Savvy tribal leaders offer up $12.5 million to the University of Minnesota for a new football stadium and for scholarships. It’s cash largely extracted from the pockets of poor casino habitués, the result of politically-gotten monopoly profits. Who says pay-to-play politics doesn’t pay off?
“Shakopee tribe’s gift is a jackpot for ‘U’”
Item: “. . . the $12.5 million gift announced last week by the Shakopee Mdewakanton Sioux Community [to the University of Minnesota] includes $10 million for the new stadium and $2.5 million for a scholarship endowment . . .”
– Minneapolis (MN) Star Tribune, Oct 23, 2007
Good deeds, such as this noble tribe’s gift to the University of Minnesota, deserve praise and certainly, a well-intended public thank you. Remember, too, this single tribe’s largesse ought to be called what it is — a generous manifestation of the gambling monopoly granted to indigenous tribes by the Indian Gaming Regulatory Act of 1988 (IGRA), then cultivated by a state-tribal compact in 1989 engineered by then-Minnesota Attorney General Hubert “Skip” Humphrey III.
It is a story steeped in corruption, a red flag on why monopolies of any sort ought not to be tolerated under an equal-justice-under-the-law system. It is also an indictment of pay-to-play politics.
A committee appointed in ‘89 by “Skip” Humphrey — yes, son of one-time Senator and Vice President Humphrey — granted Minnesota tribes the biggest gift of all times — tax-free status on gambling profits for their casinos. Forever! It is an open-ended compact. No expiration date. (Only Connecticut has a similar compact, but it requires payment of hundreds of millions to that state. Minnesota’s state-tribal compact grants tax-free profits endlessly, except for a trivial registration fee for state “inspections.” It amounts to the largest public tax-giveaway in state history.)
That Humphrey committee in ‘89, and certain state legislators since, have made certain that in-kind competition, such as slots at a local racetrack, would not diminish the enormous profits of tax-free tribal casinos in Minnesota. And it does not get better than tax-free, forever, for a business enterprise. (Sovereignty for all?)
This largest single gift to my alma mater’s athletic department ($12.5 million!) derives indisputably from untaxed tribal “gaming.” A lot is plucked from the desperately poor, down-on-their-luck jackpot-dreamers, gamblers of baby’s money for new shoes. Choices are being made, perhaps pathologically for some, afflicted with an urge to win on the cheap. Losers, not winners, are casino habitués.
The newspaper’s editorial lavishing praise on its huge advertiser (“Shakopee tribes’ gift . . .”) says, without foreboding or a hint of shame, it is “unfortunate that some critics have used [the gift] to reignite debate over non-Indian gambling in Minnesota.”
What? No debate? Why, one might as well put free speech on hold, or muffle it with money-gifts. Disagree? Get thee to a nunnery or something.
Don’t look now, but this hard and firm casino monopoly in Minnesota was formed, and today is preserved, by politicians of a certain stripe. More later on which party that is.
An ex-state senate majority leader, honorary member of an northern Ojibwe band, the Mahnomen, declares bluntly he’d never disturb what he calls “Indian gaming rights.” It’s as though these are enshrined in the Constitution, or in some immutable law. So firm is the grip of this moneyed casino monopoly in my home state, that a politically-preserved monopoly is called a “gaming right.” Wow! (Note: George Orwell lives.)
A local House of Representatives leader says that any debate on Indian gaming in Minnesota is a “nonstarter.” Off the table. So what if sound debate might solve the state’s financial woes? Add dollars to stressed education budgets? So what if a proposed “racino” for Canterbury Park, the state’s thoroughbred racetrack, promises $218 million in new state taxes, new jobs by the hundreds.
Indian casino interests, protected by a legislative safety net, trump even discussion of that ‘89 sweetheart Deal of the Millennium, a politically-gotten compact — a gift that gives forever, from the oh-so generous State of Minnesota.
It is the triumph of a moneyed special interest over public interest. And guess which party gets roughly 97% of nouveau riche Indians’ political contributions in Minnesota? Democrats — here called “DFLers” — short for the once-noble party of HHH, “Skip” Humphrey’s dad.
