Midwest Today, January 1995

1. Against If U Have A Slot Machine Donation Business Gambling Winnings
2. Against If U Have A Slot Machine Donation Business Gambling Money
3. Against If U Have A Slot Machine Donation Business Gambling Machines

Texas Definition of Gambling. Texas defines a bet as agreeing to win or lose something of value based solely or partially on chance. This encompasses many different forms of gambling including cards, table games, betting on sports games, horse and dog races, slot machines, lottery, and scratch tickets. International Game Technology, which, as the world’s largest manufacturer of slot machines, has made many of the 900,000-plus slot machines in the U.S., earned $2.1 billion in revenues in fiscal.

Indian gaming is not such a sure bet;
despite its success, opposition abounds

Tim Giago, Publisher and Editor-in-chief of the Indian CountyToday newspaper in Rapid City, S.D., talks reflectively aboutwhat he calls the 'casino culture.'

He observes that 'Many years ago, when I worked as a 'keyman'at Harrah's Casino in Reno, NV., while attending school there,I never dreamed that huge, Reno-like casinos would eventuallybecome a part of the landscape on Indian reservations.

'It is almost scary to see this culture invading the quiet,peaceful lands of the Indian reservations.'

Giago admits he has mixed emotions about it.

Rick Hill, a Wisconsin Oneida Indian who is chairman of theNational Indian Gaming Association (NIGA), puts it bluntly: 'Thetribes don't have any money unless we do gaming, because we don'thave a tax base. We have lived in Third World poverty conditions,but gaming has proven to be mutually beneficial to state and tribalgovernments.'

Some tribes have had a lot of luck with gambling. Others haverolled snake eyes.

The message from the tribes is that they want jobs, not welfare.A Harris Poll showed that 70% of Americans support Indian gaming.

Some tribes are using their casino profits to establish collegescholarships for their young people, to construct health clinicsand hospitals, build new schools and day-care centers, open hotels,restaurants, gas stations, and flower shops; to fund retirementprograms for their tribal elders, and to make long-term investmentsin hydroelectric as well as manufacturing plants.

But others are not planning for their future. They're takingtoday's profits and squandering them. There are also questionsabout where some of the money is going. Statistically speaking,only a small percentage of American Indians derive direct benefitfrom the operation of the casinos.

'Instead of giving tribal members per capita monthly payments,Indian tribes could be using gaming profits to purchase more landand expand their reservation base,' Tim Giago believes. 'Theycould put the money into long-term investments.. Some are doingthis; many are not.'

Giago also worries that in some cases, 'the few real Indians.. have allowed [outside] casino managers to take control ..to desecrate and insult the religious practices, traditions andculture of other Indian tribes.'

Along with the salvation afforded American Indians by the arrivalof the 'new buffalo,' gaming is a two-edged sword.

From a single bingo hall in Florida about 15 years ago, Indiangambling has exploded to more than 89 casinos and 170 high-stakesbingo games in 24 states, with more opening almost every month.

Half of the nation's 318 federally recognized tribes, witha total of 1.9 million members - are trying to get involved ingambling. To date, surprisingly few have benefited.

Indian gaming represents only about 5% of all gambling in theUnited States and only a third of tribes currently operate gamingfacilities. About 40% of gambling revenues come from state lotteriesand the remaining 55% is dominated by commercial entities in Nevadaand New Jersey.

While some tribes have earned millions, others remain miredin poverty. The problems of the Indian reservations include a24% poverty rate, a suicide rate more than twice that of all othernonwhites, and the highest high school dropout rate among allnon-whites. Many Indians live on remote lands with no resources.The federal government has reduced economic assistance by two-thirdsover the last 15 years. Unemployment still averages 45%.

Jim Northrup, a member of the Fond du Lac band of Lake SuperiorChippewa wants people to know that 'most tribal councilsdo not share the profits with the [tribal members]. There area few exceptions. [But] it is creating a class society becausenot all members get to share in the profits. Only a small fractionof Indian people actually get money from gambling. Here at Fonddu Lac, we get a ham.'

Charles Keechi, chairman of the Delaware Nation and formerhead of the NIGA, said 'People think all the Indian tribesare getting rich on high-stakes bingo, but here in Oklahoma we'rejust a step above playing with corn or beads on a hard card.'

As CNN's Ann Blackman reported, 'Notwithstanding [the)spate of good publicity (and some modest but real political andfinancial gains), Native Americans are struggling with the wagesof survival. Once the only people on the North American continent,they have persevered as an ethnic minority only to face the classicminority dilemma of whether to assimilate or to affirm a separateidentity - and, if they choose the latter, they further face araft of federal definitions that can profoundly affect their commonwelfare.'

