Opinion

Tim Giago: Budget woes for states mean bad news for tribes

Monday, September 5, 2011

As times get tight and budgets shrink, more states are looking at expanding gambling. State owned casinos are bad news for Indian casinos.

State government official are seriously eyeing the apparent lucrative casinos on Indian reservations and rubbing their hands together. Last year, the nearly 500 commercial casinos in 22 states brought in $7.6 billion in tax revenue for state and local governments. Now that’s not chump change.

One state that is taking a new look at gaming is New York State. Governor Andrew Cuomo, the former head of Housing and Urban Development (HUD) under President Bill Clinton, spent a lot of time in Indian Country. In fact he even visited the Pine Ridge Reservation in the last year of Clinton’s Administration. During his travels around Indian Country he witnessed the success of the casinos.

Gov. Cuomo is studying a constitutional amendment that would allow non-Indian casino gambling in his state, according to an article in Time Magazine. Governor Pat Quinn of Illinois is getting pressure from the state legislators to sign off on casinos in Chicago and in four other locations in the state.

In Massachusetts, lawmakers have introduced a plan to sell licenses for three new casinos and slot parlors with support from Governor Deval Patrick. Last year, Delaware and Pennsylvania legalized open-table gambling – games like blackjack and roulette – while Maryland opened its first casino, Time Magazine reported.

Across the border from Sioux Falls, (South Dakota’s largest city) the community of Lyon, Iowa opened a major casino just a few miles from the Sioux Falls city limits. The Indian casino that will feel the brunt of this venture is the Royal River Casino operated by the Flandreau Santee Sioux Tribe. Flandreau is about 45 miles North of Sioux Falls and many of its former patrons have now shifted their gaming activities to the new Iowa casino.

It was just a matter of time before state governments saw the opportunity to raise taxes for their dwindling economies through gaming. After all, Nevada legalized gaming in 1931 during the Great Depression and Atlantic City, N.J. turned to gaming casinos during the lackluster years of the 1970s.

But gaming also has its ups and downs. Established non-Indian casinos such as those in Deadwood, SD have steadily been losing revenues because of the economy. Casino owners also blame the drop in income on the smoking ban passed by the voters of South Dakota during the last election. Apparently it’s hard to gamble without a cigarette dangling from the corner of your mouth.

In South Dakota there’s a casino on every street corner in nearly every community. Indian owned casinos are not only hard pressed because of the competition, but are hampered by the state’s sparse population and the ridiculous obstructions of the gaming compact contracts they had to sign with the state government. For the Indian tribes in South Dakota, casinos are not the goose that laid the golden egg.

The Foxwoods Casino, operated by the Mashantucket Pequot Tribe in Connecticut, was founded under dubious circumstances. There are those who suspect money changed hands in order for the nearly non-existent Pequot to gain federal recognition that allowed them to move forward with a casino.

Even with the untold millions raked in by the casino over the years the Tribe found itself facing bankruptcy this year, and may, indeed, still be faced with that disaster. Bad business decisions and a troubled tribal government have placed the largest casino in America in jeopardy.

If the State of New York gets approval to change its constitution and moves forward with commercial or state-owned casinos in order to bolster its state-tax revenues, the biggest loser could be the Turning Stone Casino in Verona, N.Y., owned by the Oneida Nation. Thus far the Oneida Nation has held a monopoly in New York State, but for many years has been involved in a series of lawsuits filed by Madison County, where the casino is located. Unpaid taxes are the problem here. Madison County says the Oneida owes them millions and the Oneida say no.

But the Oneida may just be the first in line that would have to compete with state-owned or commercial casinos in its territory. State governments have been following the money flowing into the Indian casinos since 1988. Many years ago I wrote that it would not be too many more years before the states recognized a cash cow when they saw it and would want a piece of the action.

When state governments reach the point where they are cutting jobs, funds for schools and highways, and pension funds, it became just a matter of time before casinos took on a whole new shine. And so gaming, which used to be a crime in most states, is now a legal and lucrative business that may pull the states’ bacon out of the fire.

Tim Giago, an Oglala Lakota, is President of Unity South Dakota. He was a Nieman Fellow at Harvard with the Class of 1990. His weekly column won the H. L. Mencken Award in 1985. He was the founder of The Lakota Times, Indian Country Today, Lakota Journal and Native Sun News. He can be reached at UnitySoDak1@knology.net