"The Political Economy of Indian Gaming: Why Are So Many
'Gambling on Gambling'?"
by
Sandra Faiman-Silva, Ph.D.c2000*
Please
do not reproduce without permission
The "frontier" has been
a perennial metaphor in United States discourse, popularized by historians such
as Frederick Jackson Turner (1962 [1920]) and Charles Beard (see Noble
1965). The "frontier"
metaphor was a driving force in westward migration, adaptable to a range of uniquely
American encounters and quests. It
linked ideas of economic opportunity, personal self-sufficiency and individual
self-determination within a ruggedly expansive notion of progress: upward and
out of prior states of poverty and disadvantage, toward new opportunities,
uncharted territories, and expansive spaces.
Initially a geographic construct, the "frontier" has since
captured the imaginary as an industrial, post-industrial, and now cybernetic
boundary-expanding concept.
Political-economist
Wilma Dunaway (1996) also used the "frontier" notion to represent a
particular kind of contact when framed within political economic
discourse. In the "frontier"
metropolitan centers and peripheral hinterlands come together in dialectical
and complex encounters, battling over resources, opportunities, and advantages
in the competitive marketplace of first, mercantilist, and later industrial and
post-industrial capitalism. In the
political economic arena, foreign and domestic markets also constitute
"new frontiers" of opportunity for United States capitalist
entrepreneurs, who invent new consumer markets by stimulating individual and
collective "needs" and "wants."
The "frontier" is a
region of extremes: of poverty and wealth, success and failure, opportunity and
cost. So-called "boom towns"
are by-products of frontier encounters, where rapid economic growth occurs
through the infusion of cash into formerly impoverished rural communities (See
Little 1978). Communities are
invigorated as a result of innovative development, such as newly-discovered
wealth in coal or natural gas or in a profitable emerging industry like
gaming. Boom cycles, however, are
ever-vulnerable to wider political economic forces, and the frontier
communities created may soon decline under new economic, political, or social
conditions.
Gaming--tribes'
so-called "new buffalo" and states' "golden goose"--is just
such a "new frontier" for states, tribes, and private sector
entrepreneurs, a bonanza of potential monetary wealth. The gaming industry has grown phenomenally
since 1970, both as an increasingly popular leisure-time activity and as a
highly successful revenue-producing strategy for states and tribes. Gaming is encoded as a legitimate entrepreneurial
strategy through two related processes:
1) the resurrection of "frontier" language and rhetoric around
familiar symbol-laden metaphors of individual opportunity, self-determination,
and "progress;" and, 2) a process of cultural mystification and
subversion, whereby gaming's monetary enticements submerge its actual cultural,
individual, and social costs as an economic endeavor which exploits vulnerable
populations and regressively expropriates family and community resources. Individuals, and their institutional
representatives at tribal and state levels, tout gaming as an innocent solution
to economic woes within a redefined frontier ideology of self-determined
wealth-seeking; where communities--both states and tribes--are enticed by its
substantial revenue-producing potential. Gaming is also seen by some Native Americans
as a form of pay-back. Gaming, said
Oklahoma Choctaw economic development specialist, Wilma Robinson, "...is
the tribe's best revenge" on the wider community: "We are beating
them at their own game...economic success!" she declared (author's
interview, 6/7/93, Durant, OK). Gaming,
is a new frontier of chance-taking, a palatable--and fun!--entrepreneurial
venture.
Indian
Gaming
Large-scale tribally-sponsored
gaming commenced in the late 1970s, as cash-and resource-poor tribes in Florida
and California, following the lead of successes in state-sponsored lotteries,
introduced high-stakes bingo games on tribal land (See Sockbeson 1987:4;
Folwell 1988:69; Cordeiro 1992; Cozzetto 1995; Worthen and Farnsworth 1996). Tribal economic initiatives were in part
fueled by passage of the Indian Self-Determination and Education Assistance Act
of 1975 (PL 93-638), under which tribes were encouraged to reduce federal
dependence through self-determined tribal economic initiatives. One of the first tribes to institute gaming
was the Florida Seminoles, who, in response to state opposition to their gaming
initiative, sued in federal court in 1979 (Seminole Tribe vs. Butterworth, [658
F.2d 310{5th Cir. 1981}]). The tribe won
the right to conduct gaming operations on tribal land so long as the state permitted similar operations, a ruling
affirmed in another 1987 federal court decision pitting the State of California
against the Cabazon Band (480 U.S. 202 [1987]).