Indian tribes have existed as sovereign governments for Centuries.Some tribes, like the Sac and Fox of the Mississippi in Iowa,boast treaties entered into as far back as 1804, when Thomas Jeffersonwas President. Historically, however, state governments have beenhostile to the concept of recognizing and dealing with tribesas sovereign entities.

The most searing rebuke came in a 1953 Congressional policy,bluntly titled 'termination.' The Federal governmentsevered its legal obligations to 50 tribes and groups, and relocatedthousands of people from their reservations to nearby cities.Tribal protests in the 1960s and '70s brought about a reversalin government policy, and many Indians reclaimed their roots.

In the late 1980s, a sweet series of Indian triumphs had leftsome bitter aftertaste. Some recognized tribes won the right torun high-stakes gambling, regardless of prohibitions in borderingstates. The result is a handful became fabulously wealthy, andsome financial benefits started to accrue to impoverished reservations.But friction increased between recognized and unrecognized tribes.

Then there are problems which stem from ambiguities involvingthe muddled relationship between American Indians and the stateand federal governments. Specifically at issue is the interpretationof the Indian Regulatory and Gaming Act, implemented in 1988.

Writing in the St. Paul Pioneer Press, Julie Shortridgeraised some good questions:

• 'Why does [a] state have the right to negotiate away aspects of a federal treaty with a sovereign nation anyway?' she asked.
• 'If Indian tribes are independent nations unto themselves - separate to govern under their own laws; exempt from all local, state and federal regulations; and autonomous to negotiate treaties with the U.S. government - then why do Indians vote in U.S., local, state and federal elections?
• 'Were Indians sovereign when the treaties were drafted, but subject to U.S. authority now? Are the federal courts involved in making determinations about other U.S. treaties with foreign nations? Are Indians considered American citizens, citizens of a separate sovereign nation or dual-citizens? In what way is Native American sovereignty the same or different from the sovereignty of foreign countries, the powers of the commonwealth of Puerto Rico or those of U.S. states?'

She says she wishes people had 'the courage and depth'to discuss these questions. 'Obviously,' she concludes,'the relationship between states, the federal government,Native American tribes, treaties, property rights and resourcemanagement is not as clear-cut as some would suggest.'

Conflicts Over Sovereignty

Randy Brown of the Wichita Eagle observes 'Akey factor in dealing with Indian tribes is the phrase 'good-faithnegotiations.' A state doesn It have to accept just any deal,but should work with the Indians to make a reasonable deal.'

The process does not always go smoothly, to say the least.The Ponca Nation of White Eagle, OK., for example, has been unsuccessfulin its attempts to persuade Oklahoma officials to negotiate ingood faith a proposed expansion from bingo to casino gambling.Conditions on the reservation remain bleak. At a dusty crossroads,dirty children swing on clotheslines because there is no placeelse to play, intoxicated men loiter about, and stray dogs rummagethrough garbage.

Officials from four of South Dakota's nine Sioux tribes spokeat a hearing held last year by the U.S. House Native AmericanAffairs Subcommittee. They accused state officials of 'economicracism' in negotiating agreements for tribal casinos. Theycited as examples the fact that state officials limited each tribeto a maximum of 250 slot machines, no matter how large or howremote the tribes are.

Tuffy Lunderman, gaming liaison for the Rosebud Sioux Tribe,said 'The compact process in South Dakota is racist and reactiveand protects the state's video lottery system.'

Tribal officials said their experience in dealing with SouthDakota officials is so repellent that it convinced them that statesshould have no input in decisions on tribal facilities.

An amendment to the Indian Gaming Regulatory Act pending inCongress could eliminate a governor's veto authority over Indiangaming and instead only allow him to advise the Interior Department.

An attorney for the Cheyenne River Sioux tribe revealed thatstate officials had offered tribes the prospect of allowing moreslot machines in their casinos if they agreed to give up criminaljurisdiction over Indians who are not members of their tribes.

That demand clearly conflicts with a federal statute givingtribal governments the power to bring criminal cases against anyIndian who violates the law on a reservation.

The tribes believe they should not have to cede their jurisdictionto get economic development. They point out the many benefitsto the state from the operation of their casinos.

William Schumacher, chairman of the Flandreau tribe, says hisgroup has created more than 1,000 jobs, boosted sales tax revenueand used casino profits to start farming and cattle operations,and doubled the size of its small reservation.

The Fort Randal Casino has more than 600 workers, helps getfamilies off welfare, and has enabled the tribe to build new offices,a water tower as well as a drug and alcohol treatment center.

University of South Dakota economics professor Michael Maddensaid tourism spending in the five counties with tribal casinosincreased from $8 million to $31 million after the casinos openedin his state.

Debate Over Regulations

Federal regulators contend that chaos is developing in theIndian gambling industry because of lax oversight and the absenceof federal standards for tribal casinos. Regulations are seenas inconsistent and fragmented nationwide. The National IndianGaming Commission also complains it does not have the resourcesto be able to regulate the existing gaming operations.