Back in 1995, a would-be local rival Indian casino was intended to enrich three impoverished Ojibwe bands at a nearby Hudson, Wisconsin, dog track. Raw political power exerted itself by Clinton appointees at the Bureau of Indian Affairs (BIA) to deny the poor tribes‘ casino application.
That pitiful episode triggered the last of the Independent Counsel investigations, one by I.C. Carol Elder Bruce, and led to Congressional hearings at which Interior Secretary Bruce Babbitt was grilled about his “inconsistent statements” about that rival casino in far-off Wisconsin. It remains, today, a millstone around the neck of the one-time Supreme Court hopeful. It is and remains a quite hidden American travesty, not much covered in liberal MSM, an offshoot of “hide-the-ball“ if news is not Democrat-friendly.
In the end, a shot at equal-opportunity riches for three poor Ojibwe bands in neighboring Wisconsin was killed. And a dog track was closed, its only chance of survival, dashed, with a loss of 200 jobs. They were victims of falling track attendance and wagering handle, and bare-knuckle play-favorite politics at BIA.
(Epilogue: Three Wisconsin tribes are still poor, with high unemployment, running their few ramshackle casinos and bingo halls off the beaten track in rural Wisconsin. Said one tribal chair about being ambushed at BIA in ‘95: “Something is terribly wrong in Washington, D.C., at the Bureau.“)
Poor Indians, you see, lack the “resources” to contribute mightily to political campaigns. Or for university football stadiums. Or for scholarships. Tax-paying Canterbury Park, a Class I public gambling venue, gets no slot machines. These are reserved for DFL-preferred venues, those Indian casinos that pay off handsomely — to DFLers. Some are more equal than others? (Again, Orwell lives!)
In the words of a GOP Senate Minority leader in Minnesota, not much reported in local media, a casino monopoly has “bought and paid for” the once-noble, “progressive” Minnesota political party, the DFL. ‘Tis a pity, really.
The last sentence in the Star Tribune editorial lavishing praise on the tribe’s generosity is richly ironic, no doubt unintended: “The [Shakopee] tribe’s leaders deserve more credit than they get.” Indeed.
Locking out competition, preserving a forever-monopoly, is a Herculean feat. Politics, it is said, makes strange bedfellows. In my native Minnesota, the State DFL aligned with friends in fabulously wealthy Indian casinos, play by their own rules, and thus are richly rewarded. Yet local news media, parroting the DFL, would have no debate, none at all, on a political entitlement now enshrined as a “gaming right.”
Someone ought to be mightily ashamed. Corruption never had it so good. Shhhh!
If you and I each put $10 on a table and, based on some random event, one of us gets all of it, has wealth been created?
what is truly redonkulous and shameful is the pequot “tribe” scam…
by the mid 1800′s when they actually counted the pequots, the average “pequot” was at least half non-pequot…by the time this scam took off a bunch of “pequots” were maybe 1/16th “pequot”…which means more like 1/32nd or 1/64th or less…
so at supposed pequot tribal meetings you see a bunch of white people and some black people playing indian…and who can blame them? they got it good! what a scam!
Sedonaman,
You’ve set up a false transaction there. There is no table game anywhere in any casino where pure chance will rob one person of his money and transfer it to another. Ever hear the saying, “The house always wins”? Well that’s because they do. There is no casino game besides poker that pits people against each other for their money. And even in poker the house gets their take. A portion of every bet (or an hourly fee, depending on the casino) is removed for the casino. That money is paying somebody’s salary. It’s going into one bank account or another. So has wealth been created?
