Regulatory Updates

Indian Gaming: Victims of Success

John R. McCoy
John R. McCoy

by John R. McCoy, General Manager of Quil Ceda Village in Tulalip, WA and Washington State Representative, 38th Legislative District

For tribes in the Pacific Northwest, the 1970s and 1980s were times of dramatic change in their everyday lives. This was the transition from being fishing/hunting/gathering tribes to high-end destination entertainment and retail facilities. This transition has brought about hostility between tribes and their surrounding jurisdictions. As one of our tribal board members remarked one day, “Old money doesn't like new money.”

When Senators John McCain and Dan Inouye developed the idea of Indian gaming during the 1980s, they consulted with many stakeholders, including Tulalip Tribal Chairman Stanley G. Jones, Sr., about the possibility of gaming in Indian Country. This discussion began because the traditional methods of economic development in Indian Country were declining at a rapid rate. No longer could fishing, logging and sin businesses (fireworks, cigarettes, and alcohol) sustain tribal government operations.

Tribes entered into gaming with bingo in the very early 1980s. These operations provided jobs and a modest income to support tribal government operations. Tribes were experiencing the baby boom echo like all others societies and needed other avenues of economic development. Some tribes started to exploit their natural resources to bring in the added income, but these had limited economic gain, except for the Southern Ute that sits on top of the largest natural gas field in the United States.

The Senators and tribes discussed what other avenues would bring sufficient masses to the remote reservations for economic gain. The bingo model was reviewed and it showed that it provided much needed jobs and modest revenues for the tribal government. Thus, casino gaming would follow the bingo model and with it, some jobs and respectable revenue to augment other activities that tribes decide to employ.

Here is where the problem began. Indian gaming exploded across the United States, starting in Connecticut and crossing the plains to the West Coast. We still have to put this into context. Out of the 200 plus Indian gaming facilities, only 20% are making real money and the rest are following the bingo model of providing limited jobs and revenue because their reservations are far too remote to attract the masses like Connecticut tribes and others near population centers.

With the success of Indian gaming there have been attempts by states to get tribes to enter into revenue-sharing schemes. Some of these have been out right blackmail to the extent of offering off-reservation shopping. Governors, state legislatures and developers have tried to entice tribes to enter into agreements to revenue share if they allowed them to move near population centers and in some cases to jump over other tribes.

This activity has caused the U.S. Congress and state legislatures to introduce many forms of legislation to prevent expansion of Indian gaming near population centers. Senator John McCain wants to overhaul the Indian Gaming Regulatory Act (IGRA) of 1988 and give more power to the National Indian Gaming Commission (NIGC). The Department of Justice (DOJ) wants to change the Johnson Act and state legislatures want to usurp gubernatorial authority in compact negotiations by approving what has been negotiated when it includes off-reservation gaming. One of the basic tenets of IGRA is that tribes cannot do more than what states do for themselves.

In my opinion, if Senator McCain makes the changes he wants to IGRA (NIGC having full regulatory authority over tribes) and DOJ redefining Class II and III gaming devices, why should tribes negotiate with states? With these changes there is no reason for tribes to do business with states, and there are many tribes that did not want to negotiate with states to begin with. From what I have gathered from
Senator McCain's statements, he is not confident of states’ abilities to regulate Indian gaming. Every state has a different form of gaming regulation, giving the appearance that no one is really able to efficiently regulate Indian gaming. Washington State has an effective gaming commission when it comes to dealing with issues of the status quo but breaking new ground seems to throw the system into chaos.

The success of Indian gaming often puts tribes in the position of being the largest (or one of the largest) employers in the counties they occupy. This often gives tribes greater political and economic power then the dominate society wants them to have. Here in Washington State, a senator tried to pass legislation with would have prevented foreign corporations, foreign individuals or Indian tribes and individuals, from participating in the Washington State political process. Needless to say the tribes were able to beat back that ugly legislation.

With the ability of tribes to have the resources to participate in the political processes, there are individuals that try to take advantage of tribes. They sell themselves as having the ability to get access to the highest political powers in the U.S. Some can deliver this ability, but there are just as many unable to deliver and take advantage of the situation. Tribes must learn to be able to use their new found financial and political power to their advantage.

Campaign financing is a phrase that conjures up at lot of negative thoughts – back room smoke-filled meetings, gaining an advantage no one has access to or getting what you want. Whether it’s dog catcher, library board, school board, city council, county council, state wide office, state legislature or federal elected officials all it boils down to is access. As a state legislator, everyone has equal access whether they gave a contribution or not. At the end of the day - it is about the vote!

Once you sit down and review all the facts rationally, the current IGRA process is not broken. Since 1988 there have been only three off-reservation sites approved nationally and tribes only do what states allow them to do. Regulation is working and the revenues generated are enabling tribes to enter other forms of economic development, which IGRA was meant to do. Tribes are reducing unemployment by providing family wage jobs, not only for themselves, but for their surrounding communities. If everyone would put aside their differences and work together, everyone will succeed and we all will have a better place to live. Policy makers at the federal level ought not to let fear of one issue, which can be separately managed, upset a system that has brought economic improvement and hope to tribes and their surrounding communities across the nation.

John McCoy is General Manager of Quil Ceda Village in Tulalip, Washington and Washington State Representative 38th Legislative District. He is also Chairman of the National Caucus Native American State Legislators (NCNASL). John McCoy can be reached by calling (425) 350-5535 or email jmtulalip@aol.com