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Best of Liz Benston

Gaming Guru

Liz Benston

Study: Casinos Helping Pull Tribes from Poverty

18 February 2005

LAS VEGAS -- Tribal casino gambling helped boost income among American Indians faster than the general population in the 1990s, though income among tribes with no connection to gambling rose faster than researchers expected over the same period, a Harvard University researcher told a conference of tribal leaders in Las Vegas last week.

Even so, most tribes remain in "staggering poverty" and would need at least 50 years to catch up to the general population at current growth rates, said Harvard professor Joseph Kalt, the study's co-author and co-founder of the Harvard Project on American Indian Economic Development at the John F. Kennedy School of Government.

The study, released last month, compared Census data on per capita income among casino tribes and nongaming tribes from 1990 and 2000. The increases, after decades of stagnation, are the first sign in more than a century that Indians are improving their economic situation, the study found.

Per capita income among gaming tribes rose 36 percent from 1990 to 2000, to $8,466, while the per capita income for the overall U.S population grew 11 percent to $21,587. Per capita income among nongaming tribes grew 30 percent to $7,365.

While nongaming tribal members made less than members of gaming tribes, the increase in nongaming tribal income was unexpected and indicates that the influence of casinos, for most tribes nationwide, is more limited than people think, Kalt said.

"That was the surprising result of the study," he said. "I went back five times to check it again."

Kalt presented results at the 19th annual National Reservation Economic Summit at the Las Vegas Hilton. The event is hosted by the National Center for American Indian Enterprise Development, an Arizona-based nonprofit group that promotes tribal economic development.

Tribal income figures exclude data from Oklahoma because the reservations of the now-defunct Oklahoma Indian Territory, as measured by the Census, cover the vast majority of the state and even include downtown Tulsa.

Household income for tribes followed similar growth trends.

Household income among gaming tribes rose 35 percent to $23,712 and rose 36 percent among nongaming tribes, to $20,704. That compares to an increase of 4 percent, to $41,994, among the general population.

The data reflect widespread poverty among tribes, the nation's poorest minorities.

"Tribes have a long way to go because they're starting from such a low base of extreme poverty," Kalt said.

Income growth across all tribes is being driven by increasing self-government, of which gaming is only one factor, he said.

"Self-rule brings decision-making home and local decision makers are held more accountable to local needs, conditions and cultures than outsiders," the study said. "On the other hand, prior to the present era of Indian self-determination, decades of distant decision making by federal and state authorities accountable to non-Indian constituents and masters had shown little discernible ability to break repeated patterns of poverty and social disarray."

Indian incomes fell in the 1980s as federal assistance declined. Self-government hit its stride in the 1990s, Kalt said.

The unemployment rate declined for both gaming and nongaming tribes. Unemployment among gaming tribes fell to 15 percent from 19 percent but was still more than twice as high as the national unemployment rate of 6 percent. Unemployment fell to 22 percent from 25 percent among nongaming tribes. The data included people older than 15 who were unemployed.

Nongaming tribes recorded economic gains even as the Indian population rose, the study said.

The American Indian population grew 21 percent to 2.4 million people, with 1.7 million people living outside reservations. Of gaming tribes, 71 percent lived in rural areas compared with 79 percent of nongaming tribes. Only 21 percent of the general U.S. population lived in rural regions.

The urban-rural divide is stark and means that few tribes will be able to develop casinos in lucrative locations like those in California and Connecticut.

"There are casinos in South Dakota and Montana where the gaming facility is in a house trailer and five truck drivers a day come by and throw quarters in the machine," Kalt said.

Casinos aren't a guaranteed ticket out of poverty, he said.

Casinos in some rural areas don't hold much economic promise, while certain tribes are uncomfortable with gambling, he said.

The Navajo Nation, the nation's largest tribe, is split on the subject of owning casinos. The Navajo were three times the combined populations of other reservations without gambling.

Kalt said the study may end up being used for various political ends.

People with different views should still see the results as promising, he said.

"If you think (tribes) should have a right to govern themselves then this data is saying that policy is working," Kalt said.

Those concerned about tribal poverty and its drain on federal funds can also take heart that self-government is making a difference, he said.

The study was funded by the National Indian Gaming Association, a trade group representing casino tribes, and the Harvard Project on American Indian Economic Development. The Harvard Project is funded by the Christian A. Johnson Endeavor Foundation and the Ford Foundation.