Gambling Dirty Secrets – Indian Casino Gambling

This letter would not be complete without focusing momentarily on the fastest-growing segment of the entire gambling industry casinos operated by Indian tribes. There are nearly 300 tribal gambling operations scattered across the country,38 earning an estimated $7 billion in annual revenues.39 Many Americans are reluctant to criticize any aspect of these casinos, because of the disadvantaged status of many Indian tribes. Yet there are some disturbing facts that are crucial to understanding this phenomenon. According to Forbes magazine, “Except for a few hundred people, many of whom boast only a trace of Indian blood, most American Indians haven’t gained a penny [from casinos].”40 The Minneapolis Star Tribune reported that unemployment among Indians in that state remains above 50 percent, about the same as before the state’s 17 Indian-owned casinos arrived.41 Among some tribes in South Dakota, unemployment has actually increased since the opening of casinos!42
A few Indian casinos are enormously lucrative, like the billion-dollar-a-year Foxwoods run by the tiny Mashantucket Pequot tribe in Connecticut. With only 550 members, that’s nearly $2 million in annual revenues for each Pequot!43 The profitability of such casinos has sent thousands of Americans scurrying through their ancestral records looking for any trace of Indian blood. The Associated Press reports that “being Indian has never been so popular,” noting that the number of people identifying themselves as Indians has tripled since 1970. The Mashantucket tribe receives 50 calls per month from wanna-be Pequots; some can’t even pronounce the tribe’s name.44 None of the current Pequot tribal members reportedly has more than one-eighth Pequot blood.45 In many cases, Indian tribes are nothing but a front for Las Vegas gambling interests looking to enter new markets, knowing they can pocket up to 40 percent of Indian casino profits via “management contracts.”46 One city in Illinois tried a unique approach. It hired a Nevada company to recruit an entire Indian tribe in order to open a land-based casino.47 The rationale behind Indian casinos is that they enable tribes to gain economic self-sufficiency.
Yet even tribes that have struck it rich with casinos continue to receive hefty federal subsidies. How’s this for outrageous exploitation of the taxpayer? The Pequots, sitting on a billion dollars in revenues per year, were granted $1.5 million in low-income housing assistance in 1996. The Tulalip Indians in Washington State (estimated annual casino revenues of $30 million48) used federal low-income housing grants to build themselves $300,000 luxury homes. A tribe in Minnesota refused to dip into its casino-generated $30 million bank account to fix a school with a leaky roof and insulation bulging out of gashes in the wall, preferring to wait several years until the federal government could make the repairs.49 Yet there is no initiative in Washington to review the support given to these and other wealthy tribes. Why not, we wonder. Like their Las Vegas counterparts, Indian casinos have quickly become major players in Washington. Tribes spent at least $5 million lobbying Congress and the White House in 1997.50 California tribes poured some $70 million which they earned from operating casinos illegally into a successful referendum legalizing casinos, then coughed up another $4 million to gambling-friendly politicians last year. The new governor, Gray Davis, raked in more than $750,000. “It’s blown the doors off everything we’ve ever seen in the state,” said a spokesman for retiring Gov. Pete Wilson.
Indian casinos have a couple of key advantages over commercial operations. Because tribes are sovereign nations, they pay no federal or state taxes. When a tribe gets into the gambling business, neighboring communities are usually left to foot the bill for the increased crime, traffic and other headaches that accompany casinos. Indian casinos in general also face much less stringent regulation. It is clear that, just as lotteries and commercial casinos exploit the most vulnerable, Indian gambling advocates are laying a trap for many of their own tribal members. The high rate of alcohol and drug abuse on Indian reservations is well-documented. New studies now show that gambling addiction rates are at least twice as high among Indians compared to the rest of the population.