In 1988 the U.S. Congress passed
the Indian Gaming Regulatory Act (IGRA [25 USC 2701 et.seq.]), which recognized
tribal jurisdiction over Indian gaming operations, although the IGRA stipulated
that tribes must negotiate with states over the types of games permitted and
their regulation. IGRA further
stipulated that Indian gaming revenues be used solely for tribal governmental
operations and charitable purposes. A
National Indian Gaming Commission (NIGC) was formed in 1993 under IGRA, which
regulates Indian gaming operations nation-wide.
IGRA created three classes of gaming: Class I gaming included
traditional tribal and ceremonial gaming and would be regulated solely by
tribes; Class II gaming--bingo, pull tabs, lotto and some card games--was also
regulated by tribes under IGRA regulations; and Class III gaming, including
blackjack and slot machines, would be regulated by state-tribal compacts. Some states, such as Mississippi, Arizona,
Alabama and Florida, resisted negotiating gaming compacts with tribes, even
though non-Indian gaming operations were legal in their states (Los Angeles
Times 2/26/87, 1(3); New York Times 7/23/90, A(10); Cordeiro
1992:214-216; Vizenor 1990:22-24; Begay and Leung 1994; Cozetto 1995; see also
NIGA website:www.dgsys.com/^niga:2/16/97).
The Indian Gaming Act's history
recounts a familiar pattern of uneasy tension among tribes, states and federal
government authorities over still ambiguously defined issues of tribal
sovereignty and self-determination. Like
historic battles over tribal land, natural resources, taxation rights, and
Native American governing authority, Indian gaming has become another political
and economic battlefield among states, tribes, and private entrepreneurs vying
for pieces of a multi-billion dollar industry (See Green 1996). As Worthen and Farnsworth (1996:407)
forcefully argue, "...the current controversy concerning reservation
gaming...[is] the latest round in a much longer and larger struggle among the
federal, state and tribal governments over the States' role in governing Native
American groups within state borders."
Indian gaming is particularly problematic in this historic battle,
because it offers highly sought after economic opportunities for both states
and tribes. Gaming, however, poses
serious contradictions and dilemmas: political, economic, social and
moral. Gaming allows tribes to overcome
persistent poverty and unemployment, but is not without social and economic
costs, such as addiction, organized crime, and economic exploitation.
Gaming:
"Big Business" for Tribes and States
The United States gaming
industry today--tribal, state, and corporate--is truly "big
business." Ninety-two million
American households visited casinos in 1992, and, "by 1993 Americans spent
nearly $400 billion a year on all forms of legalized casino gambling, a figure
which has grown at an average annual rate of almost 15 percent a year between
1992 and 1994," according to Worthen and Farnsworth (1996:f.n 2). Indian gaming represents only about seven
percent of legal gaming income nationally; producing for tribes about $7
billion in gross revenues and between $750 and $1 billion net income
annually. State-sponsored operations in
thirty-seven states bring in about ten times that amount, an estimated $10
billion dollars annually (Worthen and Farnsworth 1996:407; f.n 2).
Fewer than one third of the
nation's 557 federally recognized tribes, approximately 140 tribes, sponsor
gaming operations, ranging from high-stakes bingo to casino gambling; and
Indian gaming operations nationally employ over 120,000 people directly and
produce an estimated 160,000 indirect jobs (NIGA website:
www.dgsys.com/~niga/2/16/97). Gaming as
a tribal entrepreneurial strategy is particularly attractive for resource-poor
tribes, since it entails few capital costs, is more labor-intensive than some
other industries, and is highly lucrative.
As a result, gaming has become the economic centerpiece of economic
development and sovereignty-focussed self-determination movements on
reservations and in Native American communities from Maine to California. With American enthusiasm for gaming seemingly
insatiable and unabated, Native Americans have entered an economic niche that
could enrich them for decades to come.
Like energy extraction industry-created border boom-towns in the Navajo
and Hopi Nations, gaming has energized many Native American economies.
