Chasing the Dream -- Steven Light and Kathryn Rand on Indian Gaming in North Dakota and the US

Kathryn Rand:

My name is Kathryn Rand. I'm the Dean and Floyd B. Sperry Professor at the University of North Dakota School of Law and also Co-Director of the Institute for the Study of Tribal Gaming Law and Policy.

Steven Light:

I'm Steve Light. I'm a political scientist at the University of North Dakota. I'm Co-Director of the Institute for the Study of Tribal Gaming Law and Policy. I'm also an Associate Vice President here.

Bill Thomas:

Thank you very much for agreeing to come in and talk. It's been interesting, In discussing this story with a few people, I find that they all had a very vague idea that somehow, something happened, and then it was legal to gamble on the reservations. I know that you've studied that extensively, and I wondered if you could just summarize for us, a little bit, what happened, what changed?

Kathryn Rand:

Sure. In the 1970's and 1980's, tribes started experimenting with some high-stakes bingo halls and card rooms on their reservations. As you might guess, those bingo halls and card rooms were operating outside of state regulations, so states tried to shut those down on the reservation. It all came to a head in a US Supreme Court case, California versus Cabazon Band of Mission Indians, back in 1986. The Court held that operating gaming on a reservation was an aspect of tribal sovereignty, and states could not regulate it. That led to Congress enacting some legislation for federal regulation.

Steven Light:

When Congress got into the act, it passed the Indian Gaming Regulatory Act of 1988, and that piece of legislation set forth some important policy goals to govern Indian gaming, and to provide for the regulation at three levels: The tribal level, state level, and the federal level. The main policy goals revolved around promoting tribal self-governance and self-determination; and also addressing some of the long-standing socioeconomic deficits on reservations related to poverty and unemployment and the like.

Bill Thomas:

How do the states come into it then, if the Federal Government had to step in because the different Native nations asserted that, "We have sovereignty. We can do this. You can't tell us what to do." How are the states involved now?

Kathryn Rand:

Right. IGRA is a compromise. Congress balanced federal power, tribal power, and state power. It created a jurisdictional framework for different types of gaming. What's called Class II gaming, bingo, falls solely under federal and tribal control. But Class III gaming, or casino-style gaming, that has a requirement of a Tribal-State Compact, so that the tribe and the state enter into an agreement that governs how those casinos will be operated on the reservations.

Bill Thomas:

How has that proceeded in North Dakota?

Kathryn Rand:

In North Dakota, we have Class 3 gaming. Each of the tribes with land within the state's borders has a Tribal-State Compact with the State of North Dakota.

Bill Thomas:

A separate one for each one of the tribes?

Kathryn Rand:

Yes. The compacts themselves are similar, but each one is an agreement, a formal agreement between the tribe and the state.

Bill Thomas:

How difficult were those to negotiate?

Kathryn Rand:

Well, in North Dakota, as compared to some other states, the process was relatively smooth. In fact, we entered into Tribal-State Compacts with each of the tribes in the early 1990's, just a few years after IGRA was passed. I believe that Governor Ed Schafer, at the time, was the one who implemented the compacts for the first time, and that reflected the relatively strong relationship that North Dakota has with each of the tribes, with land within the state. In other states, it's been a rockier process. Florida, California, other places, there's been a lot of controversy around the Tribal-State Compacts.

Bill Thomas:

As they talked about policies developing this new industry, or new placement of an industry, what were some of the policy issues that they were looking for? You mentioned briefly tribal sovereignty and development. Is there more discussion about that, that happened nationally as all this was roiling around?

Steven Light:

Certainly in the 1980's, after the Supreme Court decision that gave rise to federal legislation in the area, there was a lot of concern about how tribes would realize the American dream, and how tribal sovereignty would create comparative opportunities and competitive opportunities for tribes to reduce poverty, to reduce unemployment; to increase the educational attainment of those who live on the reservation; and to address the fact that reservations historically hadn't been places where there were lots of job opportunities and a tax-base that would help with economic development. Tribal sovereignty became the platform for government-to-government relations, and the platform for the creation of tribal casinos to address those deficits.

