Indian Gaming Today

Tuesday, October 23, 2007

Gambling and the American Moral Landscape

We’re excited to be the folks tapped to talk about the morality of Indian gaming at “Gambling and the American Moral Landscape,” hosted by the Boisi Center for Religion and American Public Life at Boston College on Oct. 25 & 26.

Specifically, we address moral policymaking and Indian gaming, arguing that Indian gaming is fundamentally different than legalized gambling and thus involves different considerations and imperatives for sound policymaking. The conference features presenters from Duke, Penn, Yale, Harvard (and, of course, the University of North Dakota!).

There will be panels on politics & policy (our panel), individual behavior and social impacts, theology and gambling, and gambling in American culture. Given the current controversy and media coverage of the same over Indian gaming as well as Gov. Patrick’s stance toward commercial casinos in Mass., the conference organizers are expecting significant press attention. (Of course, there's that World Series thingie, too....)

The Boisi Center website provides detailed information, including panels, speakers, links, and a gambling quiz, at




    A recent search of the Mid-Hudson Library System for books on Indian casinos yielded "Indian Gaming and Tribal Sovereignty, The Casino Compromise," (2005), University of Kansas Press, which promises much according to a back cover blurb: "Staying above the emotional fray usually surrounding this controversial subject, (the authors) succeed in making a comprehensive, balanced, and even entertaining analysis of the complex issues relating to gaming on Indian reservations."

    The co-authors are Steven Andrew Light, Associate Professor of Political Science and Public Administration at the University of North Dakota and his frequent collaborator, Kathryn R. L. Rand, Associate Professor and Associate Dean in the university's School of Law. They are co-directors of the Institute for the Study of Tribal Gaming Law and Policy, a component of the Northern Plains Indian Law Center at the School of Law, and are active writers, speakers, bloggers on casino issues, as well as consultants to federal, state, and local governments and interested groups. The Institute is said to be the only university-affiliated research institute dedicated to the study of Indian gaming.

    So here is another academic, non-industry examination of casino gambling, one, as might be expected by their use of the word "gaming" instead of "casinos" or "gambling", by scholars inclined to be sympathetic to the industry. And sympathetic they are, seeing gaming as an exercise of tribal sovereignty which enhances tribal self-determination and is an overall boon to the social, economic, and cultural life of tribes, as well to states and surrounding communities. It comes as a surprise to me to see this point of view from an academic source and I was particularly interested in examining their positions and arguments in the light of Earl Grinols’ decidedly critical posture. ("Gambling in America, Costs and Benefits," 2004)

    Their discussion of “gaming” is prefaced by a brief history of Indian-non Native relations, with its swings of empowering tribes and assimilationist policies, and an overall neglect of Indian interests. The Supreme Court in the “California v. Cabazon Band of Mission Indians” case in 1987 permitted a tribe to operate free of state (civil not criminal) regulatory control, lending legal support for the growing number of gambling operations of Indian tribes. This decision helped set the stage for the passage of the Indian Gaming Regulatory Act of 1988 which created a framework of tribal-state compacts to regulate casinos. The 1996 “Seminole Tribe v. Florida” weakened the hand of the tribes by making states immune from suits charging them with failing to negotiate compacts in good faith.

    While recognizing complexity and tradeoffs, Light and Rand broadly endorse the positive economic benefits of Indian casinos. “Although most obviously and directly affecting tribes, Indian gaming’s economic impacts
    extend beyond reservation borders. For nontribal communities the economic benefits derived from Indian gaming range from the tribal revenue sharing with state and local governments to the ripple effects generated by job creation and increased business and consumer spending.” They particularly emphasize the positive economic effects on Indian reservations themselves, distinguishing the vast riches of the “outlier” Mashantucket Pequots from the modest successes of tribes without access to nearby metropolitan markets.

    I confess an attraction for the argument that casinos can serve as springboards for further economic development which rescue tribes from welfare dependency, poverty, backwardness. This is especially true if reservation lands lie close to metropolitan areas or main interstate roads which are suitable for developments such as hotels, shopping malls, industries. The casino serves as a means of “primitive accumulation of capital” (which was historically associated with harms, such as the enclosures in England which forced peasants off the land) so that even if social harms outweigh the immediate benefits (my idea, not the authors’) eventually other economic development (conscientiously pursued) can bring about a net positive picture.

