slot machines. Despite the litigation and controversy about slot machines, there are over 12,000 slot machines in Indian casinos in California. Although the state argues that they are illegal, and that position has been upheld in the court, federal law prevents the state from acting to have them removed. Only the U.S. Attorney can act, but there has been no action pending resolution of the cases. The U.S. Attorney General has sent letters to the U.S. Attorneys encouraging a review of Indian gaming and direction to terminate any illegal gaming. The reluctance of the U.S. Attorneys to act may be explained by waiting for pending court cases to be resolved and their experience in other states where the U.S. Attorney acted against Indian casinos only to have the states reverse themselves and agree to allow slots.
If the Goal of IGRA Was to Promote Indian Gaming, it Has Been Widely Successful. As noted in the first sentences in this section, Indian gaming has become a multibillion dollar industry. Over one-half of the reservations in the country offer some kind of gaming. Fifty-nine casinos have been opened, with several more in the construction process.31 Of the 550 recognized tribes, 109 have entered into high stakes gaming compacts in 20 states. Gaming operations range from huge casinos that rival or exceed any in the world to small bingo halls.
The following chart shows the growth of Indian gaming using the handle as the form of measurement. Some states in particular have seen dramatic growth. Minnesota has 17 tribal casinos, and Wisconsin has 11. One writer suggested that Minnesota is now the land of 12,000 slots.32
Direction of Indian Gaming in California is Uncertain. The reason is the state's loss in the Western Telcon case. (See the Box on Major Court Cases, p. IV-7.) The case outlawed the lottery's electronic keno and definitely states that the Lottery cannot have banked games. Traditional slots are banked games. Maintaining the continued level of success in Indian gaming will require the alteration of traditional slots into non-banked lottery games, where the payout is dependent on the number of players and the house takes a cut based on the number of players, not the outcome of the game. In addition, they cannot use anything that would fall under the very broad definition of slot machines under California law. Arguments exist over how easy it is to make this change.33
After paying all costs, including management fees, wages, and winnings, the profits from Indian gaming accrue to the tribe for distribution. Consistent with the IGRA, tribes can make per capita distribution. Although the amount of money the tribes have earned varies, a significant share is going into service for members of the tribes. Indian gaming has slowed the migratory trend of Indians moving from the reservation to urban areas and has even reversed some of the migration.34 Some tribes have made direct payments to tribe members. The practice of direct payments alarm some people, for fear that the money will not be invested to improve the Indian's welfare. The evidence from earlier payments for land sales showed that they tended to be spent on consumer goods and were not invested.35 This concern over how payments are spent is heightened because of the unsure future of Indian gaming.
Another issue is the sheer size of the payments. The Mdewakanton who operate a lucrative casino have distributed sixty-five percent of their net profit to 100 members. Reportedly, payments exceeded over $500,000 each.36 Other tribes invest their funds, replacing housing, protecting areas of cultural significance, and building schools. Some small tribes in California have significant gaming operations.
Arguments Exist Over the Adequacy of Regulation of Indian Games. The IGRA also established a National Indian Gaming Commission made up of three administration appointments. The Commission is charged with the oversight of Class II games.
Tribal representatives strenuously argue that the regulation of gaming is adequate. They point out that because the profits accrue to them, they have every incentive to make sure that there are not diversions either from crooked players or employees. Others offer far different conclusions.37 Other states have not agreed with the tribes and have increased their regulatory presence through the compact process.
In early October, the Senate Indian Affairs Committee held a hearing on oversight of Indian gaming. A Justice Department witness urged Congress to adopt standards because in some instances neither the state or the tribe would develop adequate regulatory standards.38
States Unable to Tax Indian Gaming. States get some tax revenues from Indian gaming. Most casino workers are not Indian nor reservation residents, hence their income stream is taxable by the state.39 Whether that represents a new income stream for states to tax is discussed in the social-economic impacts section.
The states have also used tribal gaming as a way to influence their relations with neighbors. New York threatened to legalized high stakes Indian gambling which would have competed with Atlantic City should New Jersey lure the New York Yankees away from New York.
Pacts between cash-strapped state governments and the tribes have a great deal of appeal to some states. Massachusetts Governor William Weld and the Wampanoag tribe are trying to negotiate a pact to allow casino gaming. As a condition, the state would get $90 million per year and the revenues would be shared with affected cities and towns. Detroit would like to lure a Chippewa Indian casino to downtown Detroit.40 In a different twist on revenue sharing, Washington tribes sponsored initiative 651 that would give each registered voter a share of slot machine profits. The state was given no enforcement power. The measure was soundly defeated.
Reservation Neighbors Often Unhappy Over Indian Casinos. Not surprisingly, the settled areas near reservations and rancherias complain about the Indian gaming facilities. These are usually rural areas and the people fear an onslaught of traffic and other urban ailments. The efforts by tribal members to open a casino in El Dorado County, is an example of the controversy that can occur.