More importantly: why is it wrong, in your opinion, to allow people to spend their money on gambling? Because they might become addicts? Do you have any idea how many people are addicted to alcohol? Tobacco? Shopping? Food? Pornography? They all have higher numbers of addicts than gambling. Are those people also being preyed upon and taken advantage of by greedy businessmen who just want to steal their money? Or is it okay to provide those products to the public? Studies indicate that 4% of people who gamble will become compulsive or “problem” gamblers. On the other hand, 1 in 12 people (8%) in the entire nation (bear in mind that not everyone in the entire nation gambles – that’s 4% of those who do) abuses alcohol or is alcohol dependent. This issue with conservatives has always been befuddling to me. People who purport to believe in free markets, personal liberty and personal accountability, to the point of defending other industries like alcohol and tobacco, believe that the government has a moral responsibility to put a stop to gambling. It’s the one area where the government should intervene. Makes a lot of sense. To that end, I had a difficult time understanding the author’s argument in this article. First, casinos are sanctuaries of evil, where poor people lose their kids’ college tuition because they have no choice in how they spend their money, of course. But at the same time, there should be more of them so that there’s an increase in competition because it isn’t right that the tribal casinos have a monopoly? It’s an odd argument coming from that perspective. Not incorrect or fallacious, just odd.
Patrick Mulligan:
“A portion of every bet (or an hourly fee, depending on the casino) is removed for the casino. That money is paying somebody’s salary. It’s going into one bank account or another. So has wealth been created?”
In my opinion, no. What did that “somebody” produce to justify his salary?
So people being paid for their services with revenue from people voluntarily wagering their money doesn’t create any wealth because you don’t believe that casino employees deserve a salary? Strange, that. Especially from the free-market conservative standpoint, like I said before. In answer to your question (“What did that “somebody” produce to justify his salary?”): That would depend. If you mean the casino manager, then handling the daily tasks and responsibilities of operating the business of the casino is what he did. If you mean the dealer or game operator, facilitating the wagering and maintaining the games is his job, so that’s what he did. If you mean the casino owner(s), well, he/they put forth the capital necessary to finance the operations of the casino. Additionally there’s the janitor, maintenance crew, restaurant and bar staff, parking attendant, floor manager, and hundreds of other employees serving their various functions. Explain to me why these people do not deserve a salary for doing their jobs? Let me see, we have labor, management and ownership. Three components present in every single business in every single industry. Why is it that this particular industry’s labor force do not deserve a salary for providing those functions? Does anybody deserve a salary for providing those functions? Under what circumstances? What makes it different? And furthermore, how has wealth not been created? What is wealth, as you define it? Economically speaking, it usually refers to dollars in bank accounts. Are dollars not going into bank accounts? Does how the dollars get to the bank accounts have any effect on whether or not they got there? Is wealth only created by certain kinds of dollars? Magical dollars? Special dollars? Where would one acquire those dollars?
Let me ask you some more questions: Does a bartender deserve his salary? Does the money he accepts for his salary create wealth? How about the bar owner? The manager? The accountant? Does their industry justify a salary? How about the entertainment industry? Does the kid selling movie tickets at the theater not deserve his salary because he’s facilitating a transaction for an intangible good that some people find morally repugnant and which carries no guarantee of satisfaction? Does a broker deserve his salary when all he’s effectively doing is facilitating a transaction that one could negotiate oneself and taking a fee for it? Like I said before, I’ve never understood the moral and ethical argument that you’re trying to make. Because the morals and ethics used to make it appear to be applied selectively and exclusively to this particular industry. Even secular liberal people have a very strange and ironic contempt for gambling. It’s even more ironic in the case of liberals, of course, since they believe in passing out birth control to 11 year olds in junior high because “it’s their choice when and where they want to have sex”, but they don’t believe that anyone is responsible or accountable enough to decide to spend their money on that evil, evil gambling. It’s lunacy.
“If you mean the dealer or game operator, facilitating the wagering and maintaining the games is his job, so that’s what he did. If you mean the casino owner(s), well, he/they put forth the capital necessary to finance the operations of the casino. Additionally there’s the janitor, maintenance crew, restaurant and bar staff, parking attendant, floor manager, and hundreds of other employees serving their various functions. Explain to me why these people do not deserve a salary for doing their jobs?”
You have fallen into the classical Marxist belief/postulate that the value of something is determined solely by the cost of labor to produce it. Seen any flying automobiles lately?
In addition to that, you claim that gambling creates wealth through related jobs. I could say the same thing (as others have) about a natural disaster, crime, and people on welfare. They all require an infrastructure that costs the rest.
