September 29, 2004, 8:46 a.m.
Unintended Consequences
A damaging casino culture.

By Gary Bauer

Last week marked the historic opening of a museum on the national mall celebrating the diverse and deep culture of American Indian tribes. This recognition — in our nation's capital — of the first Americans corrects a glaring omission, and was long overdue. But the beauty of the new National Museum of the American Indian and all of its contents cannot conceal the appalling quality of life (or lack thereof) that continues to confront many Native Americans in this country.

Sixteen years ago, the U.S. Congress — armed with good intentions — passed the Indian Gaming Regulatory Act (IGRA), a law meant to spur economic opportunity and growth on poverty-stricken and remote Indian reservations. It was a law crafted to redress a history of indifference to the needs of generations of Native Americans who had lived without basic necessities, from health care to education to job opportunities.

The aim of IGRA was Indian empowerment, but the effort has badly missed its mark. IGRA has failed, and today, it might as well be renamed the "Law of Unintended Consequences."

Many of those who were meant to benefit from IGRA have not, and a shocking array of unintended beneficiaries have laid claim to the spoils of the system. More than a decade after the passage of IGRA, nearly a third of all Native American families with children live in poverty. The high-school dropout rate on reservations is more than three times the national average; the suicide rate is four times greater; and one in four Indians is an alcoholic by the age of 17.

Under IGRA, 224 tribes now operate 354 full-blown casinos in 30 states. The two biggest casinos in the world, Mohegan Sun and Foxwoods, in Connecticut, were both spawned by IGRA. This mushrooming of tribal gambling threatens to cast the United States as a "casino country," itself a far cry from the 1988 congressional vote many members believed was authorizing bingo parlors on remote tribal lands. Instead, the aggressive push to bring Indian "reservations" to heavily populated urban centers means that these gambling establishments will stand shoulder to shoulder with mainstream cultural destinations in our major cities. Slowly but surely, control over legalized gambling in this country is being handed over to tribes: In 23 states, tribes hold monopolies on Las Vegas-style casinos with slot machines and table games such as blackjack and roulette. Non-Indians are strictly prohibited from offering the same games. Of course, I oppose the spread of casino gambling under any sponsorship.

The U.S. Supreme Court this month has an opportunity to finally put a stop to this particular unintended consequence, when it considers a case that asks: Is it a violation of the Constitution for states to grant race-exclusive industry monopolies to Indian tribes?

The petition to the high court was filed by four card clubs and two charities in the San Francisco Bay area — operations that stand to be driven out of business by a nine-acre urban "reservation" conveniently created for an Indian tribe and its investors just off a major interstate near San Francisco.

Many people, including the U.S. Congress and Supreme Court who helped effectuate IGRA in 1988, might be shocked to see that the financial "winners" from Indian gambling include very few Indians. Rather, the "winners" are oftentimes savvy, non-Indian investors, large public casino-operating companies that manage operations for the tribes, and a handful of very wealthy Indians who are aggressively working to exclude other tribes from the action.

Take, for example, the case of Foxwoods. Chinese-Malaysian businessman Lim Goh Tong, who provided the up-front money to get the nation's largest casino started, will reportedly make at least a billion dollars over the life of his agreement with the Pequot Indians who are licensed to have the facility.

The windfall for these types of investors is the rule, not the exception, under IGRA. And what of the Indians who were intended to benefit from this system?

The bottom line is that while a small handful of tribes profit, others live in increasingly dire poverty. Exhibit A: The Oglala Sioux reservation in Pine Ridge, South Dakota, where unemployment in recent years has approached close to 90 percent and the school dropout rate is nearly 50 percent. Even with the Oglalas' Prairie Wind casino, the profits of which are supposed to support elderly and youth services, many tribe members endure cramped and squalid living conditions.

Apart from the Oglala example, on reservations across the country, unemployment hovers around 50 percent. And slightly more than 30 percent of working-age Indians in the U.S. are employed but living below the poverty line. Cronyism and corruption flourish on reservations where casino gambling has taken root, and the dreams of true economic and entrepreneurial opportunity have drifted away. The national poverty rate was 11.6 percent between 1999 and 2001; the poverty rate for residents of reservations, however, is 31.2 percent, and the national poverty rate for Native Americans is 24.5 percent.

Indians who speak out against the "casino culture" are intimidated, harassed, and even threatened. One member of the San Carlos Apache tribe in Arizona was ousted from the tribal council after her testimony of corruption led to the imprisonment of a former tribal leader involved with the casino. Other Indians boycotted her business and she received death threats.

According to a 2002 Time magazine report, casinos in the state of Connecticut, which is home to 0.1 percent of the U.S. Indian population, produced 15 percent of Indian gambling proceeds. Oklahoma, by contrast, is home to 35 percent of the U.S. Indian population, but, at the time of the 2002 report, was the source of only 2 percent of Indian gambling proceeds.

In other words, monetary benefits for Native Americans have been limited to only a few. In addition, David Yeagley of the University of Oklahoma, himself a Concoche Indian, points out that the idea of "money without labor is the fundamental flaw in the whole concept of the benefits that the gaming industry brings to Indian Country."

Indian gambling is not a case of a rising tide lifting all ships. It is a case of the undertow of greed washing the dreams and hopes of the truly needy back out to sea. In the name of fairness for both Indians and non-Indians, the time has come to draw the line on tribal gambling. We must look to the U.S. Supreme Court to rethink IGRA, and in so doing, restore fairness and sanity to a system that relies heavily on race-based quotas and phony presumptions — a system that has led to an explosion in tribal gambling, headed to a neighborhood near you.

— Gary Bauer is the president of American Values.

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