Conversely, the tribes will argue that they can be a positive influence. Because of the improvement in their fiscal status, they can pay for services that weren't previously available in rural areas such as increased sheriff's patrol, and fire and ambulance revenues.
Some Disputes Exists Between Indian and Private Gaming Interests. There was resistance and opposition to Indian gaming by most of the established Nevada and Atlantic City gaming interests. Harrah's at one time withdrew from the Nevada Resort Association because of the Association's opposition to Indian Gaming. Public corporations involved in casinos have changed their views as they have seen the business opportunities associated with managing Indian casinos. They see Indian gaming as a way to open casinos in states that are traditionally opposed to gambling.41
Relations between the tribe and their management contractor is not always amicable. For example Gaming World International was recently dismissed from its management contract with an Indian casino in Minnesota. The Tribal Council accused the company of gross mismanagement and misappropriating tribal funds. The company denies the accusations and says that it has been caught up in the tribe's problems. The former chairman was convicted of embezzling and conspiracy in charges related to bid-rigging when the casino was constructed. Two other tribal council members were also convicted.
Another interesting development is the widening conflict between Indian and non-Indian gaming. In New Jersey, an Oklahoma tribe wants to open a tribal casino near Atlantic City. These are Indians that were forced to move from New Jersey more than a century ago. Another interesting development is a national lottery proposed by the Coeur D'Alene Indian tribe in Idaho. That lottery would be available in all states that have a lottery, including California. The tribe has had difficulty in obtaining a long-distance carrier for the 800 number. The carriers have been threatened with criminal action by various states Attorney Generals. The matter is currently in litigation in the Coeur D'Alene tribal court.
There is, however, little direct competition between Indian and Nevada gaming in the sense that they don't own and operate casinos in the same geographic areas. The first Indian casino is opening in Nevada, but it is completely state regulated so it is not tribal gaming in the usual sense.
Not surprisingly given the number of tribes, Indian gaming is beginning to have its own conflicts. Tribes in Wisconsin and Minnesota opposed a new facility to be run by Chippewas for fear it would encroach on the existing gaming operations of other tribes.42 In California, Torres-Martinez Indians would receive funds to settle a 71-year old dispute over the loss of their lands when the Salton Sea was created by a dam break. The tribe plans to purchase new land for a casino, a move opposed by the Cabezon band, who are concerned about competition.
California Has a Large Number of Reservations. Within the state, there are 104 reservations with 32,000 members, of which 12,500 live on the reservation or rancheria. California has about 12 percent of the Native Americans counted during the 1990 census. They are only 0.8 percent of California's population, about equal to the nation's share of Native Americans. The vast majority in California do not live on the reservation.
Source: Sacramento Bee
Note: The above map shows Indian Casinos in California. There is disagreement in the accuracy of this map. No inventory of sites exist and tribes cannot be easily contacted for information as many are quite small.
Source: Sacramento Bee
Note: The above map shows Indian Casinos in California. There is disagreement in the accuracy of this map. No inventory of sites exist and tribes cannot be easily contacted for information as many are quite small.
The majority of people living on reservations and trust land in California did not identify themselves as American Indians in the 1990 census. Tribal membership is determined by individual tribes, and is frequently based on some minimum blood requirement and/or descent from a historical list of tribal members. Some tribes also have residency or participation requirements. The population of the tribes planning or operating in gaming facilities is small, ranging from one (The Buena Vista Rancheria of the Me-Wuk Indians) to over 4,000 (the Hoopa Valley Tribe). Eleven of the 35 gaming tribes have fewer than 100 members.
Number of Recognized Indian Tribes Could Grow. Recognition petitions allow groups of Indians to become recognized as tribes. Historically, there was not a lot of concern about these petitions. Now the possibility of expanding the size of the gaming industry has increased the controversy surrounding the petitions. Within California, 37 tribes have pending petitions for recognition, 14 of these were filed after the passage of IGRA. Some of the tribes are seeking land in the most populous areas of the state. Nationwide, 165 tribes have petitions pending, some dating back to 1826. Only nine have been recognized by the Bureau of Indian Affairs and an additional seven have been restored or recognized by Congress. Another 109 tribes, including 41 in California, were once recognized but were later terminated during a time of a federal policy for assimilation.43 These tribes can petition to be restored.
These tribes have a great deal of flexibility acquiring a land base without state approval. A restored tribe in Sonoma County tried to build a casino in Santa Rosa with the backing of Japanese investors.44 The deal eventually fell apart. The Mohegans in Connecticut bought land and had it approved as trust land by the Bureau of Indian Affairs (BIA). They obtained financing for a casino project with $175 million in privately placed bonds, becoming the first tribe to get capital financing from Wall Street. Part of the settlement was that the tribe drop land claims to over 20,000 acres in return for being allowed to purchase the land for the casino.