Many Native Americans are
winning in truly grand style in their gaming initiatives, both in the
political-economic arena of tribal politics and in the global marketplace of
capitalist entrepreneurship. Gaming has
brought phenomenal financial success to Connecticut's Mashentucket-Pequots,
whose two hundred adult tribal
Our gaming operations are
providing the resources to fund programs for our elders, and programs for our children. Our gaming operations
are providing the capital for
economic diversification projects on our land. Our gaming operations are providing the funds to fix the problems we
have never been able to deal with
financially. Our gaming operations are providing the resources for a renewed respect for our culture
and our people (New Mexico Indian Gaming
Choctaw
Nation Gaming
The Oklahoma Choctaws, who
opened the Choctaw Nation Bingo Palace in 1987 in response to Reagan-era
"new Federalism" initiatives encouraging tribes to take over formerly
BIA-run services and develop tribal economic enterprises, have also
accomplished impressive economic growth as a result of gaming profits. With many of his people languishing in
poverty in the late 1970s, Choctaw Chief, Hollis Roberts, sought to turn around
the tribe's persistent unemployment and poverty problems in a region dominated
by private non-Indian extractive and food-processing giants, Weyerhaeuser
Timber Company and Tyson Foods, Inc.
Roberts faced a fundamental challenge of providing his
Beginning in 1985 the Choctaws
implemented Reagan-era "new Federalism" policies in earnest, which
aimed to promote tribal self-determined economic development initiatives
through block grants and private sector development partnerships. The tribe took over the 52‑bed Talihina
Indian Hospital, renamed the Choctaw Nation Indian Hospital, and three outlying
health clinics, which together employed over two hundred people. A second tribal initiative was the 1986
acquisition of the 256‑acre Arrowhead Lodge, located in the northern
Choctaw Nation, which was renovated to provide beach accommodations and an
amphitheater, again with the goal of providing additional jobs for
Choctaws. The lodge complex employed
over 140 people in 1987, three‑quarters of whom were Choctaws. A capstone to the Lodge is a recently-completed
12,000 square foot convention center which accommodates eight hundred people (Bishinik
[Durant, OK], 5/87, p. 2; 2/92, P. 1).
The boldest and potentially most
controversial Choctaw undertaking was in 1987, when the Choctaw Indian Bingo
Palace opened at Durant, creating about 140 additional jobs and promising to be
a significant revenue‑producer.
The bingo concession attracts approximately 160,000 people per year,
eighty percent from Texas. In its second
year of operations bingo netted more than one million dollars in profits and
the Choctaws expected to earn $12 million annually when it took over full
ownership after seven years. The complex
has been expanded to include a full‑service Travel Center, the Choctaw
Nation Travel Plaza, which in 1992 grossed over $1.4 billion per month (Bishinik 2/92, p. 3).
The Choctaws just opened a second travel plaza in Durant (Bishinik
10/96, p. 1), with $1 million in tribal funds and a 1/2 million dollar U.S. HUD
block grant.
Bingo and other tribal profits
finance supplemental health‑related services not funded by Indian Health
Service appropriations, including specialized medications for diabetes and
arthritis (Talihina [Oklahoma] American 12/21/89, p. 1; Bishinik,
10/96, p. 5), funds drastically curtailed during and since the 1980s Reagan
era. Tribal General Fund revenues along
with federal entitlement monies provide supplementary medical, dental and
optical services; home maintenance and upkeep programs; head start, Women,
Infants and Children (WIC) and Food Distribution programs; energy assistance,
nutrition and support for the elderly; and low interest business and personal
loan programs. Revenues have also been
used to construct twelve Community Centers throughout the Choctaw Nation and
fund higher education scholarship programs (Tribal news release, Durant, Ok.,
June, 1991; Bishinik 1987-1996).
The Choctaws also own a six-passenger tribal airplane and even
introduced their own "Choctaw Visa" credit card (Bishinik,
8/91, p. 1; 1987-1997).
Not only is the tribe
subsidizing federal entitlement programs, but it recently agreed to contribute
$1 million through its Tribal Improvement Program to pave and modernize State
Highway 144, which the State of Oklahoma threatened to abandon and the County
refused to accept in its unpaved condition (Bishinik, 2/95, P. 1). The tribe has also contributed to the local
economy by earmarking one percent of bingo profits for the City of Durant,
where the bingo palace and travel plazas are located, and 1/3 of one percent to
the local Chamber of Commerce.
"They love it!" Wilma Robinson, the tribe's Economic
Development specialist stated (author's interview, 6/6/94, Durant, OK).