    The New York Times (11/14/07) reported on such a scenario on the Tulalip Indian Reservation next to a busy highway between Seattle (35 miles away) and Vancouver (100 miles away). Starting with a casino in 1992, the Tulalips have leveraged their profits into constructing a major shopping mall, an amphitheater, a second larger casino, a resort hotel and are seeking to build a bio-gas plant and develop an industrial and business property. I note that all this is on reservation land (not off-reservation land taken into trust), taxes are paid ( Washington collected $30 million in mostly sales tax last year), the tribe members benefit (unemployment rate on reservation 10% today, compared to 65 % in 1995 and countywide rate of 4.5%.) The glowing newspaper report omits a discussion of harms but in this instance possibly a casino can be justified in the long run.

    For their assessment of casinos’ impact on surrounding communities, the authors heavily cite the 1999 report of the National Opinion Research Center (NORC) at the University of Chicago which examined the impact of
    casinos between 1980 and 1997 on one hundred sample communities within a fifty mile range as well as a 2000 study (the Harvard Study) reexamining the same data, by Taylor, Krepps, and Wang, “National Evidence for the Socioeconomic Impact of American Indian Gaming on Non-Indian Communities,” In 1980 only five of the sample communities were near casinos; by 1997 forty-five were, thus offering the opportunity to assess the impact of casinos. The NORC study “found consistent and substantial net benefits and few if any aggregate harms accruing to communities with casinos.” The Harvard Study concluded that overall, the introduction of a tribal casino produced "substantial beneficial economic and social impacts on surrounding communities” especially in poor, isolated rural areas.

    I note the apparent greater sophistication and originality of Grinols’ economic analyses and his cautions about glowing assessments. “(There is) a tendency to state an industry's impact on regional jobs as an economic benefit without computing its significance in terms of value to area residents. Other common mistakes are to confuse business profitability with social profitability; to focus on the profits of the industry being added to the economy and to neglect to account for lost profits of other businesses; make unsubstantiated claims about unemployment; and to neglect to consider externality costs.”

    “Externalities” are social and economic costs associated with gambling which don't show up on balance sheets of casinos, such as costs of problem and pathological gambling, crime, competition with local businesses, traffic, loss of real estate and sales tax from land under Indian sovereignty, etc. While providing a table listing possible harmful externalities, Light and Rand examine in detail only three areas: pathological and problem gambling. crime, reservation quality of life. This restricted examination in itself defuses the impact of harms.

    Let’s look at the first two. The NORC study concluded that the presence of a casino in or near a community did not significantly increase crime. To the contrary, it appeared that crime rates were reduced, “but not in an overwhelming way.” The Harvard study, however, showed a substantial decrease in auto theft and robbery associated with proximity to a tribal casino, and other indications of decreased social ills (reduced welfare payments) perhaps relating to alleviation of poverty. Other authors are cited who cast doubt on the commonly perceived relation of casinos to crime.

    But crime is also a byproduct of pathological and problem gambling and should also be considered in that context. A South Carolina study of video-poker players cited by Grinols showed that the percentages of pathological gamblers who engage in criminal behavior (without complicating other disorders such as alcoholism or depression) were as follows: wrote bad checks, 54.4 %; stole, 37.1 %; arrested 41 %.

    Pathological and problem gambling are associated with a wide range of ills - crime, debt, unemployment, bankruptcy, marital discord, divorce, drug abuse, mental and physical problems, suicide, etc. In its
    1999 report, the National Gambling Impact Study Commission (NGISC ) reported that some 1.2 to 1.5 % of the population (3 million people) were pathological gamblers at some point during their lives while another 1.5 to 3.9 % of adults (between 3 and 7.8 million) were problem gamblers. Citing the NORC study, Light and Rand give the economic cost of each pathological gambler at $10,550 over his or her lifetime and a lesser figure for problem gamblers. That comes to a $4 billion societal cost for pathological and problem gamblers. (If the construction of a new casino stimulates the development of pathological or problem gamblers in its region those new cases can be attributed to the casino.)

    Now that's a lot of money but I kept thinking about the $10,550 for a lifetime of someone with a serious gambling problem. It doesn't seem high enough. I checked Grinols, welcoming a possible point of direct comparison on the issue. On page 167, Grinols estimates the average cost of a pathological gambler is $11,304 each year (2003 dollars). Each year! Compared to a similar figure in Light and Rand's book for a lifetime. I looked into it further.

    Grinols uses cost figures based on nine studies (everyone agrees that more studies need to be done and estimates are not accurate) which he cites in detail, one of which is the NORC study. The NORC study (on which Light and Rand rely) can be found on the web as an appendix to the report of the 1999 NGISC cited previously. Page 63 shows a table listing types of costs (i.e. unemployment benefits and the like) and past year and lifetime cost estimates. No estimates are included -none (they are too difficult to estimate) - for lifetime costs relating to job loss, unemployment or welfare benefits, poor physical or mental health, treatment of gambling addiction. Nor are any costs attributed to family costs (costs of divorce, separation, spousal abuse, child neglect and abuse) or “abused dollars” (gambling money acquired form family, friends under false pretenses, “loans” that are never repaid.)

