Contreras: Indian gaming works

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On Oct. 17, 1988, President Ronald Reagan signed the Indian Gaming Regulatory Act, a bill passed by Congress to address the steady growth of bingo and card games in Indian country. Since then, more than 200 American Indian tribal governments have opened in excess of 300 gaming facilities in 26 states.

Indian gaming has grown into a significant industry, generating $22.6 billion in revenues in 2005. In the 18 years since IGRA was passed, policy-makers have asked the tribes and states that host Indian gaming facilities two recurring questions: What are the social and economic impacts of Indian gaming? How are tribal governments investing tribal governmental gaming revenues? What policy-makers really want to know is whether Indian gaming is working, and if so, how?

After studying Indian gaming for 14 years, I believe that Indian gaming works because of four core features – tribal governments initiate Indian gaming rather than having it imposed upon them; Indian gaming is an exercise of tribal sovereignty; Indian gaming creates a de facto tribal tax base, allowing tribal governments to fully fund their social programs; and Indian gaming supports “nation-building” activities, encouraging the creation of strong institutions of self-governance.

In its 1999 final report, “Gambling in America,” the National Gambling Impact Study Commission stated, “There was no evidence … suggesting any viable approach to economic development across the broad spectrum of Indian country, in the absence of gambling.” While the NGISC did not address the complex reasons why this is the case, it seems clear that what sets Indian gaming apart from a history of failed federal polities is the fact that it is a tribally driven initiative and not a federal program.

Until recently, economic development in Indian country was largely dictated by federal funding initiatives that lacked long-term vision and tribal appropriateness. When tribal governments began exercising their jurisdiction over gaming activities and developing the appropriate governmental institutions to do so, Indian gaming quickly became an economic development engine.

When Congress passed IGRA, tribal governments had already initiated gaming on Indian lands as a way to generate much-needed governmental revenue. In spite of the creation of new roles for other governments with an interest in Indian gaming, IGRA’s framers were clear in their recognition of fundamental aspects of tribal sovereignty. Indeed, IGRA reiterates that states cannot expect to directly benefit from Indian gaming through assessing a tax or fee on any Indian tribe as a condition of negotiating a tribal/state compact (or for any other reason).

Indian gaming rights are a clear expression of retained jurisdiction and tribal sovereignty. While some gaming opponents portray Indian gaming rights as a “loophole,” this portrayal overlooks the clear confirmation of tribal regulatory authority in a succession of Indian gaming court decisions, culminating in the Supreme Court’s 1987 ruling in Cabazon. The fact is that states’ jurisdiction over Indian nations is limited to what has been expressly delegated to them by Congress. Meanwhile, tribal sovereignty is inherent, meaning that tribal governments are assumed to retain jurisdiction unless expressly limited by Congress. The difference in these sources of power is significant and clearly upheld in IGRA and other federal law.

Economists agree that one of the fundamental reasons for the success of Indian gaming is that it allows tribal governments to break free of federal planning models in order to create an export-based economy (attracting people to Indian lands to gamble constitutes “exporting” gaming). It can be argued that the primary economic development component of Indian gaming is its ability to generate a reliable tribal tax base for tribal governments, often for the first time.

Indian gaming revenues allow many Indian nations to create and maintain basic tribal services ranging from law enforcement and health care to education and housing. Gaming is allowing tribes to take responsibility for a host of social programs that have never received proper attention from the federal government in spite of treaty provisions or funding promises. Recent research by the Center for California Native Nations describes the positive social returns from these investments for Californians on and off reservation lands.

In addition to funding essential tribal social programs, tribal governments are investing in “nation-building” projects, ranging from the institutionalization of government to the revitalization of cultural activities. Most analysis of Indian gaming focuses on the economic outcomes, claiming that Indian gaming is only “working” when tribes generate significant revenue streams. However, considering Indian gaming as solely an economic activity overlooks the second, perhaps even more critical, goal of IGRA: that of strengthening tribal governments through nation-building. For example, many tribes have chosen to separate their business and governmental functions through the creation of separate business boards. Other tribes are reforming their constitutions, instituting language programs and building museums. Taken together, these nation-building activities constitute a social and cultural renaissance of historic significance.

Indian gaming has a number of special features that set it apart from previous economic development ventures in Indian country. As nation-building activity intensifies, the long-term benefits of Indian gaming become more clear and permanent. As the work of Indian nations continues at a rapid pace, tribal governments are perfecting their strategies for simultaneously operating a government and managing economic development and cultural activities.

Academic research on Indian gaming finds that when tribes make their own decisions about what approaches to take and what resources to develop, they consistently out-perform nontribal decision-makers. Tribal governmental gaming has created a historical moment where tribal decision-makers are playing a more prominent role in Indian country than ever before, making Indian gaming the most successful Native nation- and economy-building strategy in American history. Indian gaming works because it recognizes that creating an economy and building a nation are mutually reinforcing activities. Most importantly, however, Indian gaming works because tribal governments themselves want it to work.

<i>Kate Spilde Contreras, Ph.D., is managing director of the Center for California Native Nations at the University of California, Riverside.