Tribes expand casino reach

SUNDAY, JULY 15, 2012

2011 ruling eases path to richer sites off reservations

WASHINGTON – After buying a new chunk of land 50 miles north of San Francisco, the Federated Indians of Graton Rancheria just broke ground on a new, Las Vegas-style casino. It will be the largest in the Bay Area, with 3,000 slot machines, 200 hotel rooms, a spa, bars, restaurants and parking for more than 5,000 cars.

In New York, the Shinnecock Indian Nation is considering Long Island as a site on which to build the Big Apple’s first tribal casino.

And in Airway Heights west of Spokane, the Spokane Tribe of Indians wants a new 13-story casino and hotel next to Fairchild Air Force Base, prompting fears that the city will become “Spo-Vegas.”

The plans are extraordinary for one reason: In all three cases, the tribes want to build their palaces on land that’s not part of their original reservations.

The expansions are the latest twist in the American Indian casino wars, and they mark a major shift for the tribes, which already run 385 casinos and bingo halls in 29 states.

Since the U.S. Supreme Court cleared the way for large-scale Indian gambling 25 years ago, tribes have been forced to keep the majority of their casinos on reservation land held in trust by the federal government, usually in remote regions far from public view.

But now, thanks in part to the Obama administration, American Indian tribes across the country are ready to bust out, bringing gambling to the same land that was taken from them so long ago.

In Oklahoma, the Kialegee Tribal Town went so far as to propose a casino half a continent away, on the coast of Georgia, on land that it said it once occupied, raising the specter of tribes going across state lines to pursue new gambling ventures.

Tribes are seeking to cash in on a loosening of the rules, announced in June 2011, when the Bureau of Indian Affairs junked a Bush-era requirement that a casino had to be within easy driving distance from a tribe’s reservation.

The decision by Larry Echo Hawk, who at the time was head of the bureau and is both an enrolled member of the Pawnee Nation of Oklahoma and a former Idaho attorney general, marked a clear win for the tribes, which have become big players in Washington’s power-and-money politics. In recent years, they’ve steered 70 percent of their political contributions toward the Democratic Party and President Barack Obama.

Casino opponents now fear that the tribes, with their sovereign status, will have far too much authority to do as they please on their new land, especially as they press for even less federal control. And from coast to coast, the tribes are finding plenty of resistance as they angle to get closer to big cities, busy freeways, military bases and even popular national parks.

In the small desert town of Joshua Tree, Calif., Victoria Fuller said she worries what might happen if the Twenty-Nine Palms Band of Mission Indians is allowed to open a new off-reservation casino near the entrance to Joshua Tree National Park.

“They could do anything they want,” said Fuller, the president of the Joshua Tree Community Association and a leading opponent of the plan. “They could put a 20-story building with spotlights on it, and we would have no say.”

Saturation could be within reach

The new push by the tribes is aimed at reviving a $28 billion-a-year industry hit hard by the recession. After growing at a brisk 14 percent annual rate from 1995 to 2007, gaming revenues have essentially stalled out, increasing by only 1 percent a year.

And it comes as the 240 tribes that run casinos face an onslaught of new competition, from states eager to get a cut of the gaming business with lotteries and new casinos of their own, to poker players who want Congress to legalize online gaming this year. The changes will allow tribes to move into new markets, creating competition not only for existing Indian casinos but also for gambling centers such as Las Vegas and Atlantic City, N.J.

The move already has ignited a debate over how quickly the U.S. will hit a saturation point with casinos. While polls show broad public support for gambling, some say the tribes are ready to push the envelope.

“The tribes are going to try to run the table, which means they’re going to try to move as many casinos off-reservation as quickly as possible,” said John Kindt, a gambling researcher and professor of business and legal policy at the University of Illinois. “It’s just all about the money, and the model is very simple: It’s to get as many slot machines as possible as close to maximum-population areas. They’re going to go everywhere.”

Art Reber, a retired professor from Point Roberts, Wash., and the co-author of “Gambling for Dummies,” said the market ultimately will determine whether the tribes are overplaying their hands.

“When you start sticking neon signs and huge casinos at the Joshua Tree entrance, it starts to get a little ugly,” Reber said.

California is center of the battle

The epicenter of the battle is in California, one of six states – along with Washington, Florida, Oklahoma, Arizona and Connecticut – that account for more than two-thirds of all Indian gaming revenue.

The Golden State already has more than 60 Indian casinos, the most in the nation. And when Democratic Sen. Dianne Feinstein of California introduced a bill last year that would make it harder for tribes to buy new land for gaming, she said the state could easily have another 50 casinos in coming years if Congress doesn’t stop them. Feinstein warned that another 67 tribes in the state were already seeking federal recognition, the first step toward getting a casino. And she said “the problem is only going to get worse,” with some tribes vying to open new casinos more than 100 miles from their tribal headquarters.

In many ways, the move marks the coming of age for Indian gaming, which started small with bingo halls in Florida in the late 1970s but then exploded in a way that few envisioned. But experts say it’s just common business sense for tribes to try to go to places where they can woo more gamblers.

“Just like real estate, it’s all location, location, location,” said Barry Brandon, the former chief of staff for the National Indian Gaming Commission and now a New York-based consultant who works with tribes.

Off-reservation gambling allowed

The 1988 law passed by Congress has always allowed off-reservation casinos. But they’re extremely rare, with only a handful approved by the federal government.

