Tribal Casinos/Gaming

According to the Harvard Project on American Indian Economic Development, reservation Indians are the poorest people in the United States, with incomes of less than half the national average. Housing conditions are especially bad; for example, 11.7 percent of homes in Indian Country lack complete plumbing facilities, as opposed to 1.2 percent in the rest of the U.S.

This is why all four of our interviewees are so frustrated by the myths that have grown up around casino gambling. As Kelly Webster said, “Too many people, especially in New England, think that all Indians have become wealthy from casinos.” This misunderstanding probably arises from the fact that some local tribes, notably the Pequots of Foxwoods and the Mohegans of Mohegan Sun, actually have made a lot of money with casinos. Since many people, especially in this area, tend to think of Indians as one group, they assume that all Indians are wealthy. The truth is, Indian tribes are completely independent entities and of the 562 federally recognized tribes, only 224 are engaged in gaming.

Indian gaming (the word that is preferred over gambling) is very strictly regulated, more so even than commercial gaming. In accordance with the Indian Gaming Regulatory Act (IRGA), gaming is regulated by the tribes, by the states and by federal agencies.

According to the IRGA, profits from gaming must be used in one of these five ways:

Distribution of Funds Transferred from Indian Gaming Operations to Tribes Number of Tribes, 1995

Source: United States General Accounting Office, Tax Policy: A Profile of the Indian Gaming Industry, May 1997, p.14.

• To fund Tribal Government operations or programs;
• To provide for the general welfare of the Indian tribe and its members;
• To promote Tribal economic development;
• To donate to charitable organizations; or
  
• To help fund operations of local government agencies.

Most tribes that are involved in gaming use the money to provide governmental services and community development. For example, they build roads, houses and water systems, and they provide health care and education. Many of them operate casinos mainly to provide employment for their members.

If a tribe meets all of the requirements above and decides to allocate per capita payments to members, it must first apply for approval from the Secretary of the Interior. About one quarter (73) of the tribes that have gaming actually make per capita allocations. Tribal members must pay taxes on these payments.

Casinos have created 400,000 jobs nationwide. 75% of those jobs are held by non-Indians. Tribes also share resources with neighboring communities and make charitable contributions.

The Harvard study found that conditions on reservations did improve from 1990 to 2000, and that they improved much more on reservations with casinos. The authors of the report ascribe this improvement more to the positive effects of self-determination than to an influx of cash.

For more information on casinos and gaming, see the bibliography for American Indian Gaming/Casinos created for this exhibit.