Choctaw Nation economic
development has been stunningly successful under Chief Roberts' leadership--a
staunch political conservative--during the federal downsizing eras of "new
Federalism," Bush, and now Clinton, transforming the tribe into a highly
efficient quasi-corporation with a portfolio worth more than one-third billion
dollars. His "bootstrap"
entrepreneurial approach has brought Roberts praise from constituents, who
overwhelmingly reelected him in 1995 with an 80 percent margin of victory. Under Roberts' tenure, the tribe itself has
also grown substantially, since blood quantum
Tribal economic growth, build
largely upon highly successful bingo and travel plaza enterprises, has provided
an economic cushion to Choctaws during the 1980s and 1990s when federal
entitlement programs were slashed, allowing the tribe to pick up the slack
where federal and state monies were unavailable. The Choctaw Nation has become in effect a
branch of the United States welfare state bureaucracy, channeling tribal
profits into what were previously federal and state-mandated programs. Indeed, the tribe's entrepreneurial
initiatives have brought significant improvements to the lives of local Choctaws,
through a myriad of tribally-sponsored subsidy programs, jobs, housing and
health care.
Gaming's
Darker Side
High stakes gaming has a darker
side, however, revealed in both state and tribal gaming venues. Throughout the nation, states have turned to
what has become "America's...No. 1 growth industry," to recoup
revenues lost in the 1980s' and 1990s' federal and state budget-cutting
frenzy. While states and tribes profit
from gambling, poor citizens fall prey to gambling enticements as a quick fix
to unemployment and poverty. Corporate
giants such as Ramada, MGM, and Hilton, also are cashing in substantially,
making $1.2 billion in profits in 1992 alone.
Jobs created in the gaming industry, however, are typical of the
secondary service sector: low paid and unskilled (Boston Globe
9/26/93:1, 18-19; 9/27/93:1, 8-9; 9/28/93:1, 16-17; 9/29/93:1, 24-25;
9/30/93:1, 18; Vizenor 1990:18-24; 1992; Cozzetto 1995:126-128).
Gaming is a highly regressive
revenue-producing strategy which preys on poor consumers easily co-opted by
gambling enticements and not infrequently trapped into addiction. Gaming "plays like Robin Hood in
reverse, taking from poor communities and giving to rich," said Mitchell
Zuckoff and Doug Bailey (Boston Globe 9/27/93:1). States' push for gaming revenues on close
analysis has been found to have increased in direct proportion to federal
spending cuts during the 1980s and 1990s: a source of scarce resources to
subsidize cash-strapped local coffers.
Federal and state policy-makers are not unaware of this new source of
potential revenues; and current federal budget proposals have suggested
imposing a federal tax on Indian gaming profits, as a new source of revenues to
reduce the federal budget deficit (H.R. 325, "Indian Gaming Tax Reform
Act" [1/7/97]; H.R. 2517 and H.R. 2491, 104th Cong., 1st Sess, S 13631
[1995]; see also Worthen and Farnsworth 1996:426, f.n. 181). Not only would such legislation erode tribal
gaming profits but it would also set dangerous precedents in giving states and
the federal government new authority to tax tribal enterprises.
Massachusetts illustrates
states' interests in gaming as a revenue-producing alternative to raising
taxes. Touted by anti-tax Republican Governor,
William Weld, the Massachusetts lottery begun in 1972 is the largest state-run
gaming operation nation-wide. Through
extensive advertising, large pay-offs, and a wide array of games, the State
added more than $3.4 billion to its coffers in 1996 alone by enticing its
citizen to spend on average $505 annually on the State lottery. Social class disparities in lottery spending
are stark in Massachusetts: while
suburban residents spend only a few dollars annually on lottery tickets,
residents of impoverished communities like Lowell and Chelsea invest $1,000 or
more each year for the chance to cash in on million dollar winnings. Lottery revenues differentially benefit
affluent suburbs: high-betting cities don't get their fair share of lottery
revenues, since lottery revenues are allocated based on property
assessments (Boston Globe, 2/10,
2/11, 2/12/1997; 9/27/1993: 1, 8-9).
Massachusetts is not the only state being consumed by gambling
debts. Nation-wide, in the decade
between 1982 and 1992 gambling revenues tripled nationally, and Americans lost
$30 billion in gambling in 1992 alone (Boston Globe 9/26/93:1, 18).
Similar problems have also
surfaced in Indian gaming contexts as well (see Pasquaretta 1994; Anders and
Thompson 1996). Tribal debates over high
stakes bingo and other gaming operations have pitted factions opposed to gaming
against
Not only does gaming precipitate
internal factional disputes, but tribes vie among themselves, with private
entrepreneurs, and with States for gaming revenues. In Connecticut opposition to the
Mashantucket-Pequot off-reservation casino came from the State's parimutuel
gambling industry (New York Times 11/18/95:A1). Some states, notably California, Nevada, and
North Dakota, have mounted substantial opposition to Indian gaming in their
states, to protect not only state gaming interests but also those of
entrepreneurial gaming. Said Senator
Tribes face cultural and social
dilemmas in a gaming-dependent economy.
