Gaming Guru

Bits and Pieces from Indian Country - February 2005

Indian casinos pulled in $18.5 billion in 2004, a 10 percent increase over 2003 and the latest year of double-digit growth for the booming industry, a tribal group reported Tuesday. The figures from the National Indian Gaming Association indicate that tribal casinos have far surpassed Nevada casinos in gambling revenue. Major Nevada resorts took in $19.59 billion in the 2004 fiscal year -- $9.88 billion of that was from casino games. The Indian casino figure is just for gambling. …Twenty-eight states have tribal casinos, and there are a total of 411 Indian casinos nationwide. Most of them have been built since Congress passed a law creating the legal framework for Indian gambling in 1988. Associated Press, Baltimore Sun, 2-15-05

There are two sides to the attention, the positive and the negative. On the positive attention side are states where governors, mayors and others see good news in the success of Indian casinos. In Minnesota the governor has inked a deal to bring a joint state-tribal casino into at least one urban area. New York, Indiana and Ohio are states that like Minnesota have strong supporters of Indian gaming, constituents that see Indian gaming as a way to redevelop deteriorating downtowns, build athletic stadiums or just boost sagging economies.

Gov. Pawlenty and leaders of three northern Minnesota Indian tribes on Friday announced a proposed partnership for a major new $550 million Twin Cities casino that would bring $200 million to the state up front and $164 million per year once it is fully operational. Dane Smith, Minneapolis Star Tribune, 3-4-05

On the negative side are many different interests, such as businesses that feel Indian tribes have an unfair advantage, governments and citizens of cities that don't believe gaming is right for them,and state and local governments that are fighting to maintain sovereignty over their territory. Especially important in the debate that promises to become significant in 2005 is the urban Indian casino, or any casino that is off traditional "reservation" land. Many tribes are seeking to move into states where they currently have no reservation, as in Ohio and New York, or into commercially more viable urban areas as in California and Minnesota. Local governments, ballot initiatives, congressional committees and federal courts are all going to play a role in the debate.

Call it 'reservation shopping' or 'land into trust,' but the arcane process by which the federal government establishes 'Indian country' has suddenly emerged as one of the hottest tribal issues of the year. The authority of the Secretary of the Interior to place land into trust for a tribe has just survived a major legal challenge but the controversy over the process will continue, inflamed by rivalries over casino markets and struggles internal and external over tribal sovereignty. Congressional committees are planning hearings and possibly legislation on the placement of tribal casinos. A bitter fight is almost inevitable over Congressional legislation necessary to settle New York state land claims, which would pit in-state tribes against cousins who emigrated during the 19th century Indian removals. One issue is the right of governments from the diaspora to reassert jurisdiction over ancestral land basically next door to those tribal governments that never left. Another is an economic struggle for a piece of the expanding New York casino market. The intricate interplay, mainly among the tribes of the Haudenosaunee (or Iroquois Confederacy), also involves state and local attempts to tax sales on Indian territory. Vastly raising the stakes is a pending U.S. Supreme Court decision that could limit or greatly expand the definition of 'Indian country.' The City of Sherrill v. Oneida Indian Nation case was argued before the Court Jan. 11. If the associate justices uphold lower court rulings, New York tribes could automatically re-establish sovereignty when they repurchase land that was illegally sold from their treaty territory. Jim Adams, Indian Country Today, 2-18-05

Five years ago, California voters overwhelmingly approved Las Vegas-style casinos on Indian lands…Bay Area voters supported Proposition 1A by 62 percent. Since then, tensions have occasionally arisen…it wasn't until proposals to build casinos in urban areas began to surface that the alarm spread. Now, the strongest opposition since the California Indian Self Reliance Initiative passed in 2000 is targeting proposals to build casinos in the East Bay cities of Oakland, Richmond and San Pablo as well as near Hollister and in Marin County. The backlash here could slow down Indian gambling statewide. …A Marin County city councilman is working to qualify a statewide initiative calling for a five-year moratorium on new casinos. Two Bay Area anti-gambling activists have registered a second ballot measure with the state attorney general's office, seeking to ban casinos in urban areas. …"What you're seeing is a grass-roots reaction,' said Assemblywoman Loni Hancock, D-El Cerrito…"I think it's time for a second look at this and I think it's a pretty broadly shared view.' Thaai Walker, San Jose Mercury News, 2-21-05

The governor of Colorado is hosting a summit in March for other governors to discuss the subject and to develop strategies. Colorado is one of the states that is faced with outside tribes claiming ancestral land within the state and seeking to build a casino close to Denver.

