Native American Gaming

The impact of Native American Gaming varies by tribe and location. In the 1970s, various tribes took unprecedented action to initiate gaming enterprises. In doing so, they created not only a series of legal struggles between the federal, state, and tribal governments but also a groundbreaking way to revitalize the Native American economy.

Native American gaming has grown from bingo parlors to high stakes gaming and is surrounded by controversy on many different levels. There are disputes concerning tribal sovereignty, negative effects of gaming, and a loss of Native American culture. In the US the ‘Indian Gaming Regulatory Act’ (IGRA) was passed in 1988 in order to secure collaboration between the states and tribes and also in order for the federal government to oversee gaming operations.

Gaming can be extremely successful because it stimulates the economy, increases tourism to reservations, reduces unemployment, raises incomes, and increases tribal independence while reducing dependence upon welfare. Tribes in only 30 states are eligible to operate gaming enterprises because 16 states have no federally recognized tribes, and four states (Massachusetts, Missouri, Rhode Island, and Utah) prohibit Native American gaming. 224 of the 550 tribes in 28 states operate the 350 Native American gaming enterprises nationwide, and 68% of Native Americans belong to a tribe with gaming operations; these enterprises earned $19.4 billion dollars in 2005 (a quarter of the nation’s total gaming revenue that year). In addition, Native American gaming is the source of 400,000 jobs, and the profits from the enterprises often go toward programs that create jobs. For example, 75% of the profit generated by Cherokee Nation Enterprises in 2005 was given to the Jobs Growth Fund (funds new Cherokee businesses).

Revenues, by law, must go toward improving reservation communities. IGRA requires that revenues go toward: tribal government operations, promotion of the welfare of the tribe and its citizens, economic development, support of charitable organizations, and compensation to local non-Native governments for support of services provided by those governments. Tribes have boosted their socioeconomic status in the past several years by improving their infrastructure, but due to the lack of federal and state funding, have only been able to do so as a result of gaming enterprises. For instance, tribes often build casino-related facilities that draw visitors such as hotels, conference centers, entertainment venues, golf courses, and RV parks. Once a reservation has established a strong economic foundation, it can draw in businesses that are unrelated to gaming. A common trend is that casinos stimulate the economy, and other business sustain it.

For instance, the San Manuel Band of Mission Indians built in a water bottling plant on the reservation and, along with three other tribes, invested in a hotel in Washington, D.C. The Winnebago Tribe of Nebraska are involved in a number of businesses; some of which are Internet media, home manufacturing, used autos, and gas stations. The Morongo Band of Mission Indians, a small band in California, has opened a Shell station, A&W drive-in, Coco’s Restaurant, a water bottling plant, and a fruit orchard operation. In addition to involvement in private corporations, Native nations have enough sustainability to bolster government programs. Some of these projects include, but are not limited to: providing law enforcement, fire fighters, schools, translators for emergency response, college scholarships, assistance with mortgage down payments, protection for endangered species, water quality monitoring, eldercare, foster care, and health clinics.

Tribes sometimes distribute funds on a per capita basis in order to directly benefit its citizens. Because ‘per caps’ have sometimes shown negative effects such as a dependence on tribal government, low attendance in school, and an unwillingness to work, some tribes have experimented with decreasing per caps as punishment. The Fort McDowell Yavapai Nation Tribal Council deducted at least $100 from families’ per caps with children with low school attendance. This ordinance resulted in a 30% increase in graduation rates in just 3 years, a substantial increase. Furthermore, the Las Vegas Paiute Nation deducts funding for jail from the offender’s per capita because the Nation itself does not have a jail and must rent it from other governments. Punishments such as these provide an incentive for morality as well as financial assistance from the per caps themselves.

States also benefit from Native American gaming enterprises. States cannot tax reservations, but they can, under IGRA, negotiate a compact and demand compact payments. Tribes usually pay approximately or less than 10% of profits to states in order to compensate for use of state resources. It is estimated that the state of Michigan earned $325 million from tribes in 1993-2003. It is required by law for a tribe to agree to a state compact if they request one, but the IGRA says nothing about local governments. However, many tribes do negotiate with local governments. They place a strain on traffic and emergency services, and it is not uncommon to compensate for that. Native Americans pay $50 million annually to local governments. In addition, non-Natives hold 75% of the 300,000 jobs that belong to Native American gaming.

There have been many past attempts to revitalize Native American economies, but most of them have failed. Two of the more successful ventures, besides gaming, include selling gasoline and cigarettes for a much lower price than can be found off the reservation. Tribes are able to sell cheaper goods because there is no state tax. Lower prices draw in non-Natives from off-reservation sites, and tribes are able to earn a considerable profit. Seminole annual income grew from $600,000 in 1968 to $4.5 million in 1977. Smokeshops account for most of this substantial increase. Less effective efforts by the Seminole Nation to boost the economy include cattle raising, craft selling, and alligator wrestling. Cattle operations are popular among the Seminole tribe: with their 7,000 head herd, Seminoles are the largest cattle operators in the state of Florida and the twelfth largest in the United States. However, cattle operations are not overwhelmingly successful because they have been known to benefit the individual rather than the tribe. In addition, cattle operations led to government dependency and debt. Another economic endeavor is craft sales. Some individuals create traditional Seminole crafts and sell them, but this market does not leave a huge impact on the tribal economy. Instead, it benefits the individual as a supplementary income. Alligator wrestling originated in the 1920s and became synonymous with Seminole culture. It has been denigrated as exploitative, though, and is quite risky. Consequently, alligator wrestling has become less prevalent with the growing popularity of Native American gaming.

