Another Stereotype of the Month entry:
Another Stereotype of the Month entry:
By ELIE A. SHNEOUR
Voice Guest Columnist
Saturday, Nov. 12, 2005
First it was beads. Then came alcohol. Muskets were next. Since 1988, it has been casinos. Prodded by deceptive political and economic forces, the U.S. Congress, in its everlasting wisdom, that year passed and President George W. Bush signed the Indian Gaming Regulatory Act.
The idea was supposed to make Indian tribes more self-sufficient, and of course, reduce the large amount of federal tax dollars going to them every year. What the act did was not quite what it was purported to achieve. It has been bestowing billions of dollars on white stakeholders of Indian businesses and nothing to thousands of Native Americans living in poverty. Actually, the bill awarded hundreds of millions of dollars to small tribes consisting of as few as a hundred members and not a penny to tribes of thousands. Topping it all, the act allowed select Indian tribes to reap billions of dollars free of federal income tax while continuing to collect millions in taxpayer aid.
San Diego has the highest concentration of Indian casinos in the United States, and it is continuing to expand. There are some 557 American Indian tribes in the United States. Only about a quarter of them run some 411 casinos nationwide. They have earned the staggering total of $18.5 billion net in 2004.
It is unclear how much of that bounty has actually benefited members of these Indian tribes, because the structure and management of these casinos have not necessarily been under their direct control. Palefaces are behind a major segment of the management of these casinos. It is true that after decades of dependency on failed federal programs mismanaged by the Bureau of Indian Affairs, tribes of American Indians in 28 states have had enough. They have taken justifiable advantage of the new legal framework passed in 1988. Most experts agree that over the short term, Indian casinos have been generally beneficial for Indians. The long term presents an entirely different scenario for the Indian nations.
The sovereign legacy of the Indian tribes within reservation boundaries has been recognized by federal courts and granted them some but by no means all the attributes of a foreign nation. The special, albeit limited, nature of that relationship was established by Cherokee Nation v. Georgia in 1831 and by Worcester v. Georgia in 1832. A major asset provided Indian tribes by these landmark cases was the protection and preservation of their precious and unique cultural heritage, and a degree of independence from state and federal governments, particularly freedom from their taxing authority, and a still undefined measure of property rights.
The 1988 act coincided with a drastic ongoing change in the national legal climate for gambling. Gaming is a euphemism for gambling, with all the consequences that designation implies for all concerned. The first casualty that it brought to the Indian tribes was the unraveling of their notion of sovereignty, a precious privilege that Indian tribes won by bravery and by spilling blood, but that issue does not seem to remain within the memory of most California Indian tribes today. The trouble is that there is a limit to how long one can keep on multiplying casinos without causing an irreversible exchange of sovereignty and freedom to be Indians for the long-term problematical economic advantage of casinos.
In short, casino regulations and paying what amounts to taxes to state governments extinguishes the archetype of Indian sovereignty. The concept of Indians compelled to pay a "fair share" of revenue is loaded with traps. Revenue? You mean that the non-Indian syndicated casino management companies that operate without oversight and extract almost half of the revenue off the top should pay no tax? After that, what remains of the sovereignty of the Indian tribes?
There is more for Indian tribes to worry about. As casinos multiply faster than their customer base can, the eventual outcome must inevitably be to sharply reduce their revenue. The relatively lower-income gamblers who play most assiduously, the increase in traffic and pollution, the large indirect costs burdening society in general, and Indians in particular, are likely to prove unsustainable. Casinos will most probably not secure the long-term future of Indian tribes. Casinos belong in the same class as beads, alcohol and muskets. They are likely to prove not much better than a temporary snare and an extravagant delusion.
Dr. Elie A. Shneour, a native of France and a WWII U.S. veteran, is president of Biosystems Institutes, Inc. and Research Director of Biosystems Research Institute of San Diego, with divisions near Paris and Osaka, Japan.
Rob's reply
This French doctor evidently knows little or nothing about Indian gaming.
>> the U.S. Congress, in its everlasting wisdom, that year passed and President George W. Bush signed the Indian Gaming Regulatory Act. <<
It was George H.W. Bush, not George W. Bush.
>> What the act did was not quite what it was purported to achieve. <<
Wrong. It was supposed to help the tribes who chose to pursue gaming. And so it has.
>> It has been bestowing billions of dollars on white stakeholders of Indian businesses and nothing to thousands of Native Americans living in poverty. <<
"White stakeholders" may have earned a couple billion dollars through management contracts they signed with tribes to run casinos. The amount that outsiders can earn is capped at 30%. This is explicitly part of IGRA, so IGRA is achieving what "it was purported to achieve."
