Session 6:
Gambling on American Indian Reservations

Were we only to consider its size, American Indian gambling would simply fall within our earlier analyses of moral and economic concerns, analyses that have lead us to significant concerns about gambling. But we deal with tribal gambling in a separate section for reasons of law and history, reasons that make our analysis somewhat more complicated. Under our legal system, American Indian tribes have a distinctive status as "domestic dependent nations." To understand this label and its history is to understand much about the complex relationship between Indian nations, the Federal government, and the state government. The phrase contains a three-fold paradox: tribes are simultaneously "nations," and thus entitled to the self-determination that sovereignty entails; "domestic," indicating a different understanding of sovereignty than that recognized in foreign nations -- and more consistent with the independence of states in our federal system; and "dependent," representing the special fiduciary obligations owed by the federal government to the American Indian peoples.

The "dependent" aspect of this phrase dominated governments' attitudes toward American Indians through the nineteenth and well into the twentieth century. And as we all should know, the history of our governments' dealings with the Indian tribes has largely been a history of abuse of this trust relationship. Through obliteration, forced removal or assimilation, and gross mismanagement of tribal funds and resources, American Indians' vulnerable dependence has been rewarded with everything but due care. In the last half-century, however, emphasis has shifted to the first aspect: nationhood and sovereignty. Through legislation and judicial decisions, Indian peoples' rights of self-determination, especially on reservation property, have generally been reaffirmed.

Tribal gambling must be seen in light of this movement toward greater self-determination. Recognizing that few other sources of revenue offered hope, at least in the short term, of providing economic independence, some tribes began turning to gambling during the 1970s (paralleling states' moves in the same direction). (It is important to note here that many Indian tribes have not adopted gambling, and some members of tribes that have adopted gambling continue to question the wisdom of that decision.)

The legal story gets a bit complex at this point, but it's worth following: if their moral justification rested on the right of self-determination, the tribes offered a well-grounded legal defense as well. Since the 1950s, both Congress and the federal courts had struck something of a compromise between Indian sovereignty and state claims of jurisdiction over tribes in their midst. Where a state prohibits a particular activity under its laws, then the state may prohibit that activity on tribal lands as well; but where the state only regulates how that activity is conducted, then the tribe -- and not the state -- has power to regulate the activity on reservation lands. Because most states permitted bingo for charitable purposes, tribe started offering high-stakes bingo games during the late 1970s and early 1980s. When states sought to close down these bingo games for violating state rules on licensing, the value prizes, and operating hours, the tribes went to the federal court for protection. In a series of cases starting in the early 1980's and culminating in the U.S. Supreme Court's decision in California v. Cabazon Band of Mission Indians, the federal courts reaffirmed the earlier compromise and supported American Indian peoples' right to conduct gambling operations that were not prohibited under state law.

After Cabazon, gambling on American Indian reservations increased dramatically, both in terms of the tribes participating and the games offered. Though bingo still remained the most common form of gambling, a number of tribes opted for full casino-style gambling, including card games and slot machines. These tribes found their justification in the fact that many states permit charities to hold "Casino Nights." Where the state does not prohibit that type of gambling, tribes may regulate it as they see fit; so the tribes chose to "regulate" by opening their own casinos.

The next year, and under heavy pressure from the states to clarify the Cabazon decision, Congress passed the Indian Gaming Regulatory Act (IGRA). In addition to restating the basic principle announced in Cabazon (once a state permits a form of gambling, it may not regulate American Indians' use of that form of gambling), IGRA establishes federal oversight over Indian gambling (principally through the National Indian Gaming Commission), and also provides a structure for allowing state input into the approval process when tribes seek to adopt casino-type gambling. As one might predict, neither the tribes nor the states were happy with the outcome. The tribes felt that IGRA infringed on their sovereignty by requiring them to reach agreements (compacts) with states before opening casinos. And the states felt that Congress was forcing more intense gambling on them than they desired. State governments challenged IGRA's provision that allowed tribes to force states (through federal court lawsuits) to negotiate gambling compacts. And in Seminole Tribe v. Florida, the Supreme Court held that the compact provision violated the states' rights under the constitution. Seminole Tribe has not turned things in the states' favor, however. Both federal courts and the Department of the Interior (which administers IGRA) have ruled that once the compact provision is thrown out, tribes that cannot reach voluntary agreements with states need only receive permission from the Secretary of the Interior to open casinos.