Tribal gaming will take center stage at an executive summit being organized by the Western Governor's Association. To be held March 29-30 in Denver, it will examine issues raised by the growth of tribal gaming since passage of the Indian Gaming Regulatory Act in 1988. There are 13 tribes in New Mexico who operate gaming casinos. In addition, Jemez Pueblo, Picuris Pueblo and the Fort Sill Apache Tribe of Oklahoma are considering off-reservation casinos in southern New Mexico, prompting state Sen. John Arthur Smith, D-Hidalgo, to introduce a bill in this year's 60-day legislative session now underway in Santa Fe that would allow gaming in hotels, bars, restaurants and convenience stores. Colorado Gov. Bill Owens, who chairs the association, says the summit will be an opportunity to examine the impact of tribal gaming as well as the role of states, tribes and communities in the process. The summit will explore the benefits of gaming to tribes, the impacts on surrounding communities, the regulation of gaming operations and proposals for off-reservation gaming. New Mexico Business Weekly, 2-21-05

Public discussion and hearings are becoming more common. In New York the governor seemed to have the process in hand just a couple of years ago; today the state legislature is holding public hearings. In New Mexico the BIA is doing the same thing. The South Dakota legislature tried unsuccessfully to vote itself into the process. In California numerous communities are involved in a debate over Indian casinos, both local and state governments are holding hearings and public debates. The message in all cases is clear, the public is demanding a role in the process.

In the first of six planned legislative hearings into Pataki's bill to settle American Indian land claims, Lynnette Stark, deputy commissioner with the Department of Environmental Conservation, revealed Pataki has written to the U.S. Bureau of Indian Affairs, asking it to require environmental impact statements that assess the cumulative effects of the five casinos proposed for Sullivan County. James M. Odato, Times-Union, 3-1-05

The Bureau of Indian Affairs is gathering public comment and information on the proposed acquisition of land in southern New Mexico by Jemez Pueblo to build a casino, the agency announced Monday. The BIA has scheduled a public scoping meeting for March 16 in Anthony, where the tribe and Santa Fe art dealer Gerald Peters want to build a casino. Las Vegas Sun, 3-1-05

The South Dakota Legislature should have the last word on gambling compacts between American Indian tribes and the state, legislators decided Monday. Sebate Bill 210, sent 8-3 to the full House by the State Affairs Committee, would give the Legislature final approval of agreements negotiated between tribes and the state. "That is a public issue and deserves legislative review," said Rep. Charles Turbiville, R-Deadwood, a prime sponsor of the measure. Brad Perriello, Associated Press, Las Vegas Sun 3-1-05

The courts are not a last resort, but are very often at least one step in the process. It was the Cabazon decision in 1987 that led to the National Indian Gaming Regulatory Act, the Act that really launched the whole debate, though few understood the impact of the Act way back in 1988. The court continues to be important, as for example, in California where some tribes resist the state's control over the number and types of games they can offer.

A federal judge ruled Monday against the Pechanga tribe in its latest battle with the state over how many gaming devices the band can operate, a move that could ultimately force the shutdown of its casino. U.S. District Court Judge William J. Rea refused to stop the state from enforcing a definition of multiple-player gaming devices that would put the Pechanga Band of Luiseño Indians over its legal limit of 2,000 slot machines. If Pechanga exceeds that cap, the tribe will be in violation of its state gaming agreement -- known as a compact -- and could lose its right to run a casino. Michelle Dearmond, Inland Southern California Press-Enterprise

The state won a rehearing before the full 10th U.S. Circuit Court of Appeals in Denver in its attempt to prevent the Northern Arapaho Tribe from offering high-stakes, Las Vegas-style casino gambling. The decision was a pleasant surprise for the state and a setback for the tribe, which has laid the foundation for a new casino two miles south of Riverton on Wyoming 789. "It's a real rare circumstance," state Attorney General Pat Crank said Monday. "It's an indication that a number of judges on the 10th Circuit want to take a close look at the issue." Mark Howell, consultant to the tribe, said the decision would at least slow construction of the casino because some financial backers may wait for the court battle to conclude before committing money. The rehearing before the 12 judges was scheduled for May 3 in Denver. Bob Moen, Associated Press, Billings Gazette, 2-28-05

There are a couple of other national issues heating up this month. The first is the ongoing investigations into the activities of lobbyist Jack Abramoff. He is accused of being dishonest with his tribal clients and violating federal guidelines with his lobbying. The case may or may not drag in some major national political figures. It will for certain drag Indian gaming into the public eye and more significantly into the politics of Capital Hill.