Backers say that dropping the “commutable distance standard” adopted by the Bush administration will lead to more off-reservation casinos and help tribes create more jobs. That, they say, is just as President Ronald Reagan and Congress envisioned when they passed the law allowing tribes to get into the big leagues of gambling.

But even some tribal officials are leery, worried that off-reservation casinos stray far from the original intent of the law, which they say clearly was aimed at keeping the casinos on reservation land.

“I think Indian gaming had good intentions – it was intended to help tribes, but there are ways that I think it can be used to get away from what its intentions were. We’ve been worried about off-reservation gaming,” said Chris Mercier, a tribal council member for the Confederated Tribes of Grand Ronde in Oregon. The tribe has gone to court to try to block its neighboring tribe, the once landless Cowlitz Indian Tribe of Washington state, from opening a casino on a 152-acre site it bought near La Center, Wash.

Because it still takes years to plow through the bureaucracy to actually open a casino, it’s far too soon to know whether the tribes will experience large-scale success in moving beyond their borders.

But the early signs are telling.

In California, gambling opponents say the new approach already has resulted in a flood of new applications for tribes to acquire more property. Casino opponents who are tracking the tribes’ activities said at least 137 applications from California are pending with the Bureau of Indian Affairs, which must sign off on the land transfers before casinos can be built. The bureau would not disclose how many applications it has received in other states or across the country and has yet to respond to a formal request for the data, filed in May by McClatchy Newspapers under the federal Freedom of Information Act.

Push to expand sparked feuds

With the financial stakes so high, the push to expand has ignited growing warfare among the tribes, which are quick to feud over everything from the placement of new casinos to whether smaller tribes that lack casinos will be allowed to enter the fray.

“Tribes are acting more like states now,” said Kathryn Rand, co-director and a founder of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota.

She said there already has been one big change caused by Indian gaming: Tribes can now spend millions on Capitol Hill and in statehouses across the nation to try to get their way.

Since 1990, the Indian gaming industry has made political contributions of nearly $58 million, with 70 percent of the money going to Democrats, according to the Center for Responsive Politics. And the tribes also have been spending heavily on lobbying, more than $20 million in 2011 alone.

“The thing that makes that remarkable is that 20 years ago it wouldn’t have occurred to anyone that tribes would ever have enough money to have that kind of political influence,” Rand said.

Opponents say the relaxed rules on off-reservation casinos are merely a payoff to the tribes, which have made the president their top recipient of campaign cash in the last two years. Obama was a favorite for the tribes even as a senator from Illinois: Among all senators who have served since 1990, he ranks fourth in contributions, with $259,000, trailing only Democratic Sens. Maria Cantwell and Patty Murray of casino-rich Washington and Hawaii Democratic Sen. Daniel Inouye. In 2011 and 2012, Obama has received $140,500 from Indian gaming interests, more than any other presidential candidate or member of Congress, according to the Center for Responsive Politics, a nonpartisan research group.

Opponents hope that both the courts and Congress ultimately will slow the tribes’ momentum.

Last month, the Supreme Court denied a request by Interior Secretary Ken Salazar to stop a lawsuit filed by a Michigan man who’s out to shut down the off-reservation Gun Lake Casino in southwestern Michigan.

In Congress, both Feinstein and Republican Sen. John McCain of Arizona are pushing bills to clamp down on off-reservation casinos.

Tribes are encountering many roadblocks elsewhere, too.

In California, a group called the Stop the Casino 101 Coalition has gone to court to try to block the Graton Rancheria tribe from building its off-reservation casino on a 252-acre site in Rohnert Park in Sonoma County.

In New York, the Shinnecocks’ drive to open a casino has run into a headwind from Democratic Gov. Andrew Cuomo and many state legislators who are pushing to have the state open casinos of its own.

And in Washington, the Spokane Tribe of Indians’ drive to open a casino in Airway Heights has encountered opposition from the military, from the neighboring Kalispel Tribe of Indians and from a group called Citizens Against Casino Expansion.

The Bureau of Indian Affairs is reviewing the Spokanes’ casino proposal. Meanwhile, the city of Airway Heights recently annexed the property in question and is supporting the casino proposal.

But even with the new policy change, Brandon, the tribal consultant, said tribes face a hard fight, noting that “getting land taken into trust off-reservation for gaming is a very, very difficult proposition.” He’s among those who argue that the current system is working and that there’s no need for Congress to get involved.

And with the change by the Obama administration, Brandon said, “You’re really kind of seeing the jam in the pipeline is being cleaned out.”

Kindt, the University of Illinois business professor who has testified on gambling issues on Capitol Hill, said the tribes are expanding their operations with “just the illusion of regulation and the illusion of control,” and Congress definitely needs to intervene.

“If Congress doesn’t step in quickly, this is going to take our economy further into the quagmire,” he said. “I wish it would work, but you can’t gamble your way into prosperity.”

With so many new proposals pending, Rand, with the University of North Dakota’s Institute for the Study of Tribal Gaming Law and Policy, said the tribes run the risk of a public backlash as more casinos move into higher-profile locations. But she said Indian gaming “is expanding not in a vacuum, but in response to a market.”

“Part of the reason – and perhaps the biggest reason – that we’ve seen such a rapid expansion in tribal gaming is because Americans love to gamble, and we have a much higher tolerance for legalized gambling than we did even 20 or 30 years ago,” Rand said.

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