Bill Thomas:

How did fighting poverty and economic development get into this? Because I know on the reservations here, and in other places I've been, issues of high unemployment, low income, bad nutrition, access to health care, all the classic constellation of poverty have been big issues on the reservations. Did that get directly addressed in the debate and discussion around establishing Indian gaming?

Kathryn Rand:

Sure. In fact, the Indian Gaming Regulatory Act came at a time when the Federal Government's policy toward tribes was one of self-determination, where the Federal Government was working to empower tribes to address the issues on the reservation themselves, through their own governments, so that aspect is reflected in the Indian Gaming Regulatory Act. As Steve mentioned, the policy goals for the law itself are to increase tribal self-sufficiency, to build strong tribal governments, and to encourage economic development on reservations.

Bill Thomas:

Was there any different kind of discussion in North Dakota, or was it generally along those same lines?

Kathryn Rand:

For the most part, states followed what they were directed to do under the Indian Gaming Regulatory Act. When states entered into those compacts, they often were doing it because they were required to under IGRA.

Bill Thomas:

I'll be talking to some tribal leaders about their experience with this. I'm curious, asking you all as observers of the wider scene, were there different responses, different degrees of enthusiasm or interest on the different reservations in North Dakota?

Kathryn Rand:

Well, I think that statement is definitely true if we look at the national picture. For some states, this was a bit of a, "Okay. We're going to go ahead and do this. It seems like a good thing for our tribal communities as well as for the state." Don't forget that the tribal casinos have had economic impacts off of the reservations as well. Some states, I think, entered into those compacts with a win-win attitude. Other states were much more reluctant to do so, for various reasons. Some, because they didn't like the federal directive, and, others because they didn't like legalized gambling within their borders.

Steven Light:

One thing that it's important to remember in North Dakota is that the five tribes that have created tribal casinos really had very modest economic prospects in the first place. The opportunity to build small-scale tribal casinos and pilot those was something that I think tribes embraced. Each of the tribes in North Dakota has had the opportunity, over the years, to expand their gaming operations and also to increase the non-gaming operations that surround the casino - the hotels, golf courses, gas stations, the kinds of businesses that also create new job opportunities, and that's definitely happened over the years.

Bill Thomas:

You say that they had modest prospects, and that was because of location primarily; that they weren't near population centers? What were the issues?

Steven Light:

That's the case in North Dakota for all rural populations that some of the economic opportunities are limited, by definition, because of that. Certainly, the number one factor for the success of a tribal casino, in terms of economic opportunity and jobs, is location. It's all about the location and what is the potential customer base. In North Dakota, we're talking about more of a local, state, and a regional draw. Increasingly, over the years, the tribes have increased their non-gaming opportunities in an attempt to make their casinos more like the type of destination resorts that you'd see elsewhere, but, really, we're still located in the rural Great Plains, and that creates some constraints.

Kathryn Rand:

It might be worth saying, too, that, plainly, the levels of reservation poverty and the constraints on economic development that existed in the 1980's were a long legacy of federal Indian policy and the creation of the reservations in the first place. The Federal Government and the states had not figured out a way to raise reservation communities out of poverty for well over a century, when tribes started experimenting with gaming.

Bill Thomas:

It's interesting, of course, that it's a solution that came from the tribal side, not from the federal side.

Kathryn Rand:

That's right. Tribes are innovators. They've been innovators within the gaming industry itself.

Bill Thomas:

If you look at the North Dakota reservations and the gaming that goes on there and look at the national scene, is the principle difference just that we've got a lot less people to draw on here? How do we compare with what's going on around the country?

