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States asking too much of tribes, leaders say
Wednesday, February 16, 2005

Indian gaming is growing by leaps and bounds but tribal leaders on Tuesday said their path to self-sufficiency is threatened by state demands for a greater share of casino revenues.

Tribal casinos took in $18.6 billion in 2004, the National Indian Gaming Associated reported in a new study. The figure represents a 10 percent increase over the $16.7 billion in revenues for 2003.

The money has been used to provide health care, law enforcement, education, housing and other opportunities on reservations, tribal leaders said at the National Press Club in Washington, D.C. "Simply put, we are self-sufficient again," said Doreen Hagen, the chairwoman of the Prairie Island Community in Minnesota.

But Hagen and others criticized a trend that has emerged in recent years. From California to Minnesota, state officials are pressuring tribes to share more and more of their casino revenues.

"Each year, the Prairie Island Community contributes more than $100 million to Minnesota's economy. We have accomplished this without government subsidies," Hagen said. "Yet we are constantly criticized for not contributing enough."

In Minnesota, Gov. Tim Pawlenty (R) demanded tribes renegotiate their compacts and share $350 million in revenues. He based the figure on the $10 billion he said the tribes take in at their casinos.

"That was off by 85 to 95 percent," observed Mark Van Norman, the executive director of NIGA. "So the expectations," he said, "are simply outlandish."

According to NIGA, tribes nationwide are making substantial contributions to state governments. In the new report, An Analysis of the Economic Impact of Indian Gaming in 2004, the organization said tribal casinos and their related businesses generated $1.8 billion for states in the form of state income taxes, sales and excise taxes and other payments. Tribes also contribute $100 million a year to local governments, the report said.

"True economic development always has meant giving back to the community," said Gregg Shutiva, the lieutenant governor for Acoma Pueblo in New Mexico.

Of the 21 states that have entered into compacts for tribal gaming, seven states require tribes to share a portion of their revenues. These include large markets like Connecticut, New York and California, where some tribes have agreed to pay 25 percent of their slot machine revenues to the state. In Connecticut alone, this amounts to about $400 million a year.

In 2004, Oklahoma became the latest state to adopt a revenue-sharing compact. The rapid expansion of the tribal casino industry there is expected to pour $71 million into the state's coffers every year.

But the states, many of which are suffering from budget crises, have not been willing to credit tribes for this influx of cash. In December, National Governors' Association released a report that failed to account for many of the payments states receive from tribal governments.

Next month, the Western Governors' Association is holding an executive summit on Indian gaming in Denver, Colorado. Among the issues to be discussed is the growth of the industry and its effect on states.

Last year, the Senate Indian Affairs Committee advanced legislation to limit how much states can seek under gaming compacts. The effort drew fire from California Gov. Arnold Schwarzenegger (R), who was in the midst of negotiating new agreements with tribes. His predictions for more than $1 billion for the state have fizzled into just $16 million this year.

The Bureau of Indian Affairs is charged with reviewing compacts for fairness to tribes. But since the start of the Bush administration, when revenue-sharing started to become a bigger issue, officials have only rejected one agreement. The agency let other revenue-sharing compact go into effect without approving or denying them.

NIGA Report:
An Analysis of the Economic Impact of Indian Gaming in 2004 (February 2005)

NGA Report:
The Fiscal Survey of States (December 2004)

Relevant Links:
National Indian Gaming Association - http://www.indiangaming.org
Western Governors' Association, Gaming Summit - http://www.westgov.org/wga/meetings/gaming.htm
National Governors Association - http://www.nga.org