As earlier noted, tribal casinos rely on a vulnerable economic base
which offers few skilled jobs. Equally
as troubling is that gaming operations have been found to promote gambling
addictions and other social costs, attract organized crime, and undermine
incentives to work. The Fort McDowell
(Arizona) Yavapais pay each tribal member $40,000 annually from gaming, but
Begay and Leung (1994:6-7) note that the tribe now faces the problem of
"educat[ing] tribal
Tribes
frequently compete among themselves for lucrative gaming sites, and many
operations, particularly remote rural operations far from urban centers don't
bring the profits anticipated. One
tribe, the Hualapai Tribe in northwestern Arizona, closed its casino after
eight months for lack of revenues, and northern Maine's Penobscots struggle to
attract gambling clientele to their high stakes bingo hall (see Worthen and
Farnsworth 1996:f.n.7; Boston Globe 5/13/97, C1, C14). More than one hundred Native American groups
are currently seeking tribal recognition to establish their right to operate
Indian gaming casinos, adding to the competitive arena of tribal gaming dollars
(Anders and Thompson 1996:16).
Tribes, like states, use gaming
revenues to support various public sector programs, including health care,
education, infrastructure maintenance, and jobs training. In an era of heated anti-tax rhetoric, state-
and tribally-sponsored gaming have become income-generating strategies which
by-pass the need for tax increases; and as
Richard G. Hill, National Indian Gaming Association (NIGA) chairman,
testifying before the US Congress, argued, "Indian gaming actually serves
to reduce the Federal deficit" (cited in Worthen and Farnsworth
1996:f.n.198). In Massachusetts gaming
accounts for thirteen percent of state revenues. Among the Oklahoma Choctaws, as earlier noted,
gaming revenues support a range of public welfare and subsidy programs, supplementing
inadequate federal entitlements.
As tribes have taken on more
responsibility for financing what were formerly U.S. government-mandated
entitlement programs, under the rhetoric of tribal economic self-determination,
tribes, too, are shouldering public welfare costs through gaming revenues. Tribal gaming profits have replaced federal
dollars lost during the government downsizing of the 1980s and mid-1990s, a
movement re-energized by Newt Gingrich and other Republicans in their
"Contract with America."
Gaming profits, as earlier noted, pay for day care and head start
programs, home weatherization programs, dental and health care benefits, food
commodities, housing subsidies, jobs' training programs, and even road paving
projects (See Faiman-Silva 1993, 1997; Cozetto 1995). Yet, as also argued, one community's gaming
revenues are another's betting losses; and like regressive tax systems
generally, gambling differentially expolits poorer, less informed, and more
vulnerable citizens, easy prey for gambling's enticements. In fact, Native Americans are also vulnerable
to these enticements, and some tribal gaming enterprises now face the problem
of increased gambling addiction among their own
Conclusion
Perhaps the most formidable
challenge to the Oklahoma Choctaws and other tribes heavily invested in gaming
is and will be to retain cultural integrity in the face of culture contact,
change and redefined ideologies of tribal sovereignty and self-determination in
a gaming context. Native American
sovereignty is realized through collective resource control, independent tribal
decision-making, and cultural integrity--however that is defined and expressed. Throughout the post-contact era Native
American sovereign rights have weighed in delicate balance with national and
global political economic interests. As
Worthen and Farnsworth (1990:f.n.11) note,
The current conventional view,
as bluntly stated by one federal judge, is that 'an Indian tribe is sovereign to the extent that the United
States permits it to be sovereign--neither
more nor less.' United States v. Blackfeet Tribe, 364 F.Supp.192, 194 (D.Mont.1973)." Indian
gaming has once again brought sovereignty and economic agendas together in many
Native American communities, illuminating the perennial tension between Native
American self-determination and larger United States government political
agendas. Does tribal sovereignty linked to economic self-sufficiency signal
eventual cultural annihilation for Native Americans, like the Choctaws? Smith (1994) and Cornell and Kalt (1990,
1992a, 1992b) maintain that the mix of effective leadership, shrewd business
entrepreneurship, and cultural preservation spells the formula for Native
American cultural and social persistence.
Smith (1994:177) however noted the inherent tension in the mix when he
said,
Only when the individual tribe
both controls its own resources and sustains its identity as a distinct civilization does economic development make
sense; otherwise, the tribe must choose
between cultural integrity and economic development.
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