As for the thousands of Natives living in poverty, IGRA intended gaming only for tribes who thought it would be economically beneficial. If tribes declined to pursue gaming for cultural or economic reasons, that was envisioned by those who passed IGRA. So again, the result is explicitly part of IGRA.
>> Actually, the bill awarded hundreds of millions of dollars to small tribes consisting of as few as a hundred members and not a penny to tribes of thousands. <<
Actually, the bill didn't "award" anything to anyone. Tribes got the money the good, old-fashioned American way: by risking their capital in an investment for the chance to earn profits. Other tribes elected not to risk their capital for the chance to earn profits. IGRA created an opportunity that some tribes took and some tribes didn't.
Schneour admits that gaming tribes have earned $18.5 billion. So how is it possible that "white stakeholders" earned "billions," even though their earnings were capped at 30%, while the tribes earned only "hundreds of millions"? Whether intentionally or not, Schneour has misstated the numbers to make it seem as if the "palefaces" are ripping off the Indians.
The "not a penny" claim is false too, since Indian gaming has had a "rising tide" effect on all tribes. Non-gaming tribes benefit because gaming tribes give them charitable grants or award them business contracts. And because the BIA redirects limited government funds from the rich tribes to them.
>> Topping it all, the act allowed select Indian tribes to reap billions of dollars free of federal income tax while continuing to collect millions in taxpayer aid. <<
Topping all of Schneour's misstatements, IGRA did nothing to change the tax status of tribes. As governments, tribes don't pay income taxes any more than states or cities do. If individual Indians get per capita payments from gaming, they pay the same federal income taxes as non-Indians.
Also, the federal money received by tribes generally consists of treaty payments, not "aid." Tribes gave away their land in exchange for these payments, and the US is welcome to give back the land if it doesn't like the deal.
As stated before, there's nothing "select" about the tribes that conduct gaming. Every federally recognized tribe is eligible to pursue gaming if it wants to. No one is selecting the participating tribes except themselves.
>> It is unclear how much of that bounty has actually benefited members of these Indian tribes, because the structure and management of these casinos have not necessarily been under their direct control. <<
Yes, it's unclear whether it's 70%, 80%, 90%, or 100% of the $18.5 billion total. But you can be sure it's in that ballpark.
>> Palefaces are behind a major segment of the management of these casinos. <<
Companies that manage Indian casinos don't control where the money goes. They control how it's earned, they give 70% or more of the earnings to their tribal partners. The tribal governments determine how this money gets used.
>> Most experts agree that over the short term, Indian casinos have been generally beneficial for Indians. <<
True, but you couldn't tell that from the second dissembling paragraph of Schneour's essay. So what's the problem? Casinos benefit tribes...end of story.
>> The first casualty that it brought to the Indian tribes was the unraveling of their notion of sovereignty, a precious privilege that Indian tribes won by bravery and by spilling blood, but that issue does not seem to remain within the memory of most California Indian tribes today. <<
True, some tribes have sacrificed some aspects of their sovereignty to gain favorable gaming arrangements. They're probably keenly aware of what states have forced them to do so they could provide for their members' welfare. If they're not, other tribes continue to remind them of what they're sacrificing.
>> The trouble is that there is a limit to how long one can keep on multiplying casinos without causing an irreversible exchange of sovereignty and freedom to be Indians for the long-term problematical economic advantage of casinos. <<
I thought the problem was that Indian gaming wasn't helping enough tribes. Now the problem is that Indian gaming is harming too many tribes (by reducing their sovereignty). Well, which is it? Are too many tribes conducting Indian gaming, or not enough?
>> In short, casino regulations and paying what amounts to taxes to state governments extinguishes the archetype of Indian sovereignty. <<
I thought the problem was that Indian tribes weren't paying enough taxes. Now the problem is that Indian tribes are paying too many taxes. Well, which is it? Too many taxes or not enough taxes?
>> You mean that the non-Indian syndicated casino management companies that operate without oversight and extract almost half of the revenue off the top should pay no tax? <<
This is a flat-out mistake, or lie. Non-Indian companies pay all federal and state income taxes on the fees they earn from Indian casinos. There's no tax exemption for non-Indians whatsoever.
And what's with the word "syndicated"? These are regular casino hotel or consulting companies--for instance, Harrah's, the largest casino company in the world. There's nothing syndicated about them.
Clearly Schneour is implying these companies are part of a "syndicate"--i.e., a criminal mob. That's dishonest.
>> As casinos multiply faster than their customer base can, the eventual outcome must inevitably be to sharply reduce their revenue. <<
Gaming tribes recognize the risks as well as anyone. That's why they're diversifying their income into non-gaming businesses.
Related links
The facts about Indian gaming
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