Off-Rez Casinos: Who really gets what?

Who could have ever predicted back in 1992, when my tribe opened Foxwoods Resort Casino, we would bear witness to the birth of a new Indian gaming industry phenomenon?

Fast-forward twenty years to today, and we now see a rapidly developed industry valued at $27 billion dollars with 240 tribes operating 460 casinos in 28 states.  It’s an industry touching about half of the U.S. population in some way, shape or form, and it’s evolution continues to transition as recent news reports feature a renewed push for Indian casino development far from tribal reservations – a concept not lacking in controversy.

According to a recent Sacramento Bee news article, many tribes are seeking to open casinos farther from home, assuming they would discover profitable alternatives for tribes in remote locations with reservations hundreds of miles from populated areas.  But not everyone is on board with this idea.

Senator Dianne Feinstein (California) is concerned with misinterpretations for the original intent for the 1988 Indian Gaming Regulatory Act (IGRA).  Feinstein believes tribes may be creating a “ticking time bomb” by seeking casino development opportunities hundreds of miles away from their reservation lands.

“I don’t believe anyone envisioned they would be able to go out and buy land to have casinos everywhere,” says Feinstein.  “Enough is enough…sixty casinos, it seems to me, is enough. More than enough.” Feinstein says, referring to Indian casinos within her home state of California.

“I understand that the intentions of the (Obama) administration are to help tribes. But it may be shortsighted,” said Sacramento attorney Howard Dickstein, who represents several tribes including the owners of Thunder Valley Casino east of Sacramento. “When you extend sovereignty, it dilutes sovereignty, which is a danger to the status of all tribes.”

Now I admit: I’m no gaming expert and I don’t have all the answers.  What I do have is a concern whenever I see a potential for major “red flags”.  For this reason, I came up with a few starter questions for the consideration of anyone having an interest in these matters, especially tribes.

Questions to ask regarding off-reservation casino development proposals

1. How will states profit from off-reservation casinos?

I’ll just go ahead and say it.  Some states’ economies have gone flat broke.

For this reason, it’s got to be tempting to look for unique ways to offset the growth of deficit spending, and some legislators believe gambling is one way to do this.  Moreover, there’s an assumption that, if casinos are opened close to populated urban areas, they will rake in higher slot machine revenues.  (Never mind the fact that Las Vegas was originally built out in the middle of nowhere…but I digress.)

Another point worth looking into is this: with off-reservation casinos, it seems likely that states will be able to tax casinos as business entities.  This is something they cannot do to reservation-based casinos, hence the reasoning behind “payments in lieu of taxes” via slot revenue agreements.  With reservation casinos, states are bound by the parameters of the legal agreements they entered into with tribes.

2. What will casino executives and developers gain from these deals?

There are a lot of casino executives and developers rotating within the gaming industry, both stateside and internationally.  Essentially, these savvy business folks are seeking out lucrative opportunities in which to personally gain from new networks and business contracts.

Simply put, these folks are typically non-Indians searching for ways to gain free access to tribal resources in whatever ways they can so they may profit from them.  And they are really, really, really good at what they do.

And I’ll just throw this out there as food for thought: it’s one of the oldest battles Native Americans have faced repeatedly over the last four hundred years.

Which brings us to the third elephant in the room…..

3. Will casinos built near heavily populated urban areas draw disproportionate revenue streams from low-income patrons?

When we built Foxwoods back in 1992, the vision was originally somewhat “Robinhood-esque”.  (I.e. to take from the rich and give to the poor.) The original idea was to build a 5-star world-class mega resort appealing to wealthy patrons (particularly those referred to in the industry as “whales”).  We would then leverage our revenues to build our tribe’s community infrastructure and offer benefits such as education, medical care, housing, childcare and employment, donate to worthwhile regional charities and open a world-class museum and research center. (Granted, that was the original vision…it is not what we have now.  But that’s an issue for another post.)

Every tribe has its own vision for economic development planning.  And so they should!  But wherever casino development is concerned, particularly off-reservation proposals, it is very important to discuss how the existence of casino gambling may potentially impact inner city communities in negative ways, as well as positive.  At some point, someone ought to ask:

“Are we really doing the right thing?”

It’s your turn: What are your questions, concerns, or thoughts regarding casino gambling on or off reservations?