Look, I’m not making any moral judgement here. In my original question, there was $20 before the hypothetical bet and $20 after the hypothetical random event (which could be something as simple as which of two birds on a fence flew away first – no casino, no staff, no capital required). In my opinion, wealth did not get created. You say it did. If so, what was it?
You still haven’t answered any of the questions I asked, and have resorted to nothing but rhetoric and name calling (typical of every other person with your perspective who I’ve ever had this conversation with). It is not Marxist to believe that one can buy and sell something wholly or partially intangible, and that the providers of such are entitled to the payment that they receive. The value of something is determined by the price that someone else is willing to pay for it, regardless of what it cost to produce it (in labor, dollars, or whatever else you wish to measure it in). That’s what a market is – a mechanism to determine the relative value of something to someone else. If you want to sell dirt, or air, or water, or time, or knowledge, or an idea, or a concept, or any material or immaterial thing, you are free to do so as long as someone is willing to pay for it. You don’t seem to understand how value is determined or what wealth is, from an economic perspective. Your example, just as the previous example you used, is fallacious because you are creating a false transaction that cannot ever take place in a casino. The two gamblers were wagering against one another and nothing was provided to the two participating gamblers by a third party. Consequently, nobody else has any claim to money based on that transaction. If they had voluntarily gone into a multi-million dollar building, filled with people and technology meant to facilitate a transaction and provide them each with amusement, comfort, security, whathaveyou, then that third party would be entitled to take something for the service that he provided. And when the two gamblers pay those people, transferring money from one party to another in exchange for whatever actual and perceived service was provided, it would seem in the customary sense that “wealth” had been created – money was exchanged voluntarily in an open market place in exchange for something either material, immaterial, or both. The only reason I can possibly conceive of why you and other conservatives of the same persuasion cannot understand this concept applied to this particular industry, yet readily understand and embrace it as it applies to every other industry, is that you have an irrational moral indignation towards gambling. Whatever the reason, I think my reasoning is pretty well established by my comments, and I’m not going to waste any more time attempting to explain it . Especially considering that you refuse to explain or justify your own position, or answer any of the questions I’ve posed. We both just keep saying the same thing (though I’m quite obviously expounding upon the original concept quite a bit more).
Patrick Mulligan:
“Your example, just as the previous example you used, is fallacious because you are creating a false transaction that cannot ever take place in a casino. The two gamblers were wagering against one another and nothing was provided to the two participating gamblers by a third party.”
I posed a simple scenario of a bet by two people, decided by a random event, and asked if wealth had been created; and if so, what was it. You keep introducing the additional factor of a casino and the activities of its employees who facilitate gambling. I conclude your position is that gambling must always take place in a casino in order for wealth to be created and that the wealth is created by the activities of the facilitators and not the actual gambling itself.
Sedonaman,
I’m no proponent of gambling even though I live in Nevada. In fact, I’m a pretty staunch opponent because I see the spin-off effects (just take a look at Nevada’s stats for high school dropouts, average wages, alcoholism and substance abuse, etc. It’s way out of whack on a per capita basis). Not paying state income tax is nice, but we still have sales taxes at the register and all things being equal, I’d rather pay my own way that relying on an “industry” like gambling to fund schools, roads, etc.
But if you are going to single out the gambling industry as not producing any tangible wealth and really only being the exchange of currency, then you need to also single out any other “product” where the thing being produced is an intangible known as entertainment.
What, aside form the moral issues, is the difference between a casino and Marine World, Legoland, or Disneyland in terms of wealth creation?
Sedonaman,
I think the simple answer here is that what was created was pleasure, and people are willing to pay for that. It brings to mind “the world’s oldest profession.”
Per a separate post that hasn’t appeared yet, I’m not going to weigh in on the moral implications of gambling. Personally, I hate it. But from a simple wealth creation standpoint, I don’t see much difference between a Casino and Disneyland. Both relieve people of their money in exchange for activities they deem to be pleasurable. Both have dozens if not hundreds of anciliary economic spin offs – air transportation, food service, lodging, rental cars, apparel and salons, souvenirs, etc.
But how would you ultimately argue that Disneyland creates wealth while the casino does not? Or would you argue that neither one creates wealth? If so, then doesn’t this essentially render the entertainment industry as a non-industry?