Kathryn Rand:

There are a number of different comparisons. It's important to know that Indian gaming is not uniformly profitable or uniformly successful across the country. It varies state-by-state, and it varies tribe-by-tribe. Different tribes have different needs. They might have come into gaming with different levels of socioeconomic deficits. Here, in North Dakota, all five of our tribes are relatively large, with memberships in the thousands and with existing deficits in terms of unemployment and poverty and educational attainment, as Steve mentioned. In other parts of the country, smaller tribes might have the ability to counteract those deficits more quickly. Tribes that are located near population centers, near San Diego, LA, Boston, New York City, their casinos would be more profitable, and we could see that they'd be able to have a greater impact, more quickly, at the same time.

Bill Thomas:

Again, I know that you both are observers of the national scene in Indian gaming. What are some of the topics now? What are some the things that people are discussing?

Steven Light:

The industry itself is about a twenty-nine billion dollar industry at this point, so it's a significant player, economically, across the United States. We're talking about over two hundred and thirty tribes that operate more than four hundred and fifty casinos across the US and in twenty-eight states. One of the key issues is the fact that this is a mature industry at this point. Within particular states, tribes have become significant political players. They've become significant economic players. They influence how elections occur.

The politics of Indian gaming is one issue. At the federal level, there are concerns about the expansion of Indian gaming as it's matured, and whether or not tribes located near high population centers are able to acquire land, have that land placed into trust and operate a casino on that land. So sometimes states have embraced that, local communities have embraced it. Other times, it's generated controversy.

Bill Thomas:

This is a question that could be answered with data, but also somewhat subjectively: how has Indian gaming worked in achieving its goals? The things that we talked about earlier, of sovereignty and development, what's your take on how it's going and how it's working out?

Steven Light:

Across the United States it's been a success. There's no doubt that, in terms of job creation and economic opportunities, it has changed lots and lots of lives on reservation communities. It's also provided for jobs for non-American Indians as well. For instance, just in terms of direct employment, the industry generated more than six hundred thousand jobs last year. As I said, it's a twenty-nine billion dollar industry. In North Dakota, in 2014, tribal casinos brought in about two hundred and thirty-seven million dollars, and that represented, in addition to non-gaming revenue of thirty-eight million dollars, one of the top economic engines in the states, especially when you think about the ripple effect, both on and off the reservation. So we can certainly count successes just at the level of jobs and revenue.

Bill Thomas:

North Dakota is noted ... Recently, we've seen the oil boom. Did that have an impact on gaming here?

Kathryn Rand:

One imagines it must have, right? The oil boom has impacted everything in our state. I'm not sure that we have any specific stories about how it has, other than the increase in population in western North Dakota and the draw on all kinds of resources, including entertainment resources that are available to those folks.

Steven Light:

We do see continued growth in the tribal gaming industry in North Dakota. It's one of the few states that continues to sustain that, albeit modestly. In 2014, gaming revenue grew by three percent in North Dakota, which was down from sixteen percent the year before. Nevertheless, North Dakota was one of the top states in terms of actually experiencing growth. As we also know, the oil boom has impacted communities across the state by bringing in a new population to the state, so there's fast-growing population in the western part of the state. I think it remains to be seen how those populations put down roots and how they impact communities in years to come.

Bill Thomas:

You both teach at the University of North Dakota. As you see students who come in from the reservations there, have you ever talked to anybody who's had a story of like, "Oh, yeah. I had a job at the casino. It enabled me to get my act together and get in here to the university." or other anecdotal things that you've heard about the effects of the casinos?

Kathryn Rand:

We had a really interesting experience this past semester. Steve and I were team teaching a course in Indian gaming law for law students and graduate students. During one of the class sessions, the law school hosted a number of tribal college students who were interested in law school. We brought those students into our course and did some small group discussions with our law and graduate students, and they talked about the impact of gaming. They talked about the realities of reservation life. They talked specifically about the challenges that still exist on reservations, particularly like those in North Dakota.