An interagency criminal task force investigating former lobbyist Jack Abramoff has subpoenaed a Republican group founded by Interior Secretary Gale Norton and now run by her former aides, sources with knowledge of the investigation say. The subpoena was issued to the Council of Republicans for Environmental Advocacy (CREA), a nonprofit group created in 1997 by Norton and Grover Norquist, president of Americans for Tax Reform, and long denounced by environmental organizations as a front group for industry interests. …The interagency task force is composed of the Federal Bureau of Investigation, the Internal Revenue Service, the public-integrity section of the Justice Department and the Interior Department's Inspector General's Office, an independent unit within the department. The Senate Indian Affairs Committee is also conducting an investigation of Abramoff and Scanlon. Josephine Hearn, The Hill

The is another issue that in time could conceivably become larger in the Indian sovereignty debate than shopping for reservations or corrupt lobbying. It is also a sovereignty issue, sovereignty with a twist or, in this case, a border. By now everyone in America knows that medicines are cheaper in Canada. One might not believe they are safer, but we all know they are cheaper. You have also probably heard that some governors are exploring ways to bring cheaper medicine into the states from Canada. Well, there are tribes on both sides of the border discussing the possibility of importing prescription drugs from one Indian sovereign state to another Indian sovereign state, thereby bypassing the officials and legal controls of the American-Canadian border. There is bound to be federal legislation, law enforcement and political pressure applied. The American drug industry is not likely to think this is funny. Still if the tribes were to end up with a watered down opportunity like that of Indian gaming (If it had not been for an act of congress, the National Indian Gaming Regulatory Act, tribes could have operated casinos without tribal-state compacts or any other state imposed restrictions according to a U. S. Supreme Court decision in 1987), then imagine the possibilities for tribes that have land bordering other countries: gas, cigarettes, anything in fact that is highly taxed by the local government.

Indian bands in Manitoba and neighbouring Minnesota are talking about using their special 'sovereign' status to trade prescription drugs across the border, possibly to be sold at pharmacies located in native-run casinos in the United States. Casinos are seen by some as excellent locations to dispense pharmaceuticals because of their large clientele of the elderly and ill, also the prime market for cheaper Canadian prescription medicine. As they battle federal authorities in the United States over the trade in drugs from Canada, both the Governor of Minnesota and a prominent congressman from the state have endorsed the idea of using Indian bands as a conduit. The politicians' hope is that American aboriginal groups could skirt the U.S. Food and Drug Administration's ban on importing medicine from Canada and other countries. Tom Blackwell, Canadian National Post, 2-19-05

Two months of 2005 gone, and some trends are beginning to emerge. Casino competition is getting to be very intense and that will lead to more mergers as companies seek economies of scale, growth and expansion opportunities. New jurisdictions are in the wings, but the process is slower than we thought last year or the year before. That will lead to more emphasis and competition on overseas opportunities, such as now is taking place in Singapore. Indian gaming is outstripping conventional gaming, trying to move into larger urban areas and engendering a great deal of political resistance. As that process continues, other tribes will be pushing the sovereignty envelope right up to the borders of the country.

2005 will not be a pivotal year in terms of legislation or court decisions. In those terms, 2005 will be just a year of more of the same. But, it might be seen as a tipping point when viewed from some distant point in history. Tipping point--the time when the critical mass shifted and the dynamics changed. That could be true in operations as the influence of mega-companies increases, changing the way casinos are operated; it might be true as two, three or even four more states add slot machines simply as revenue generating devices putting pressure on other states to reduce limitations and taxations on current forms of gaming; or it might be true as the point when sovereignty definitions expand to include the creation of trade agreements with other like sovereigns, though that certainly is not legally possible today. It appears as a tantalizing possibility, not because Indian tribes have the political power to accomplish it, but because some states would like to escape some federal regulatory controls.

But now, that is simply my opinion, isn't it?

Ken