There are at least two imminent possibilities for restored tribes to obtain land near urban areas in California. One is the Auburn rancheria. In 1994, Congress passed and President Clinton signed a bill restoring the United Auburn Indian Rancheria to federally recognized tribal status. Another band, the Mechoopda Band of Maidu is trying to buy 240 acres of land in Sutter County and declare it sovereign territory and establish a casino. The members of this tribe gave up their status as a tribe. However, the federal government did not live up to the commitment it made to provide financial help to the tribe, which played a role in band members losing the land they were granted as individuals. As a result, they sued and won a ruling reinstating them as a tribe, but they had already lost their tribal lands. The settlement allowed the tribes to acquire land anywhere in California and have it be placed in trust. The tribe is being bankrolled by Showboat Casino of Nevada.
Normally, tribes can only use land off the reservation for gaming with the approval of the Secretary of the Interior in consultation with the local community or consent must be given by the Governor to gamble on the lands. Some Native Americans have had success operating bingo and casino halls off the reservation. The Potawatomi Tribe gained permission to operate a bingo and casino hall in Milwaukee, 200 miles south of their reservation. Such movements concern law enforcement officials. Some officials currently view Indian gaming as being more difficult for organized crime to infiltrate because of its isolated gaming centers, hence the move to urban areas could make this more of a problem.45 (See the discussion in the crime section.)
Some Non-gaming Tribes Criticize Gaming Tribes. Criticism of the present structure of Indian gaming has come from an unexpected source, other Indians.46 From the numbers presented in this section, it is clear that only a minority of tribes are involved in gaming. Of those, only a minority are doing what a Department of Interior official terms as "Fairly well."47 Some tribes, because of the isolation of their reservation, are unlikely to ever benefit. These include some of the largest tribes in America. Some advocates suggest a method for pooling gaming profits to help tribes that are poorer.
There are also factions within tribes, so-called "traditionalists," that object to gaming. These differences have led to significant disputes. Approximately 25 reservations nationwide are being torn up by these problems.48
Overall Impact of Indian Gaming is Still Uncertain. It is very difficult to say with authority what the social-economic impact of Indian gaming has been. Of interest to most observers are the following questions:
Definitive answers to these questions do not yet exist. Research has been hampered by several factors:
There have been several reports that have been quite laudatory, but they have been commissioned by the tribes. These are discussed more in the economic section.
Indian Gaming Has Appeared to Lead to Greater Political Involvement by Tribal Members. New Mexico is another state where Indian gaming has become a major political issue. The then incumbent Governor would not sign compacts with the tribes. As a result, the gaming tribes mobilized and donated funds to his opponent, who eventually won the election. Native American turnout in the election was somewhat higher than in past elections. Native Americans have historically exhibited low levels of voter turnout even when compared to other ethnic minorities.49
State Fears on Crime Are Not Groundless. In October 1995, gunfights broke out in the Elem Indian colony in Lake County over control of the tribe's casino. Seven people were wounded. This event prompted the Attorney General Dan Lungren to convene a formal briefing on enforcing laws on tribal reservations and rancherias. Similar conflicts have occurred in other states.
Another question, to what extent is organized crime a threat? Donald Trump has testified before Congress that organized crime is rampant in Indian gaming.50 At the same hearing, the FBI, the Department of Justice, and the Internal Revenue Service testified that they had no evidence of widespread organized crime within Indian gaming. Critics say that their statement is evidence of how loosely they regulate and oversee Indian gaming. Senate supporters of Indian Gaming, Senators McCain and Evans, both concluded that the concern about organized crime was a smokescreen for concerns about economic competition.51 Others look at some of the unsavory business connections that have been established by the tribes and suggest that a problem of "disorganized" crime is much more of a problem.52
Another concern about Indian gaming is that it leads to the legalization of other kinds of gambling, although opinions are split.53 There are a lot of opinions on this issue, but few conclusions. Some argue that Indian gaming has led to increased legalization of other gaming by states. Others argue that other gaming would have been legalized anyway to gain money, stimulate the economy, and create jobs. Some people think it has helped destination gaming, such as Nevada, as people get a taste for gambling, they are more likely to opt for a gambling destination vacation.
Another criticism that has been leveled is over the low number of Native Americans that are employed in gaming. The low employment may be good or bad depending on who is looking at the situation. If the employees are not Native Americans living on the reservation, then state and local governments should get more tax revenues. Many of the tribes are so small that they can not supply a sufficient number of employees. The lack of experience is being remedied to some degree by education and training. DQU (Deganawidah-Quetzalcoatl University), an Indian college near Davis, is offering a course of studies in Indian Gaming.54
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