Why should this convoluted legal tale be of special interest to Christians? On one hand, American Indian gambling raises concerns that are no different from non-Indian gambling. Tribal gambling increases the opportunities for compulsive gambling; and specific practices in tribal casinos offer no less encouragement for pathological gamblers than do non-Indian casinos. In addition, the economic consequences of tribal gambling seem consistent with the experience in other gambling markets: the casinos (and reservations) certainly profit from gambling; local areas receive some economic gain from the casinos (due principally to employment opportunities); but the regional impact tends to be ambiguous at best and economically destructive at worst (depending on how one calculates the costs of compulsive gambling). Money one spends in any casino is money that one does not spend on other goods and services in the economy. Since few Indian casinos operate as tourist destinations (unlike the Pequots' Foxwoods casino), most rely on gamblers from within the same state, if not within the same locality.

On the other hand, if any groups are justified in using gambling for economic development, it would be the Indian nations. Stripped of land and resources, many tribes were left in near total dependence on government support for bare subsistence. From their perspective, opposition to tribal gambling provides yet one more instance of oppression: just as with tribal lands a century ago, others seem to covet and resent any form of Indian wealth. The political reality of opposition to American Indian gambling over the last few years often bears out this suspicion: the most vocal opponents often are not those with principled objections to gambling, but the tribes' commercial or governmental competitors. Whether it is a major casino owner suing the federal government to stop Indian gambling, or Rhode Island attempting to forbid an Indian casino that would compete with its own future plans for gambling in the state, or New Mexico trying to shut down Indian casinos at the same time that it was starting its own lottery, envy seems a predominant reason for opposition.

But not all opposition to Indian gambling should be reduced to envy or hostility. When a number of church leaders, including ELCA Bishop H. George Anderson, petitioned Congress to study the impact of gambling, the Council of Native American Ministries admonished them for undermining Indian sovereignty. "The right of Indian Nations to determine their destiny and economic priorities is a foundational human right." The Council's statement, however (as well as both sides of the struggle between states and tribes over Indian gambling), overlooks the important first term in that ambiguous phrase "domestic dependent nations." Tribal sovereignty is "domestic" sovereignty, a right that is fundamentally and sometimes painfully interwoven with the life of the nation and the individual states.

Christians who examine the question of Indian gambling arrive at what seem to be directly conflicting considerations. On one hand, we recognize the history of federal and state governments' abuses of their power over American Indian tribes, and the important role that the right of self-determination plays in protecting the tribes against such abuses. On the other hand, we worry about the impact of any form of gambling on the vulnerable and on our common good, and are concerned about the expansion of gambling. The compromise solution established by IGRA is not perfect. Aside from general concerns about gambling's effects, many worry that tribes are being exploited by non-Indian gambling companies that own or manage the reservation casinos, although some tribes both own and manage their own gambling establishments. But the current rough compromise does account, at least in part, for our conflicting considerations. If a state chooses -- out of concern for the vulnerable and the common good, which includes American Indians -- to prohibit gambling, then it should be able to prohibit gambling on reservations within its borders as well. However, if a state chooses to permit certain forms of gambling, then American Indian claims of self-determination have greater weight, and tribes should be allowed to regulate their use of those forms of gambling.

For Discussion

1. Are any American Indian tribes located near your community? Do these tribes offer gambling? If you are an American Indian living on a reservation, does your tribe offer gambling? If so, in what forms?
   
2. Do you agree with the compromise solution suggested by the federal laws governing Indian gambling? Some criticize IGRA's prohibition/regulation distinction because they feel that it unfairly privileges Indian gambling over non-Indian gambling. For example, if a state allowed only low-stakes (e.g., no more than $2 bet) charitable "Casino Nights," tribes within that state would be allowed to operate casinos with no betting limits, should the tribes so choose. Do you think this solution is unfair? Do you think the differing treatments is justified by tribal self-determination?
   
3. Here we see again a question posed earlier: if the activity is not inherently wrongful, shouldn't it be used to achieve good consequences -- consequences that have often seemed unavailable by other means?
   
4. How can churches (and others) help to offer alternative forms of economic development?

Endnotes

1. The 1996 figures can be found in International Gaming and Wagering Business (August 1997). Two different sets of figures are used, which can be confusing at times. The larger figure is called the "wager" or the "handle"; this represents the total amount people bet -- that is, placed at risk. The other figure, net revenue, represents the amount gambling enterprises (whether casinos, state lotteries, etc.) actually earned from the wager. The rest of the money wagered was distributed to gamblers in the form of winnings. For information about the spread of gambling in the United States, using 1995 figures, see "A Busted Flush: How America's Love Affair with casino Gambling turned to Disillusionment," The Economist (January 25, 1997), 26-28; Martin Koughan, "Easy Money," Mother Jones (July/August 1997), 32-37.

2. "Gambling and the Public Good," Statement of the American Lutheran Church (1984). This statement, which is printed at the end of this study, provides the policy bases underlying this study. Neither the Lutheran Church in America nor the Association of Evangelical Lutheran Churches had a formal statement on gambling.