Not all Native American casinos are successful; failure is often linked to poor geographic locations. The size of a tribe is usually insignificant. This argument follows the logic of a free market economy. Tribes with a strong economic base find it easier to draw in new businesses and consumers. Tribes in remote locations suffer because they lack a consumer base to support new and existing businesses. For example, the Morongo Band of Mission Indians is very small, but their gaming enterprises are overwhelmingly successful. In contrast, the Sioux Nation, a very large nation, has struggled to achieve success with gaming enterprises. Regardless of its thousands of members and approximately 12 gambling halls, the Sioux Nation is unable to benefit from gaming enterprises because it is too isolated from potential customers. Another example is found in San Diego County. Four tribes in San Diego County had ambitious plans for a $100 million-plus resort and convention center but preemptively scaled back this idea because they are in an inconvenient location. Far away from major cities and in close proximity to each other, the tribes concluded their chances of an overwhelming success were slim.

The Pine Ridge Indian Reservation, the second largest reservation in the United States, suffers from extreme poverty. It is the poorest county in the United States and has attempted to revitalize its economy through the gambling industry. However, these attempts have failed. Its casino created a mere 80 jobs, but this figure is insignificant since the unemployment rate on the reservation is up to 95%. The reservation has higher unemployment, diabetes, infant mortality, teen suicide, dropout, and alcoholism rates than the country on a whole. Many homes are dilapidated, overcrowded, and without water, plumbing, and electricity. Pine Ridge’s failed attempts are predictable considering the closest major city, Denver, is 350 miles away.

With Native American gaming has come the image of a ‘rich Indian.’ This depiction contrasts other images of Native Americans portrayed as savage, pure, connected to nature, and spiritual. The reality (that some Native Americans are powerful entrepreneurs) contradicts the notion of what a Native American is ‘supposed to be.’ ‘Rich Indian’ propaganda even circulated in response to Proposition 5 in California in 1998 (which gave permission to tribes to install slot machines on their reservations) that perpetuated the stereotype that ‘the only good Indian is a poor Indian.’

Society has come to believe that this is a loss of culture; however, it is merely a loss of a cultural myth. Those ideas are based on stereotypes and are ‘construed by the dominant society in an effort to control and justify the enduring inequalities and injustices that permeate our legal system and social landscape.’ It seems contradictory to imagine a Native American running a casino and dealing with the government, but it is vital to understand that those portrayals of Native Americans are cultural myths. Moreover, it is important to understand the power a cultural myth can have. Canadian author Ronald Wright describes the importance of cultural myths: ‘Myths create and reinforce archetypes so taken for granted, so seemingly axiomatic, that they go unchallenged. Myths are so fraught with meaning that we live and die by them. They are maps by which cultures navigate through time.’

Therefore, Native American gaming is not so much damaging Native culture as it is merely changing a cultural myth, the way the general population perceives Native Americans. Additionally, Native American gaming can be viewed as a means to rejuvenate and preserve tribal culture. For instance, many tribes use revenues generated from gaming toward museums and cultural centers. Tribes are not only able to fund themselves independently but can also afford to preserve their individual histories.

There is some controversy of Native American gambling because it is argued that it contributes to a moral decay. Gambling, it is argued, promotes crime and pathological behavior. Gambling addictions as well as drug and alcohol abuse are sometimes associated with Native American gaming. Gaming has boomed in the past 50 years, so some of this criticism is justifiable. In 1962, the estimated sums in the United States totaled $2 billion. This figure jumped to $18 billion in 1976, to $80 billion in 1985, and to $400 billion in 1993. In 2000, the total estimated sums wagered in the United States was $866 billion. In 2000, the commercial take was 10%, so the gaming industry earned approximately $70 billion. Compared to the total revenues generated by all other forms of entertainment combined: tickets to movies, plays, concerts, performances, and sports events; which earned only $22 billion, the revenues generated by gambling is astounding. In other words, gambling makes thrice that of all other entertainment forms combined. This figure takes into account the fact that gamblers win some money back. Based on these figures and the arguments that gambling promotes immorality, it is evident that gambling can be a problem. However, to blame Native American gaming for these problems merely makes Native Americans a scapegoat. Gaming enterprises, over time, have shown to be the most effective mode to build tribal economies and independence. Moreover, Native American gaming contributes to only a fraction of gambling in the United States. Native American casinos bring in only 17% of gambling revenue, while non-Native casinos raise 43%.

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