The biggest problem is in illegal casinos springing up in Californiaand New Mexico, not the legal operations in other states.

The commission has 17 employees in the field, but there areover 200 Indian gambling facilities nationwide.

Gerald Torres, counsel to U.S. Attorney General Janet Reno,says 'Many states are ill-equipped to regulate Indian casinos.'

Indian leaders say they don't object to the idea of federalstandards per se, but they oppose the expansion of the IndianGaming Commission proposed in legislation drafted by a Senatecommittee. The bill would overhaul the Indian Gaming RegulatoryAct that established the commission.

Marge Anderson, chairwoman of the Mille Lacs Band of Chippewain Minnesota says the legislation 'could turn all regulationat our casinos over to some distant bureaucrat.'

Richard LaFromboise, chairman of the Turtle Mountain Band ofChippewa in North Dakota affirms that 'We believe our presentregulatory structure is more than adequate for our tribal activities.'

Both Republicans and Democrats on the Senate Indian Affairscommittee have said that tribal casinos should be forced to adhereto much stricter federal guidelines, including licensing of games,background checks of key casino employees and accountings of revenuesand profits.

One proposal would also let states refuse to allow Indian gamingwithin their borders - a right they don't have now.

Henry Buggsalo, a Minneapolis lawyer who represents tribalgovernments with gaming interests, says 'I would call ita pretty deliberate attack on Indian gaming.'

Indians Victimized Again

Some of the regulations are clearly designed to help, not hurt,tribes. Federal officials say Indian casinos are currently losingmillions of dollars in excessive management fees, and they'revulnerable to criminal activity through a lack of adequate gamingcontrol.

Best slot machines to play at emerald isle casino. Although most tribes run gaming operations themselves, about70 hire outside companies.

One government report claimed that tribes have lost 'substantialamounts of potential revenues' because of 'inadequatemanagement direction and oversight, certain fraudulent or wastefulactivities and deficient decion-making by management.'

The growth of the industry occurred so quickly, and so manyof the tribes lacked the business experience or financial expertiseto completely protect their interests, that they once again fellvictim to unscrupulous predators.

For example, after reviewing 37 management contracts (signedbefore 1993, when the National Indian Gaming Commission beganits oversight operations), the Interior Department concluded thatthere were excessive fees amounting to $62.2 million in 18 ofthem. The management companies' risk and investment did not justifytheir fees - as high as 40% of net revenue a report claimed.

Investigators also warned the industry could be open to theftand embezzlement. Tribes in eastern Wisconsin lost more than $500,000through that method from 1986 to 1991.

The Interior report warned that 'Any type of businessthat operates primarily on a cash basis without receipts or otherwritten records needs stringent controls to protect the establishmentand its employees and patrons.'

The theft of $395,000 from a Wisconsin tribe, for instance,would have been discovered earlier if the gambling operation (abingo parlor) had standard controls over daily ticket counts andcash reconciliations, the investigators noted.

Among the startling revelations in the Interior Department's1993 probe was that six tribes in Wisconsin and seven more inMichigan paid $40.3 million to lease gaming equipment that theycould have bought for just $3.2 million.

Ada Deer, of the Bureau of Indian Affairs, admitted that inthe past, some tribes 'entered into unconscionable contractsand leases' that called for 'exorbitant or excessivefees.'

Benefits and Drawbacks

There can be no doubt that Indian gaming is an economic boomnot only to the tribes but to the surrounding communities. InMichigan, for instance, Indians now spend more than $40 millionannually on food, supplies, utilities and insurance required torun their casinos - with 95% of the money remaining in the state.

Welfare is being reduced. In Minnesota, roughly 37% of thetribal gaming employees had received state or federal welfareassistance prior to their employment and another 31% were drawingunemployment compensation. Daniel Tucker, chairman for the Sycuanband of Mission Indians, points out that 'Indian gaming notonly reduces the burden on tax-funded social programs but it nowincreases available reserves.'

But are there hidden costs? A new study underwritten by theFord Foundation says officials in various states have glossedover gambling's substantial negative economic consequences whiletouting its job and income-producing potential.

A second study, by University of Minnesota researchers, raisesquestions about the extent to which that state's Indian casinoshave benefited economies in rural counties where most are located.

The theory propounded by the Ford Foundation is that althoughlegalized gambling has produced increases in employment and staterevenues, a shift of large amounts of consumer spending to stateand tribally-sponsored gaming enterprises has had negative effectson other businesses, notably the restaurant, entertainment andlodging industries.

To take Minnesota as an example, the report claimed that businessvolume has actually fallen by 20% to 50% at restaurants locatedwithin a 30-mile radius of casinos with food service. And at $558per capita in yearly wages, gambling expenditures in 1990 exceededsuch categories of retail spending in Minnesota as appliance,clothing, electronic, home furnishing and shoe stores, as wellas hotels.

