Wednesday, December 5, 2007

Indian Casinos: The Dark Side

Connecticut’s Foxwoods and Mohecan Sun, the two largest casinos in the world, showcase a boom in Indian casinos. Seemingly every pueblo in New Mexico has one. They provide employment, hope, pride, revenue, housing and healthcare for tribal members, taxes to the states, and growing political power for the tribes. Considering the 3½ centuries of discrimination and depravations against America’s Native Americans, they deserve whatever success they have achieved.

Prior to the casinos, the situation on most reservations was abject poverty, alcoholism, despair, and unemployment. Many tribes were not even recognized by the federal government, which in essence meant they had no separate rights under federal law. Most reservations were intentionally located on lands seemingly lacking in resources. A classic example occurred with the creation of the Colville Reservation in Washington. It was originally established on the eastern side of the Columbia River by Executive Order. Settlers promptly protested because of the high quality land on that side of the river so it was moved, again by Executive Order, to the western side of the Columbia.

Some reservations contained natural resources, such as oil and gas, coal, timber, and grasslands for grazing. A few, such as the Aqua Calientes in Palm Springs, were blest with an advantageous geographic location. Some scratched out a meager existence with “Indian Smoke Shops.” These sold not only tobacco, but also in some cases alcoholic beverages, such as beer, and fireworks. I remember decades ago when legal fireworks were sold in Washington State as “Safe and Sane,” but a local tribe advertised “Unsafe and Insane” fireworks.

Congress legalized the status of Indian casinos and gambling with the Indian Gaming Regulatory Act of 1988. States have very limited options in authorizing, regulating, and policing Indian casinos. Congress expressly gave them a highly subordinate role in regulating Indian gaming.

The casinos have changed the fortune of many tribes. Foxwoods, while not the first Indian Casino, has been by far the most successful. It is reportedly the largest grossing casino in the world, and pays 25% of its slots revenue to the state. About 400 Indian gaming facilities now gross over $25 billion.

Yet, as is often the case with great success, a dark side exists. Indian casinos are no exception. Although opponents warned of corruption, no reason exists to believe that Indian casinos will be any more corrupt than non-Indian casinos or any other human organization. Any questions about the morality and wisdom of gambling have already been resolved in most states through state sponsored lotteries.

A major issue is not the traditional forms of corruption, but political corruption. The successful Indian casinos are pouring millions of dollars into referendums and the campaign coffers of favored politicians. McCain-Feingold and other campaign laws do not apply to Indian tribes.

One of the lesser reasons California voters recalled Governor Gray Davis was his seeming obsequiousness to tribes contributing to his campaigns. His Lieutenant Governor was similarly tainted in the recall election as he unsuccessfully sought the Governor’s Office. Roughly 20% of all the funding in the recall election came from Indian tribes. Two tribes, the Viejas Band of Kumeyaay Indians and the Pechanga Band of Mission Indians, each directly poured over $2 million into the election.

Much of last year’s corruption scandal of Jack Abramoff, the disgraced lobbyist, was over Indian Casinos. Tens of millions of dollars were collected from several tribes either to facilitate or oppose new casinos.

Another problem, exhibited by a few successful tribes today, is to purge their rolls of members they suddenly and often arbitrarily decide do not in fact qualify as members. Tribes, not the federal government, determine tribal membership. The Supreme Court has held that a tribe’s right to define its membership is viewed as “central to its existence as an independent political community.”

Every “nonmember” removed from the rolls, sometimes it would appear with an electron microscope, sharply increases the payments to the ever shrinking band of remaining members. The exiled members are legally powerless to prevent these ousters, except by appeal to tribal courts. History and human experience teaches us to expect false claims and chicanery when sudden wealth flows into an entity, but that should not justify a purging of tribal rolls of families who have been accepted as members for generations.

On a related note, most tribes possess sovereignty. Tribal entities and tribal lands cannot be sued in federal or state courts. If, for example, you have a dispute with a Nevada or New Jersey casino, you can pursue your legal remedies in state and federal court. By way of contrast, your only recourse against tribal casinos will again be in tribal court, which may not seem a viable remedy to non-tribal members. Tribes also run ski slopes and hotels, such as the Florida hotel where Anna Nicole Smith spent her final days and hours.

Even worse, only 275 of the 360 federally recognized tribes have court systems. The rest will simply create a review committee on an ad hoc basis.

In one case a casino patron was injured by someone running through a casino, knocking her over. Her claim against the casino was rejected by the tribe’s defense counsel and insurer. Imagine her reaction in showing up to her appearance before the tribal panel, finding that five Council members who oversee the casino, sat on the panel and that the presiding judge was the defense counsel who rejected her claim.

If casinos wish to market their operations to hundreds of thousands, if not millions, of non-tribal members, then they should be prepared to answer in non-tribal courts for their wrongful acts.

They have a fear, clearly justified by history, that they will not always get a fair hearing in state courts. The bias can even be by supposedly impartial judges as well as jurors. In one Montana Supreme Court opinion, the Court opined that if the Supreme Court of the United States didn’t like this decision, then they could always reverse it.

The fear of non-tribal members is that they cannot get a fair hearing in tribal judicial systems. To the extent that tribes are engaged in large commercial enterprises dependant upon revenues of non-tribal members, they must be prepared to answer legally for the legitimate claims of non-members.

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