Special Report

Gaming Native American Gambling

The pursuit of sin profits goes off the reservation.

By 10.26.04

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American Indians make up less than one percent of the population. They tend to earn less and die earlier than the rest of us. But many of them are now profiting from the $17 billion Native American gambling industry.

In many states only federally recognized Indian tribes can run casinos. Federal law requires governors to negotiate agreements with tribes and creates a Native American monopoly where other gambling is banned. Private gaming interests recently unsuccessfully challenged that monopoly in federal court.

As of the end of 2003, 222 tribes ran 356 gambling operations in 30 states. Negotiations over state approval often are tortuous and lead to big-time political confrontations. Two complicated initiatives affecting existing gambling compacts -- which have set gaming tribes against the Governor in one case and against other gambling interests in the other -- are on California's November ballot.

IN FACT, NATIVE American gambling long has been a contentious issue in California. Tribes contributed $114 million to political campaigns between 1998 and 2001 alone. Gov. Arnold Schwarzenegger recently signed compacts with five tribes granting casino licenses in exchange for 25 percent of their profits, expected to run around $200 million annually.

The native American monopoly has created a curious form of tribal shopping, where gaming interests look for landless Native Americans as partners. As elsewhere, California helps lead the nation.

For instance, Garden Grove city officials recently considered using taxpayer funds through the Garden Grove Redevelopment Agency to subsidize a casino near Disneyland backed by Las Vegas casino developer Steve Wynn and a San Diego Indian tribe -- located 120 miles away.

Public opposition caused Garden Grove's city council to vote no. But the Detroit-based firm BarWest similarly approached the Los Coyotes Band of the Cahuillas and Cupenos about opening a casino in Barstow, a southern California community 125 miles away from reservation land.

Tribal chairwoman Katherine Siva Saubel explained that the ancient Cahuillas wandered the state, including Barstow. More to the point, Saubel's nephew, a tribal spokesman, commented that BarWest "is paying for it. They can put it whereever they want."

The Los Coyotes Indians have just 280 members on their reservation of 27,000 acres. The land is remote and undeveloped -- more suited to camping and off-road excursions than gambling. Earlier development proposals included a landfill. The Los Coyotes Indians understandably hoped for a revenue windfall from the $150 million facility. So did the city of Barstow. "Instead of being just a bathroom stop on the way to another destination, this will present Barstow as a destination point," said city spokesman John Rader. But why the Los Coyotes?

Another tribe, the Chemeheuvies, had previously proposed its own initiative. That nomadic tribe often lived in the Barstow area before members were settled on a reservation near Lake Havasu.

Barstow had approached the tribe a decade ago about building a casino. The tribe began planning development and seeking political approvals. Indeed, it already has filed land documents with the Bureau of Indian Affairs in Washington and negotiated a compact with the governor's office in Sacramento.

Even though the Chemeheuvi bid was more advanced, Barstow decided on exclusive negotiations with the Los Coyotes Band last year and in July approved a municipal services agreement for the prospective casino. However, city and industry scuttlebutt now suggests that the BarWest/Los Coyotes bid is dead, effectively if not formally.

BARSTOW'S RADAR EXPLAINS that the project is "stalled out," though the city still hopes for gubernatorial approval. Tom Shields, representing BarWest, says "We're continuing to move forward with this proposal," with the next stop the Governor's office.

But a top political source in Sacramento says "there are no negotiations going on and none are planned." Some observers suspect that embarrassed (and reelection-mined) Barstow politicians fear admitting that the deal is stillborn after promising to bring in jobs and money.

In fact, as Shields acknowledged, off-reservation projects "are a little trickier" than cases where tribes build on their own land. Radar acknowledges that Gov. Schwarzenegger has "indicated in the past that he does not want to see off-reservation casinos," though Radar contends that rural casinos raise fewer concerns than urban ones.

The Chemeheuvies seem to have stronger historic ties to Barstow. Deron Marquez, chairman of the San Manuel Band of Mission Indians near San Bernardino, favored the Chemeheuvies over the Los Coyotes because the former had ancestral lands nearby. The latter, in contrast, he complained, would effectively be taking his tribe's ancestral land.

"If anybody is going to take land into trust in this area, it should be us and not some foreign tribe," he added. Although Marquez's approval was not required, the Interior Secretary is to consider the interest of nearby tribes when deciding whether or not to approve putting off-reservation land in trust. Radar simply says: "We in the city don't get into claims of ancestral rights."

Sharing more geographic roots seems likely to encourage greater cooperation: In September Chemeheuvi tribal Chairman Edward "Tito" Smith made the case that tribal members and Barstow residents had the same vision of prosperity and self-reliance.

THE ARGUMENT FOR granting Native Americans a gambling monopoly grows ever thinner when tribes essentially become fronts for distant commercial interests seeking to locate in urban areas with no Indian presence. Some states have allowed tribes to establish casinos by claiming origination or ancestral rights to a wide area over which they allegedly once roamed.

But not California so far. Indeed, proposals for similar facilities in Oakland, Oxnard, Richmond, Vallejo, and West Sacramento remain stalled, lacking the necessary gubernatorial approval. Tribal attorney Howard Dickstein notes: "In California, the problem with those approvals is that they would create a precedent for scores of other tribes that are stuck in uncompetitive or commercially unusable locations."

The issue of native American gambling monopolies raises a host of critical state and federal issues that won't be resolved in one election or one court case. But the problems in California and elsewhere suggest that a good starting point might be to more strictly limit Indian gaming to reservations or ancestral land.

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About the Author
Doug Bandow is a senior fellow at the Cato Institute. A former Special Assistant to President Ronald Reagan, he is the author and editor of several books, including The Politics of Plunder: Misgovernment in Washington (Transaction).