The ‘Untouchables’: Wealthy Tribal Casino Interests
by Gary Larson | View comments |
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The Indian Gaming Regulatory Act intended to improve the lot of impoverished Indians on reservations. Instead it created a new, superrich class of savvy capitalist Indians.
Eliot Ness’s “Untouchables” were incorruptible lawmen battling mob crime in 1930s Chicago. Some viewers of the ABC-TV series starring Robert Stack as Ness assumed the “untouchables” were the bad guys stalked by Ness’s T-men. Not so. That notion sprung perhaps from the safety net of crooked lawyers, bought cops and paid-off politicians in real life Chicago in the 30s.
Consider now a new class of “untouchables.” Not lawmen, certainly not gangsters. Far from it. They are ethical, upfront businesspeople, loyal, law-abiding Americans, suddenly wealthy beyond their wildest dreams.
They are the superrich who happen to own Indian casinos. Their forefathers, the first Americans, were cheated, lied to, lynched and murdered during the nation’s darkest hours. They were victims of the largest land grab in history, thus denied their spiritual homelands, then made to reside on barren patches called reservations.
Not until the Indian Citizen Act of 1924 did most Indians get to be citizens. Previously, a few property-holders were “conferred” citizenship under the Dawes Act of 1887. They had to renounce their tribal ties.
(Historical note: Black males became citizens formally with the Fourteenth Amendment in 1868. This Reconstruction amendment excluded “Indians not taxed.” Native Americans had to wait another 56 years for their shot at full rights, in 1924, five years after women gained theirs in the Nineteenth Amendment.)
Fast forward to 1988. A law signed by President Ronald Reagan changed things forever — at least for a fortunate few. The Indian Gaming Regulatory Act (IGRA) reshaped the landscape of legalized gambling. It invited Indians to participate fully in the American Dream. It swung open the door to casino-style gambling to every American tribe.
Infamously, IGRA set the table for a race-exclusive monopoly. In some states, including my native Minnesota, the new law fathered a casino monopoly, mostly tax-free, with no expiration. For a business enterprise, that is Nirvana; it does not get better than tax-free forever.
Designed as if by a committee, IGRA intended to improve the lot of impoverished Indians on reservations. Instead it created a new, superrich class of savvy capitalist Indians. No problem with that, naturally, but it left behind an underclass of still dirt-poor native Americans. Today, one-third on reservations live in poverty, their suicide rate four times other Americans, their high school dropout rate three times national average. Hope can be a rare breakout thing on reservations.
IGRA (Ig-rah) was compelled by California v. Cabazon Band of Mission Indians (480 US 2021987). Indians then running ramshackle bingo halls and card clubs, could engage freely in “gaming“ not prohibited by state laws, the Court ruled. Congress in effect codified Cabazon for all states.
State-tribal compacts set terms for certain types of “gaming” on reservations, and on land “taken into trust” (i.e., off tax rolls) for “Indian gaming“ (IGRA Sec. 20). Compacts had this in common: No state or local government units can “impose any tax, fee, charge or other assessment” on “Indian gaming” (IGRA Sec. 2710(d)(4)). As ordered by IGRA, this would lead to the largest tax give-away in our nation’s history. Who knew?
By early 1989, tax-free casinos started cashing in on the allure of gambling to Americans. Suddenly casinos were no more than a few hours drive. Since IGRA was signed, tribes launched 405 casinos in 28 states.
Last year these casinos enticed $19.1 billion in gross revenue, according to the Analysis Group, a respected Los Angeles-based research firm. Gross revenue means the “win/take” amount after payouts to so-called “winners.”
Now you may ask, how much do tribal casinos give to candidates for national offices? Gambling Magazine on May 14 reports:
In 2004, the casino-gaming industry ranked 35th among the 80 industries charted. . . accounting for $110.2 million in total contributions.
Of this amount, 6.6% came from the “Indian gaming subdivision.“ Your answer: $7.3 million to federal office-seekers. (Tidbit: Senator Tom Daschle collected $189,900 from tribes in his losing bid.)