3. Of these pairs, the last two sets (casino table games and sports or horse track betting) involve some level of skill in assessing the odds. Outcomes of these "games" are not arbitrary in the same way as a lottery or slot machine. But the ultimate outcome still lies outside the bettors' control -- indeed if they were to manipulate the odds by, for example, paying a jockey to hold back, or stacking the deck of cards, they would justly be accused of cheating. See Ronald J. Rychalk, "Video Gambling Devices,"UCLA Law Review, 37: 555-593 (1990); Ronald J. Rychalk, "Lotteries, Revenues and Social Costs: A Historical Examination of State-Sponsored Gambling," Boston College Law Review, 34: 11-81 (1992).

4. The phrase is the title of an article by Gerri Hirshey in the New York Times Magazine, July 17, 1994.

5. The following history is drawn from Rychalk, "Lotteries, Revenues and Social Costs," 23-44. See also Robert Goodman, The Luck Business, (1995); Charles Clotfelter and Philip Cook, Selling Hope: State Lotteries in America (1989); National Institute of Law Enforcement and Criminal Justice, U.S. Department of Justice, The Development of the Law of Gambling: 1776-1976 (1977); I. Nelson Rose, Gambling and the Law: Endless Fields of Dreams (1993).

6. Both the Lutheran Church - Missouri Synod and the United Methodist Church have developed useful study materials on gambling. The Commission on Theology and Church Relations of the LC-MS produced Gambling in 1996; this study is available (for seventy-five cents a copy) from Concordia Publishing House, 3558 S. Jefferson Avenue, St. Louis, Missouri, 63118 (or call 800-325-3040). Casino Gambling is produced by the United Methodist Church and copies are available (for free) from the General Board of Church in Society of the United Methodist Church (call 800-967-0880).

7. David Krueger, "Play Money," Christian Century (November 11, 1992), 1022.

8. Luther expresses this vision of Christian liberty through his two (seemingly contradictory) propositions: "The Christian is perfectly free lord of all, subject to none. The Christian is a perfectly dutiful servant of all, subject to all." The Freedom of a Christian, Luther's Works vol. 31 (trans. W.A. Lambert, rev. Harold J. Grimm, 1957), 344.

9. Evangelical Lutheran Church in America, "Financial Stewardship Strategy: Report and Recommendation," (1993), 35-36.

10. Roger Dunstan, "Gambling in California," California Research Bureau (January, 1997): VIII, 2 (quoting Richard J. Rosenthal, American Psychiatric Association). See also the American Psychiatric Association's Diagnostic and Statistical Manual (DSM-IV), which provides a list of criteria for identifying compulsive gamblers (at 616-18). See Henry Lesieur, "Compulsive Gambling," Society (May/June 1992): 43-44 (describing the test for compulsive gambling under DSM-IV); Peter A. Setness, "Pathological Gambling: When Do Social Issues Become Medical Issues?" Postgraduate Medicine, 102/4 (October 1997), 13-18.

11. Sheila Blume, "Pathological Gambling: An Addiction to an Altered Psychological State," British Medical Journal 311/7004 (August 26, 1995): 522-23.

12. Rachel Volberg, "Prevalence Studies of Problem Gambling in the United States," Journal of Gambling Studies, 12/2 (Summer 1996): 117.

13. William Eadington, "Ethics and Policy Considerations in the Spread of Commercial Gambling," in Gambling Cultures: Studies in History and Interpretation (ed. Jan McMillan, 1996), 246-47; John Kindt, "The Economic Impacts of Legalized Gambling Activities," Drake Law Review 43 (1994), 73-77.

14. See H. Lesieur and R.J. Rosenthal, "Pathological Gambling: A Review of the Literature," Journal of Gambling Studies. 7 (1991) 5-39 (reporting that problem gamblers are 5-10 times more likely to commit suicide than the general population). See also Stephen Braun, "Lives Lost in a River of Debt," The Los Angeles Times (June 22, 1997), A-1; Larry Fruhling, "Addiction Leads to Tragic End," The Des Moines Register (March 25, 1997), 1-M.

15. Kindt, "The Economic Impacts of Legalized Gambling Activities," 85-86.

16. Kindt, "The Economic Impacts of Legalized Gambling Activities," 60-61; "Busted Flush," The Economist, 28; [Oregon] Governor's Task Force on Gambling, Final Report (October 4, 1996), 18-19.

17. Clotfelter & Cook, Selling Hope, 96; Alan Karcher, Lotteries (1989), 39-42; Jennifer Vogel, "The Sting: How the State Lottery Became the Worst Bet in Town," City Pages (August 4, 1993), reprinted in Crapped Out: How Gambling Ruins the Economy and Destroys Lives (ed. Jennifer Vogel, 1997), 72-73.

18. "Lottery Picks Split by Race, Income," Chicago Sun-Times (June 22, 1997), 2, 24-25.