In addition, for every problem gambler addicted to high-stakesgaming, Minnesotans must pay at least $13,200 to prosecute them,incarcerate them and provide restitution to their victims.

The University report claims that the social costs of compulsivegambling alone are equal to about one-half of a casino's grossrevenues. If that is correct, the estimated social cost of Minnesotacasino gambling would be $250 million per year.

The Shake-Out Has Begun

When gambling was new, each new track and casino prosperedat the beginning. But as gambling has expanded and saturated themarket, the economic laws of survival came into play.

'Gaming is only valuable in its rarity,' says AnthonyHope. 'Once everybody's got it, it's worthless.'

Around the region, casinos nearest to large population centersare thriving while remote sites could be eliminated or forcedto serve as small, resort-season outlets.

The first big shakeout is pari-mutuel betting on greyhounds.In Wisconsin, the state's five dog racing tracks have sufferedfrom competition with 17 tribal casinos.

John Tries, chairman of the state Gaming Commission, says 'Thedog tracks are very, very susceptible at this point to closure.'Wisconsin dog tracks were expected to suffer a $52 billion downturnin bets when results for 1994 are tallied.

The dog track at Wisconsin Dells has parlayed the success ofthe nearby Indian casino into improving its own financial situation.Often the casino is so crowded that the spillover crowd ends upat the dog track. It is this sort of phenomenon that other trackswant to emulate.

Everybody Wants In On the Act

Even when a casino is hugely successful, the success begetsproblems.

Take, for example, Mystic Lake - one of the nation's largestcasinos - which has turned 150 members of the Mdewakanton Dakotatribe into millionaires since it opened in 1992.

A dispute has arisen over who is entitled to share in casinoprofits. Leonard Prescott, head of a corporation that runs thecasino at Prior Lake, MN., says the success of his facility hasresulted in dozens of people who don't belong to his tribe neverthelessclamoring for tribal membership.

Some have a dubious claim, Prescott believes. 'They arepeople who never lived on the reservations and they may be cousinsor relatives of somebody who does. They don't help us build thebusiness.'

Admittedly, rules over tribal membership are confusing andcomplex, and one of the basic tenets - proof of a 25% bloodline- is a standard that is increasingly difficult to maintain witheach succeeding generation.

The other problem is that many nonIndians want to share inthe largess. Challenges have been mounted to the legal monopolyon casinos for Minnesota's estimated 50,000 Indians in 11 federally-recognizedtribes.

Eugene Christiansen, president of a New York gambling consultingfirm, notes 'Indian gambling is goading state legislaturesto authorize casino games and other forms of gambling. If theIndians have casinos and states can't tax them, there is a naturaltendency for legislators to say 'Hell, we'll have our own casinosthat we can tax.'

Developers and bar owners have been clamoring for expandedforms of non-Indian gaming - ranging from a multimillion-dollarcasino and entertainment complex in downtown Minneapolis to legalizedslot machines in bars and restaurants. Instead of opening theirown casinos, other state governments have begun looking for waysto extract concessions or financial rewards from the Indians inlieu of taxes to forge a rewarding, if sometimes uneasy, coexistence.

But Indians not directly benefiting from Mystic Lake's successhave come to its defense. 'We see those politicians cryingabout a 'level playing field.' None of them were concerned abouta 'level playing field' for 600 years, when we were subjectedto campaigns of internment, campaigns of genocide,' saidVernon Bellecourt, the American Indian Movement leader.

Against If U Have A Slot Machine Donation Business Gambling Winnings

'It just reeks of racism,' Bellecourt fumes. 'Iread that 'this' CEO of 'this' corporation gets a $4.5 millionbonus a year. What's wrong with having another 150 millionairesin Dakota County, particularly since these people have sufferedeconomic hardship?'

Rick Hill says efforts to restrict or do away with tribal gamblingare modeled on the 'cowboys and Indians' mentality.

Indian Casinos Favored

Despite challenges, the Indian-run gambling operations areexceedingly popular with the public.

Casinos around the Heartland are generally scrupulously well-runenterprises that are finding ways to help their native populations,and preserve their heritage even as they improve life.

Against If U Have A Slot Machine Donation Business Gambling Money

And, those who are familiar with Las Vegas, Reno and AtlanticCity gambling establishments say that most of the Indian-ownedcasinos are just as good in terms of service and operation. TimGiago says 'the thing most gamblers should consider whenchoosing a vacation spot where they can play the slots or playa few hands of blackjack is that the money they win is as goodas if they had won it in New Jersey or Nevada, but the money theylose goes to the many social and economic development programsof the different Indian tribes.'

Against If U Have A Slot Machine Donation Business Gambling Machines

Back to the top