At state levels, often not well reported, tribes with casinos ante up incalculable sums. Typically, but not always, the chief recipients are Democrats. That’s no secret. This known fact is muted by liberal mainstream media (MSM). Not eager to report non-Halliburton largesse, particularly to their Democrat Party allies, MSM tends to downplay or simply not report the lavish contributions from the wealthy tribes.
Minnesota tribes last year contributed $356,520 to Democrats in state races, and $11,000 (2.9%) to Republicans. These numbers, from the Minnesota Campaign Finance and Public Disclosure Board, go largely unreported. One Twin Cities’ TV station, the CBS-TV-owned affiliate, boldly stepped forward with the information in a “Reality Check.” Otherwise it was Katie-bar-the-door.
In an overtime legislative session, a “racino” — a racetrack-casino hybrid — was declared a “non-starter” by Minnesota Democrats. Why, it seems they’d shut down state government rather than yield to a “racino“ to compete with their generous benefactors. Dems called racetrack slots an “expansion of gambling.“ Media bit on it. What? Gambling at state-licensed Class 1 horse racing gambling venue?)
Thus was a casino monopoly preserved. So what if polls say 70% of Minnesotans want a “racino?” To heck with new taxes, too. Who needs $218 million in new taxes from a “racino” for an ailing state budget deficit? Democrats here as elsewhere are tax-hikers-and-big-spenders. Yet they leave on the table $218 million in taxes. Go figure.
Intransigent tribal leaders don’t budge much on sharing their newfound wealth, beyond public works on their reservations. No one, no law, says they must. Paying their fair share, whatever, seems a foreign — er, rather, a sovereign? — concept. Except in Connecticut, where Indian casinos chipped in $417 million in fiscal 2004 to state coffers, tribal tight-fistedness prevails.
Despite relative media silence, the public is “getting it.“ In California, the “pay-to-play” politics of Governor Gray Davis and his Sacramento pals, in deference to that state‘s 54 casinos, was decidedly a factor in his recall loss.
Gross revenues from California’s 54 — yes, 54! — casinos will soon eclipse Nevada’s. This trend will “create the richest people on earth,” predicts author Jan Golab in “The Festering Problem of Indian Sovereignty” in The American Enterprise, September 2004.
That’s a partial reality in Minnesota. Thanks to a sweetheart compact negotiated — if that is the word — under a Democrat attorney general* in 1989, each fully “enrolled” member of the tiny Shakopee Mdewakanton Sioux tribe is a millionaire-plus-plus. Each draws about $936,000 a year — called “per capita” — from casino proceeds. That’s a tidy $36 grand every two weeks in case you’re wondering.
Cost is no object to preserve legal casino monopolies. The stakes are sky-high. Casino profits over years will certainly aggregate into billions, with a proportionate loss in taxes. Meanwhile, MSM whine about the current President Bush‘s “tax breaks for the wealthy.” Rich irony in that, naturally, but who will tell the people? With MSM mute, who will tell Joe & Mary Taxpayer about the largest tax giveaway in their nation’s history? Will they be left to figure it out on their own?
* Minnesota’s attorney general in 1989 was Hubert H. (“Skip”) Humphrey III, son of the 1940s founder of the state’s Democrat Farmer Labor (DFL) Party, former Vice President Humphrey. On “Skip” Humphrey’s watch, the state inked compacts with its tribes providing for no state taxes, in return for limits on types of “gaming” offered on reservations — i.e., only blackjack and slot games. The compacts had no expiration dates. Only if both sides agree to re-negotiate can the tax-free feature be reviewed. Of course, only the foolish would re-negotiate such a deal — tax-free casinos, forever. Humphrey lost his bid to be Minnesota governor in 1998, finishing third in a three-way race to eventual “world-shocking” Governor Jesse Ventura. Second in that race was current U.S. Senator Norm Coleman (R-MN).
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