And, It Has Only Been Thirty Years


Indian gaming is big business and getting bigger every year.  According to the annual Casino City Report by Alan Meister, the 474 tribal casinos generated $30.5 billion in gaming revenue in 2015, an increase of 5.5 percent over 2014.  By way of comparison, non-tribal casinos and VLTs produced $35.9 billion.  Since, 1990, commercial gaming has grown dramatically, but not as fast as Indian gaming in its relatively short history.  February 25th was the thirtieth anniversary of one of the most important events in the history of casino gaming in the United States.  In 1987, the Supreme Court ruled in favor of the Cabazon Band of Mission Indians in California v. Cabazon Band of Mission Indians.

In the mid-1980s, following the lead of other tribes, the Cabazon tribe turned to high-stakes bingo as a revenue generator.  The state of California objected, claiming gambling was illegal in California.  The case eventually reached the United States Supreme Court.  California argued that its constitution prohibited gambling and the tribe’s bingo was in violation of state law.  The court found that California did permit horse racing, poker and “casino nights” for charities.  The court determined that California did not prohibit gambling, but instead permitted and regulated it.  And therefore the court ruled the Cabazon Tribe and other Indian tribes were free to offer gambling without interference from the state.

That decision would have opened the door for unlimited Indian gaming.  But, the decision did not stand as written because Congress rushed to pass the National Indian Gaming Regulatory Act.  The intent of the act was to compel Indian tribes to negotiate the terms of any gambling activity with the state wherein the tribe’s reservation was located.  The subsequent agreement is called a compact and every tribe wishing to engage in a gambling enterprise must have a compact signed by the tribe and the governor of the state.  Compacts determine the types of games allowed and the rules and regulations for each game. Additionally, compacts cover whether or not the state receives any fees as mitigation for state and local services.  The states cannot tax tribes, but the agreements frequently include some type of payment and it is often a percentage of revenues.  In Connecticut for example, the tribes contribute 25 percent of their slot machine revenue to the state’s general fund.  In Florida, the Seminole tribe paid the government for exclusivity, a sum that amounted to $200 million a year until the present compact expired.

In April, WinnaVegas Casino in Iowa celebrated 25 years.   The casino in Iowa, belonging to the Winnebago Tribe of Nebraska, illustrates the importance of gaming to tribes.  The Winnebago tribe claims to have immigrated to Kentucky in 500 B. C., two thousand five hundred years ago.  It only moved into its little corner of Nebraska and Iowa two hundred years ago.  However, like most tribes, it had lost its traditional source of sustenance.  Indian gaming offered the Winnebago tribe what it offered to most tribes, a source of funding to maintain and strengthen its culture.   Just after the Cabazon decision, the tribe started to think about the possibility of opening a casino. The tribe did what many tribes were doing; it went to visit Indian casinos in other states.  They took what they learned and returned home to open a temporary facility cobbled together from prefabricated pieces and trailers.  Today, the tribe operates a 55,000-foot casino with a hotel, restaurants and convention space.  It is not huge, but it is a success for the tribe.

Also in April, Foxwoods Casino in Ledyard, Connecticut celebrated its 25th anniversary.  Unlike, the Winnebago or the Seminole, the Mashantucket Pequot Tribal Nation did not have either a large enrolled tribal membership or much land.  The tribe had existed in the region for hundreds of years, but by the end of the 20th century, it was a tribe slipping slowly into extinction.  The tribal membership had dwindled to a couple of hundred, but visionary tribal leaders thought gaming might save the tribe. The Pequot Nation did as other tribes were doing; it started with bingo in 1986.  Bingo was successful and the tribe wanted to move into casino gambling, but financing was difficult to find.  No conventional financing institution was loaning money to Indian tribes for casinos.  But eventually the tribe found a Malaysian casino operator, Lim Goh Tong.  He quickly recognized the potential of the location.  The casino which opened in 1992 was an instant success and began a two decade long series of expansions.  Today, Foxwoods Casino has 9 million square feet, 4,700 slot machines and 2,266 hotel rooms.

Celebrating a 25th anniversary, both the Winnebago and Pequot tribes illustrate just how important tribe gaming has been.  In California, Oregon, Washington, Minnesota, Wisconsin, Florida, Connecticut and Oklahoma, Indian casinos are major factors in the local economy.  But, at the same time Indian casinos represent significant competition for commercial casinos.  For example, the decline of casinos in Reno, Lake Tahoe and Laughlin can be attributed directly to the growth of Indian gaming in neighboring states.  But the real significance lies in the contribution to tribal culture.  There are literally dozens of tribes that, like the Pequot, were on verge of disappearing.  Casino revenues have helped them revive their culture and in many cases, their language.  It has only been 30 years since the Cabazon decision, but the reverberations have been huge both within Indian country and the gaming industry.

 

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