Challenging the Indian gaming monopoly

By Doug Bandow


WASHINGTON - Gambling is big business. It also is illegal in most states - except for government-run lotteries and American Indian casinos.

Gambling, like most human activities, can be abused. But that's no reason to ban it. A free society allows people to make what everyone else believes to be a mistake.

Yet 23 of 30 states that prohibit gambling allow casinos by Indian tribes, which are treated as sovereign nations. This peculiar "sovereignty" has spawned an $18.5 billion business encompassing 411 Indian facilities.

The largest casino complex in the world is in Connecticut, not Las Vegas - the 4.7 million square foot Foxwoods Casino and Resort. Five tribal operations currently are seeking to build in New York's Catskill Mountains. The Cheyenne-Arapaho are pushing to construct a 500 acre facility near Denver International Airport.

There are 54 Indian establishments in California, which collect some $5 billion. California reporter Jan Golab argues that "Gov. Arnold Schwarzenegger's legacy will largely be a matter of whether or not he allows the Golden State to become the new Nevada." With 107 federally recognized reservations and rancherias, there is almost a limitless prospect for expanding tribal gaming in California.

One of the most pernicious aspects of the preferential treatment accorded Indian gambling is turning Indian Tribes into a well-funded special interest seeking political favors. Some $150 million in political contributions have given Indian tribes substantial clout.

Although the largesse can backfire - stoking popular anger against former California Gov. Gray Davis, for instance - the tribes retain numerous friends at the state and federal levels. The Indian monopolies wouldn't be quite so outrageous if limited to real tribes with real reservations. But the prospect of abundant booty has led to numerous abuses.

Golab points to the 70-member Miwok Indian tribe, whose membership was opened by Bureau of Indian Affairs officials - who themselves joined the Miwoks - before pursuing a $100 million California casino. Moreover, profit-seeking groups constantly attempt to surmount whatever government rules currently limit Indian gaming.

For instance, property acquired after 1988 is ineligible to host a gaming enterprise, absent special circumstances. However, Americans Indians often press for exceptions.

For instance, in San Pablo, Calif., the Lytton Band of Pomos wanted turn a card room into a massive slot operation. U.S. Rep. George Miller, D-Calif., helped out by authoring legislation to effectively backdate their land purchase.

U.S. Sen. Diane Feinstein, D-Calif., is pushing to reverse that legislative sleight of hand. Moreover, substantial local opposition has stalled state legislative approval of the pact signed by Schwarzenegger with the Pomos.

The issue is not whether the San Pablo casino is a good or bad deal. Supporters and opponents seem equally ardent.

The real problem is that the process is politicized, with American Indians possessing a unique privilege to run gaming operations. Best would be to open gaming to anyone, allowing anyone to indulge in what many consider to be a bad habit, with due regard to the consequences on other.

At the very least, Congress shouldn't manipulate the rules for the interests of particular Indians and their outside partners. Creating "instant tribes" and establishing "instant reservations" is no way to run the gaming business.

Congress needs to go far beyond individual cases like San Pablo and reconsider the 1988 Indian Gaming Regulatory Act, which has unintentionally spawned the explosion of American Indian casinos.

In fact, Washington should more fundamentally reconsider the status of American Indians. There's much to regret in America's treatment of the continent's original inhabitants.

But that's still not a good reason to create artificial enclaves with special privileges not possessed by the rest of the population. Such as opening casinos when no one else has that right.

Indeed, the best thing for American Indians would be to escape their protected, regulated status. Admittedly, casinos have been a boon for many tribes. Observes Dee Pigsley, chairwoman of the Confederated Tribes of Siletz, "No other development could return the kind of profits that a casino could offer."

But Indians should participate in a variety of entrepreneurial enterprises rather than be dependent on public subsidies through the Bureau of Indian Affairs and artificial gaming monopolies through Congress. America's Indians once were oppressed and mistreated. Today, however, many of them have become sophisticated business operators and political players.

Indeed, their success is why, notes Jan Golab, "Despite Arnold Schwarzenegger's success in standing up to the Indian tribes of California, most elected officials are afraid to address the issue of sovereignty." Schwarzenegger notwithstanding, tribal casinos continue to expand.

Many lawmakers perceive the political risks of challenging the industry to be great while the electoral benefits to be few.

However, public frustration with today's preferential system for American Indian gambling is growing. The issue is too important for lawmakers to avoid for long.

Doug Bandow is a senior fellow at the Cato Institute and James Madison Scholar with the American Legislative Exchange Council.

Copley News Service

Visit Copley News Service at