A bad bet on Indian casinos

Indian gambling has brought long-needed financial gains to Native American tribes as well as a measure of painful internal strife. In California, reservations where dilapidated mobile homes once dominated the landscape are now dotted with attractive new housing developments, playgrounds, and community, health and fitness centers. At the same time, according to academics and other experts on tribal affairs, gambling wealth has given new impetus to the disenrollment of thousands of California’s Native Americans from their tribes by others who want to maximize their share of the money.

Now, two casino proposals could open the door to a new era of Indian gaming in the state. Two tribes located on difficult-to-reach reservations have received federal approval to operate hotels and casinos on land miles away, which would make these the state’s first Indian casinos located off existing reservations. The North Fork Rancheria of Mono Indians wants to build along a freeway outside Madera, and the Enterprise Rancheria of Estom Yumeka Maidu Tribe would place its casino near Marysville. Now it’s up to Gov. Jerry Brown to decide the matter, which he must do by the end of the month.

This represents a bad precedent for gambling growth in the state. Brown should reject both proposals and hold a firm line on tribes’ efforts to build off their reservations, especially when such casinos would be located in or near more populated areas. And changes in federal law are warranted to deter this from happening again.

BLOWBACK: This Indian casino isn’t a gamble

California voters have made their views on gambling clear. In 2000, they approved Proposition 1A to allow tribes to set up Las Vegas-style gambling on “Indian land.� Four years later, despite a $60-million campaign funded by gambling interests, voters rejected two initiatives to expand gaming in the state. One would have allowed slot machines in urban card casinos and at racetracks; the other would have lifted some restrictions on Indian casinos. In other words, voters liked gambling but preferred that it be contained. They wanted to empower tribal governments to lift their people out of poverty and make key decisions on their sovereign lands, which tend to be remotely located, but did not want to see the state’s cities and suburbs subjected to Las Vegas-style creep. At this point, there are more than 65 casinos among the state’s 109 recognized tribes. Many tribes have no casinos, but a handful have more than one.

The question is, what qualifies as Indian land? Voters may have thought that meant existing reservations, but those lands can be added to, even if the additions are miles from the original reservation. TheU.S. Department of the Interiorhas the authority to take newly purchased lands into trust for tribes. In such cases, the land is owned by the government but the tribe has sovereignty over it. That land also comes off the rolls of taxable property.

Under the 1988 federal law that allowed Indian gaming, construction of a casino off the original reservation can happen through a two-part process. First, the Interior Department must be willing to take the land in trust and determine that the casino is in the best interest of the tribe and not detrimental to the surrounding community; then the governor of the state must concur. TheGeorge W. Bushadministration set up tough rules for federal approval, including a requirement that the new land be within commuting distance of the reservation. The Obama administration, unfortunately, loosened the restrictions.

As a result, Native American leaders now have added incentive to seek out more conveniently located lands over which they can assert sovereignty. The two Northern California proposals are opposed by tribes with existing casinos on their reservations who see this as unfair competition. Their opposition is of course self-serving, and their operations should be as open to competition as any other business, but their warning that this could lead to “reservation shopping� is legitimate. If the success of their existing casinos is threatened by newer ones located closer to freeways or population centers, those tribes in turn have an incentive to seek more promising off-reservation locations, leapfrogging each other toward metropolitan areas.

Sen. Dianne Feinstein (D-California) has introduced legislation to tighten the rules. S 771 would require tribes to have both a modern and a historic connection to land where they want to build casinos, and would clearly define those connections. In addition, a bill by Sen. John McCain (R-Ariz.) would clarify the standards for these “two-part� applications. Both should be approved by Congress; as more tribes seek a share of gambling wealth, decisions about where casinos should be located should not depend on changes in philosophy from one presidential administration to another or one governor to the next. But there also should be some flexibility for tribes that are left in poverty because their reservations happen to be in particularly hard-to-reach locations. That could include allowing a small number of off-reservation casinos that are not close to urbanized areas. The state also could try to increase the number of revenue-sharing agreements between tribes.

Location could become less of an issue if online gambling, which many Americans already engage in via foreign websites, were legalized and regulated in the United States. Some California tribes oppose online gaming as competition; others would support it if laws gave tribes a near-monopoly on running such businesses.

There’s also a valid question about how much potential for growth remains for the state’s Indian casinos. Although revenue from gambling in other states has increased in recent years, an analysis this year found that it has dropped in California. That might simply be a result of the slow economy, but some farsighted tribes in the state are using casino profits to diversify into new, non-gambling ventures.

Indian gambling has become a well-heeled and powerful lobbying force in Sacramento. That makes opposing expansions politically risky, but off-reservation gambling isn’t a business the state should encourage as a growth industry.