While gaming has been successful, and while it's made an impact, it has not come close to curing the socioeconomic deficits in North Dakota that we see among the reservations or in other states. There's still a lot of work to be done. Gaming still has a lot of potential to continue to assist tribal communities, especially in leveraging economic diversification.

Bill Thomas:

Overall, do you feel it's been a good thing for the tribes here?

Steven Light:

Yes, we do. When you take a look at the various objective measures around revenue and employment, around economic development, the economic multiplier effect for the indirect effects of gaming off the reservation, it is still one of North Dakota's top economic engines, and it has changed myriad lives on reservations. The scale of that, though, is not such that we see a complete turnaround in the socio-economic deficits on reservations. We're talking about two to four hundred jobs, basically, on-reservation for American Indians for tribal casino in North Dakota.

Bill Thomas:

That's for each one or total, all of them?

Steven Light:

For each one, so that does create a number of well-paying jobs that didn't exist before. It creates spending opportunities. It changes family income levels. It also has an impact on spending off the reservation as well. The success of tribal casinos generates tax revenue for the State of North Dakota, so those are the kinds of victories that we see. By the same token, if you look at a hard-hit reservation historically, like Standing Rock, which does have a casino that is relatively successful, we still see a poverty rate in excess of forty percent on the Standing Rock Reservation, and that's well over double the national average. We also see educational attainment levels that are far lower than those for, say, white populations or non-American Indian populations in the state and nationally, so there is a ways to go.

Bill Thomas:

We'll be putting these stories out, and they'll have some national exposure, we hope, as part of the Chasing the Dream Project. Is there anything else that you want to add in about Indian gaming and how it's worked in terms of economic development and fighting poverty?

Kathryn Rand:

Sure, maybe a couple of things. We talked about the range in profitability of tribal casinos. If you look at all four hundred and fifty, or so, tribal gaming operations across the United States, some of those are highly profitable, and many more of those are modestly profitable. Something like six percent of tribal gaming operations are responsible for forty percent of the overall revenue, while something like fifty percent of tribal gaming operations bring in about ten percent of the overall revenue, so the variation is wide. In North Dakota, the focus really is on job creation; modest, but very useful revenue for the tribal government; and a basis for economic diversification, than anyone getting rich off of Indian gaming in our state.

Bill Thomas:

That's good to hear. That reminds me of an issue that, in the early days of Indian gaming, there was concern that it would bring organized crime to the reservations.

Kathryn Rand:

Yes. That was one of the driving ideas to have Congress pass the Indian Gaming Regulatory Act.

Steven Light:

The fact of the matter is that the regulatory structure has been sound enough, and the particular moment in history, in the 1980's through the present, has been different enough than the origins of gambling generally, that there really is no evidence of any organized crime infiltration at any tribal casino across the United States. The same would go, incidentally, in the modern era for commercial casinos and the like.

Bill Thomas:

Anything else you'd like to add?

Kathryn Rand:

It might be worth mentioning, too, that even though other ethnic or racial populations in the United States - Hispanics, African-Americans - experience some similar levels with regard to educational attainment or poverty rates, one thing that makes American Indian poverty different is the fact of reservation communities, and that, in order to find a job or to provide for your family, many Native Americans aren't able to live on the reservation and do those things. We'd argue that it's really important that we revitalize these reservations communities because of their cultural value and their central importance to so many Native Americans in the United States, rather than to abandon them. Indian gaming is one way that we can bring economic development to those communities.

Steven Light:

I think the dream of many American Indians on reservation is just the same as the dream that all of us experience, which is to have the opportunity to have a good paying job, to have success for their family, education, to be able to put food on the table, and to look forward to a brighter future, and that dream is partly being realized by the existence of tribal casinos.

Bill Thomas:

Okay. Thank you. Thank you very much for talking with us.

Kathryn Rand:

Thank you very much for the contact and the invitation to chat.

Steven Light:

Thank you.