The Economic and Social Implications of Indian Gaming: The Case of Minnesota

May 15th, 1995 | By | Category: 7-1: Tribal Colleges Looking to the Future, Media Reviews

American Indian Culture and Research Journal 19:1 (1995)

Review by Jennifer Gray Reddish

The Price of Money

Indian gaming is big, and getting bigger. It is expected that in 1995 tribally-run casinos will generate over $6 billion, with net profits hitting $1 billion. Even a few years ago, this would have been unimaginable.

Dan A. Cozzetto examines the impact of gaming’s growth, brought about by the 1988 Indian Gaming Regulation Act, which legalized casino gambling on reservations. Although low-stake gaming and bingo (legalized in 1945) is an accepted part of many reservations, the 1988 act and subsequent rise in gaming profits has generated much comment and debate within Indian communities and between Native and non-Indian groups.

Within reservations, gaming remains controversial, Cozzetto asserts. It is either seen as the “new economic buffalo” by its supporters or as just another way for federal and state governments to infringe on reservation tribal sovereignty. Others worry about the long-term viability of casinos, fearing that the supply of casinos will soon exceed demand. Cozzetto notes that sixteen casinos exist in Minnesota alone.

In spite of complaints and fears for the future, the casinos have brought tangible economic improvement. They provide jobs for members. The number of welfare recipients has declined on the reservations while they have increased state-wide, for example. The tribes have also made social investments in drug rehabilitation and education from gaming profits, while diversifying their portfolios with other business ventures.

But there are social tolls as well. Cozzetto writes that 14.5 percent of Minnesota residents now have gambling addictions, compared to 3.5 percent nationwide—requiring the state to allocate funds for new and expanded rehabilitation centers. Cozzetto shows that studies link gambling addictions with drinking; 22 percent of the alcoholics on the reservations are also gambling addicts.

These statistics have fueled the often bitter conflicts over gambling between Minnesota and their reservation communities. Although legalized, Indian nations often begin their gaming ventures within a hostile environment. Banks tend not to aid reservation communities because of their inability to collect in the case of default.  Private investors tend to grant the seed-money through confusing, iron-clad contracts that enables them to exert excessive control. Many tribes have spent a large portion of their profits in litigation to get rid of such private investors.

The larger business community and state government has its own gripes with the Indian casino phenomenon. As Minnesota state senator Charles A Berg says, “Gambling can mean development, tourism and profits; but it can also mean broken homes, empty bank accounts and jealousy from those who do not profit.”

Cozzetto says the future of Indian-run casinos are in doubt and competition from non-Indian operations increases. He uses the push to legalize video lottery terminals in public facilities throughout Minnesota as an example. He says that such a move would close most of the casinos within three years, arguing: “Why would an individual travel from Minneapolis to Jackpot Junction Casino in Morton, Minnesota if that person could gamble on virtually any street corner in the Twin Cities?”

Cozzetto’s piece deals with a complex issue with ease, breaking down the main points for the layman to understand. He sheds light on the rather unstable profit venue of these casino ventures, and the toll it can have on reservation communities— hinting that tribes may use the money to solve social ills but at the same time unintentionally create new ones in the form of gambling addictions and crime.

The author does not discuss the public relations headache created by reservation casinos. Because a small number of casinos do generate great profits, there is a popular perception that all Indians are now wealthy and, therefore, do not need support from the federal government or private sector. The truth, however, is that only a minority of reservations have casinos. In addition, most casinos do not bring in enough money to address all of the social, economic and educational needs of a tribe.

The American Indian Culture and Research Journal is available from the American Indian Studies Center, University of California, Los Angeles, 3220 Campbell Hall, Box 951548, Los Angeles, California 90095-1548. One year subscription: $25. Single copy: $7.

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