19. William Galston and David Wasserman, "Gambling Away our Moral Capital," The Public Interest (March, 1996).

20. This deception occurs not only in advertising for particular games, but in the way that the lotteries themselves are "sold": by earmarking revenues from lotteries for popular state programs. Even though many states claim that their lottery revenues are directed toward beneficial purposes -- NY's "lottery for education," MN's funding for "the environment" -- close examination of state budgets reveals that lottery funds tend to displace general revenue funds rather than supplement them, meaning that the designated beneficiary often sees little if any benefit from the lottery. Indeed, the beneficiaries may actually suffer: for example, with citizens believing that the schools are benefitting from lottery revenues, they might be less willing to support needed bond issues for new buildings.

21. See the column on state-sponsored gambling in First Things, 15 (1991), 22.

22. [Oregon] Governor's Task Force on Gaming, 7.

23. William Eadington, "Economic Development and the Introduction of Casinos: Myths and Realities," Economic Development Review, 13/4 (Fall, 1995), 52-53.

24. Kindt, "The Economic Impacts of Legalized Gambling Activities," 72-73 (study of Deadwood, SD); Joseph Shapiro, "Gambling Fever," U.S. News & World Report, (January 15, 1996), 60-61; Ronald J. Rychalk, "The Introduction of Casino Gambling: Public Policy and the Law," Mississippi Law Journal, 64 (1995), 346-47 (on increased crime in Mississippi counties that have adopted gambling).

25. Goodman, The Luck Business, 96-100; John Kindt, "Legalized Gambling Activities: The Issues Involving Market Saturation," Northern Illinois Law Review, 15 (Spring, 1995) 271-306.

26. Nearly all gambling researchers agree with this assessment. Some, including John Kindt and Earl Grinols, would go further, however, and argue that when one looks at a national economy (or indeed anything beyond the local region), gambling will always produce negative economic consequences. See, e.g, John Kindt, "U.S. National Security and the Strategic Base: The Business/Economic Impacts of the Legalization of Gambling Activities," Saint Louis University Law Journal, 39/2 (Winter 1995) 567-84; Earl Grinols, "Bluff or Winning Hand? Riverboat Gambling and Regional Employment and Unemployment," Illinois Business Review, 51/1 (Spring 1994), 8-11.

27. International Gaming and Wagering, "The 1996 Gross Annual Wager," (August, 1997).

28. William Eadington, "Calling the Bluff? Analyzing the Legalization of Casino-Style Gaming," Institute for the Study of Gambling and Commercial Gaming (1995), 4.

29. International Gaming and Wagering Business, "The 1996 Gross Annual Wager." See also Stephanie Levin, "Betting on the Land: Indian Gambling and Sovereignty," Stanford Law and Policy Review, 8/1 (1997), 125-39.

30. National Indian Gaming Commission, Report to the Secretary of the Interior (November, 1996), 1.

31. Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17-18 (1831). The phrase was first used by Chief Justice John Marshall in this case, which involved the state's claim to all lands then held by the Cherokee people, and eventually resulted, in 1835, in the Cherokees' removal from Georgia along the "Trail of Tears."

32. Though the movement toward greater self-determination is a fair picture of what has happened, the legal story itself is far more ambiguous and complicated. Those interested in the legal developments should read L. Scott Gould's exhaustive treatment in "The Consent Paradigm: Tribal Sovereignty at the Millennium," Columbia Law Review, 96/4 (1996) 809-902.

33. California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987); Levin, "Betting on the Land," 126-27.

34. Wisconsin's story is illuminating in this respect. Before 1973, the Wisconsin Constitution prohibited all forms of gambling. That year, the constitution was amended to permit charitable bingo games. In 1975, the Oneida tribe started to hold bingo games under the state's "charitable use" regulations. After favorable court rulings in the early 1980s, the Oneidas converted their game to high stakes bingo. Then in 1987, two months after the Cabazon decision, Wisconsin voters amended the state constitution to permit lotteries and betting on dog races; the amendment was worded in a way that permitted a state lottery to offer any form of gambling. This amendment and the Cabazon decision opened the door for casino gambling on reservations. Once the state no longer prohibited gambling, the tribes gained the power to regulate it on their own reservations. See Wisconsin Public Policy Institute Report, "The Economic Impact of American Indian Gaming in Wisconsin," 8/3 (April 1995) 8-13.

35. Seminole Tribe v. Florida, 144 S.Ct. 1116 (1996).

36. Levin, "Betting on the Land," 127-30.

37. See Wisconsin Public Policy Institute Report, "The Economic Impact of American Indian Gaming in Wisconsin," 21-24.

38. Levin, "Betting on the Land," 134. Jon Magnuson, "Casino Wars: Ethics and Economics in Indian Country," Christian Century (February 16, 1994), 169-71.

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