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 Indians Loosing in Gambling Business

Indians losing in gambling business
Monday, September 4, 2000


Indian gambling revenues have exploded nationwide -- from $100 million in1988 to $8.26 billion a decade later -- but most Native Americans have little to show for it.

Although some tribes have increased reservation revenues and reduced unemployment, poverty continues to plague many casino-operating tribes across the nation, an Associated Press investigation has found.

From the Shoalwater Bay Casino in southwest Washington to the Apache Gold Casino in San Carlos, Ariz., it's the same story: Most casinos provide a few Indians with jobs, and that's about it.

Two-thirds of the Indian population belong to tribes locked in poverty that still don't have Las Vegas-style casinos. And of the 130 tribes with casinos, only a few near major population centers have thrived. Most make just enough to cover the bills, the AP analysis found.

Despite new gambling jobs, unemployment on reservations with established casinos held steady around 54 percent between 1991 and 1997 as many of the casino jobs were filled with non-Indians, according to information the
tribes reported to the Bureau of Indian Affairs.

Before the Shoalwater Bay Casino opened in 1998, the tribe's unemployment rate was estimated at 66 percent, said tribal chairman Herbert "Ike" Whitish. Today, about 40 percent of the tribal work force is still without work, he said.

"The big success of a few tribes is painting the picture that all tribes are extremely successful," Whitish said. "The majority of those (gambling) earnings are coming from about 5 percent of the casinos in this country."

At Shoalwater Bay, where the Tokeland Peninsula separates Willapa Bay from the Pacific, Whitish said "all revenue generated from the casino is being used to pay back debt to investors." It will be at least five years before income from the casino can be used for programs for the more than 200
members of the tribe, he said.

"Contrary to the opinions of certain . . . politicians, this tribe can say we are not getting rich off this casino and probably never will," Whitish said. "But it provides jobs for people who want to stay on the reservation and keep on working.

"If you want to look at the tribes in this state that are successful with their casinos, it's tied directly to their proximity to the I-5 corridor and major population centers."

The Lummi Tribe north of Bellingham learned the hard way about the importance of location.

"We were the first casino to open and the first casino to close its doors," said former tribal chairman Henry Cagey. The casino was located several miles from I-5 on a remote road fronting Puget Sound.

"The casino provided needed jobs and just enough revenue to pay the debt of the casino, and that's about it." It provided no money for tribal programs, he said. But while the casino was operating, "the unemployment and crime rates went down."

'No help' from casinos

In Arizona, the plaque outside Apache Gold Casino declares the $40 million hotel, golf and gambling resort has "helped enable the San Carlos Apache Tribe to give a better quality of life to its tribal members."

But seven years after the casino opened -- and four years after the debut of a glittering new complex -- many Apache families still crowd in small apartments or mobile homes.

The reservation's unemployment rate has climbed from 42 percent in 1991 to 58 percent in 1997, the latest year available. The number of tribal members receiving welfare has jumped 20 percent. And the tribal government still grants home sites without water and sewer connections.

 "We get no help from the casino, no money, nothing," said Pauline Randall,75, a lifelong resident of San Carlos.

Similar complaints echo across the 1.8 million-acre reservation in eastern Arizona, but they could just as easily be heard on many other Indian reservations across the country that have built casinos in the past decade.

"Everybody thinks that tribes are getting rich from gaming, and very few of them are," said Louise Benson, chairman of the Hualapai Tribe in northwestern Arizona, one of two tribes with casinos that failed during the 1990s.

For many of the tribes with Vegas-style casinos, gambling revenues pay for casino operations and debt service, with little left to upgrade the quality of life.

That's the case for the Jamestown S'Klallam Tribe on the Olympic Peninsula, said tribal chairman Ron Allen. Not long after the casino opened in 1995 hoping to attract tourists visiting the scenic splendor of the rain forest and Olympic Coast, the tribe had to lay off about 300 of its 500 workers.

"What our casino had to do was make some dramatic adjustments and downsize to meet the true market size," said Allen, who is first vice president of the National Congress of American Indians.

"Our business is turning around and is moving into the black," he said. "All that means for us is that we have the capacity to slowly begin paying off these huge debts."

It cost the tribe about $11 million to start the casino, and paying that debt sucks up all the revenue. The annual gross revenue is about $9 million, he said.

So far, the casino has never contributed to tribal programs or services never returned direct payments to tribal members. The only direct benefit is that about 40 members of the 495-person tribe work there.

"The casino is providing a few jobs that provide minimal income," Allen said. "It does not provide any meaningful revenues to assist the tribe in its social and community needs."

 Of the 500,000 Indians whose tribes operate casinos, only about 80,000 belong to tribes with gambling operations that generate more than $100 million a year.

Some of the 23 tribes with the most successful casinos -- like the Shakopee Mdewakanton Dakota Tribe in Minnesota -- pay each member hundreds of thousands of dollars a year.

In Scott County, which includes the Shakopee reservation south of Minneapolis, the unemployment rate plummeted from 70 percent in 1991 to just 4 percent in 1997.

Tulalips find success

Such success stories belong mostly to tribes with casinos near major population centers. The Tulalip Tribes, whose Marysville casino is located at an I-5 exit, has benefited greatly from gaming revenues, said tribal chairman Stan Jones.

"It's worked out real good," Jones said. "We've been able to build an alcohol- and drug-recovery home. We have our own Montessori school built with casino revenue. And everyone that wants to go to college gets their total college free."

The casino is so busy at times that its three-acre parking lot is not big enough, said tribal executive director John McCoy. The result is that gaming revenues pay for the bulk of tribal programs. And the unemployment rate of the Tulalip's 3,200 members has dropped from about 60 percent in 1990 to the
teens today, he said.

Most of the adults on the reservation can remember when people made their living fishing for salmon in Puget Sound.

"When fishing went down, people were out of work," Jones said. "And now we're employing at least 1,100 people at the casino, and we give all of them a health plan.

"Not every tribe is wealthy, and we are far from it yet," he added. "We still have so many programs to put into place. But a lot of the tribes out there are just starving. There are tribes that do not have any opportunity.

Location is everything. We're right along the freeway."

The tiny Mashantucket Pequot tribe of Connecticut reported more than $300 million in revenue in the first five months this year from its Foxwoods Casino, located between New York and Boston.

 In counties that have reservations with casinos, the poverty rate declined only slightly between 1989 and 1995, from 17.7 percent to 15.5 percent, the AP analysis found. Counties with reservations with no gambling saw their poverty rate remain steady at slightly more than 18 percent.

Nationally, the poverty rate hovered at near 13 percent during the period. Jonathan Taylor, a research fellow at the Harvard University Project on American Indian Economic Development, said many investments gaming tribes have made in social and economic infrastructure don't translate into immediate improvements in quality-of-life indicators like poverty.

"You see investments arising out of gaming taking hold slowly in greater educational success, greater family integrity, greater personal health, greater crime prevention," he said.

The AP analysis indicates casino gambling has slowed, though not reversed, the growth of tribal members on public assistance. Participation in the Agriculture Department's Food Distribution Program on Indian Reservations increased 8.2 percent from 1990 to 1997 among tribes with casinos, compared with 57.3 percent among tribes without them.

Tribes with established casinos saw their unemployment rate rise four-tenths of a point to 54.4 percent between 1991 and 1997, the AP analysis found. Jacob Coin, former executive director of the National Indian Gaming Association, said that's because 75 percent of jobs in tribal casinos are held by non-Indians.