- The Washington Times - Friday, April 21, 2000

For decades, American Indians viewed themselves as dependent on government, and consequently remained mired in the deepest poverty. But over the past 20 years, a new spirit of self-reliance and entrepreneurship has arisen in Indian country, with startling success. Central to this success has been Indian gaming.

About one-third of Indian tribes (189 out of 558) have established casinos on reservation land. The poorest tribes have been at the forefront of the trend. Of the 75 most populous tribes, 17 of the poorest 20 have opened casinos. Indeed, 4 of the 10 poorest counties in the United States now have Indian casinos, and 8 of the 10 poorest either have a casino or are next to a county with a casino.

Most of these casinos are not great founts of endless cash. But they have greatly improved the economic performance of the tribes who operate them, as documented in a study from the Harvard Project on American Indian Economic Development.

Gaming produces jobs and reduces unemployment for Indians. The tribes that opened casinos have seen their unemployment rates fall from 24 percent above the average for other tribes to 13 percent below that average. The Sault Ste. Marie Chippewas saw their unemployment fall from 55 percent before they began building a casino to 27 percent after three years of its operation. The Standing Rock Sioux similarly saw their unemployment fall from 79 percent to 29 percent.

Moreover, the Harvard study documents that these gaming jobs pay substantially more than most other reservation jobs. These new jobs and income result in plummeting welfare rolls on reservations with gaming.

But tribes are also using casinos as the first step on the economic ladder rather than the last. The Harvard study showed that tribes are using gaming revenues to provide start-up capital for non-gaming enterprises. The casinos also create new opportunities for non-gaming enterprises. For example, the Standing Rock Sioux have used gaming funds to build a hotel, RV park, recreation facility and a yacht marina that would not have been viable without the stream of casino patrons coming to the reservation.

Gaming revenues are otherwise used by federal law for tribal programs and services, analogously to state lottery revenues. Tribes use gaming funds to finance health care, education, social services and law enforcement, and to build housing, schools, roads, and sewer and water systems.

The surrounding non-Indian areas also benefit substantially from this economic development. Casinos, in fact, tend to create even more jobs for nearby non-Indians. For example, the casino operated by the Ho-Chunk Indians of Wisconsin employs about 400 Indians and 1,600 non-Indians. The casino operated by the Mississippi Choctaws employs 434 Indians and 1,766 non-Indians.

The surrounding region benefits as well by having a more prosperous reservation nearby rather than a hopeless sump of poverty. The newly employed workers and stream of casino customers spend money throughout the area. The casino itself tends to be a major local purchaser of supplies and services. In addition, as the region improves economically, property values increase.

All of this results in substantial new revenue to the surrounding state and local governments. The tribal government and those who live and work on the reservation are generally exempt from state and local taxes. But off-reservation spending produces new sales tax revenues. Employment of non-Indians produces new income and payroll taxes. Improving property values produce new property taxes.

Critics of Indian gaming often make unsubstantiated charges that casinos produce increased crime. But Indian gaming is the most heavily regulated of all, with tribal, state and federal oversight. Tribes recognize the need to maintain clean operations and use sophisticated, state-of-the-art casino surveillance and monitoring equipment.

Indeed, the casinos are so heavily scrutinized that criminals tend to avoid them rather than congregate there. Moreover, the improved prosperity and employment tends to reduce crime.

The casinos offer a recreation service that many clearly enjoy. Nobody goes out and drags people onto reservations and into these casinos. Some compulsive gamblers do abuse casino gaming, to their detriment. But just about very recreation opportunity, indeed every freedom of choice, offers the opportunity for abuse.

Some compulsive people spend to much time on the Internet, or watching satellite TV, or even pursuing their careers, to the detriment of themselves and their families. People abuse fast food, alcohol and even vitamins. The inevitability of such mistakes does not justify restricting the freedom of choice of adults to pursue their preferences, or the freedom of producers to make a living supplying an honest product properly enjoyed by many. Those rightly concerned about abuses should focus on helping and correcting abusers, not restricting the freedom of consumers and producers.

One Indian advocate expresses a common view in Indian country in saying: Since the first immigrant set foot on our land, gaming is the only economic development that has worked for the Indian nations. Taking away or restricting that opportunity for long-suffering American Indians would be unacceptably cruel, and that is widely recognized by the American people.



Peter J. Ferrara is general counsel and chief economist at Americans for Tax Reform.

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