    Obviously the $10, 550 figure is a gross underestimate of lifetime costs. Our authors should know better than to pass it off as an estimate; it is only a step in constructing an estimate. Taking Grinol’s figures for costs of problem and pathological gamblers, the total lifetime costs come to not $ 4 billion but an order of magnitude higher, perhaps to hazard a guess, $80 billion to $100 billion.

    In addition to downplaying costs, Light and Rand throw cold water on the idea that casinos actually increase the numbers of pathological and problem gamblers. “As one study puts it ‘in the light of the large extent to which gambling has been legalized in America over the past few decades, the failure to find an obvious pattern of increasing prevalence of pathological gambling should raise serious doubts about just how likely the disorder is to be triggered by increasing opportunities to gamble.’”

    Citing (not quoting) the NORC report, they go on to say “more Americans have been exposed to gambling...Between the national commission reviews -1975 and 1998-the proportion of Americans who had gambled at least once in their lives jumped from 68% to 86%. However, the percentage of Americans gambling in the past year increased only slightly, from 61 percent to 63 percent, in spite of increased availability of gambling opportunities. Together these finding suggest that while people are experimenting with gambling, this has not turned people into habitual or problem gamblers. Other have suggested that the availability of gambling has little or no impact on problem or pathological gambling prevalence rates because the origins of gambling addiction are tangled with other addictive behaviors unrelated to gaming.”

    Now this is interesting because the NORC report clearly states: “The availability of a casino within 50 miles (versus 50-250 miles) is associated with about double the prevalence of problem and pathological gamblers...This finding is similar to the overall level of past-year casino gambling (40% of adults living close to casinos versus 23 % of adults living 50-250 miles away)....” Grinols extrapolates social costs from these extra problem and pathological gamblers which in his view exceed the extra benefits to a region by a ratio of more than 3:1.

    A chapter “Indian Gaming in Context” examines “stereotypes...newly manifested prejudice and backlash,” mistaken ideas characterizing public discussion of Indian casinos. They criticize such notions as: “Tribes are composed of ‘casino Indians’”, “Tribes should pay their ‘fair share’”; “Tribal government cannot be trusted.” Anti-casino activists should look at these rebuttals to common arguments against Indian casinos. On the whole, the rebuttals are weak and rely heavily on ad hominem rhetoric (...tribes face substantial obstacles rooted at best in misinformation and ignorance and at worst in prejudice and ethnocentrism in their efforts to realize the promise of tribal sovereignty.”

    They rebut “Tribes are composed of ‘casino Indians’” by quoting the harshest critics who equate tribes’ search for federal recognition and casino-building (“Bet by bet, the Indians are scalping customers for millions”), asking us to respond to the “scalping” innuendo. They offer in rebuttal a single quotation from a chief ( will never be all about gaming.”) There is no objective examination of the relation between tribes seeking recognition and their casino-building ambitions. Regarding “Tribal Sovereignty is simply an unfair advantage”, Light and Rand, approvingly state:” Indian gaming is an exercise of sovereign governmental authority by Indian tribes.” Throughout the book this theme is repeatedly sounded, the authors clearly leaning to an expansive view of sovereignty favored by tribes (with broader casino building powers), rather than the “compromised nature of tribal sovereignty as defined by federal Indian law.” Can sovereignty, I wonder, be anything but “compromised” with small entities living in the midst of a large populous country? What does sovereignty mean when tribes are sovereign and their members can vote and lobby and run for office in U.S. elections ? If tribes are sovereign can they also grow and sell marijuana? Conduct foreign relations?

    A case can be made that this book overplays successes and downplays harms. Toward what end? The authors seek a reform of the Indian Gaming Regulatory Act (IGRA) of 1998, one that strengthens the hand of tribes, reduces the power of states, and puts the federal government in a stronger regulatory position so that it can better carry out its responsibility to the tribes. Thus, Congress could cap the percentage of gambling revenues that states can demand and empower the Secretary of the Interior to “consider whether both tribal and state sovereignty are adequately protected, that is, whether the terms of the compact appear fair and reasonable, taking into account tribal self-determination.” With their strongly positive view of gaming and expansive Indian sovereignty nothing stands in the way of facilitating as much as possible the unimpeded growth of the Indian casino industry.

    Arnold Lieber
    Saugerties, NY

    By Anonymous arnlieb, at Sunday, December 16, 2007 3:22:00 PM  

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