Integrating The Casino Gaming Industry in Japan: The American Indian Gaming Model Speaker: Dr. Deron Marquez, Member, Board of Trustees, Claremont Graduate University and Former Chairman, San Manuel Band of Mission Indians

1. American Indian Tribal
Nation Government Gaming
Discussion
July 2019

3. State Lottery

4. State Lottery Revenue
2015
The United States has witnessed a steady lottery growth
from 1977-2015
A small national decline between 2008-2009
Between 2008-2009, only two regions –the Southwest
and Rocky Mountain–did not see a decline in revenue
2015 National Lottery Revenue - $24,606,289,000
The Mideast posted the highest overall lottery revenue at
$7,038,413,000 (28.6%); Delaware, DC, Maryland, New
Jersey, New York, Pennsylvania
Source: http://www.taxpolicycenter.org/statistics/lottery-
revenue

5. Commercial Gaming

6. 2016 Commercial Gaming
Source: http://gaming.unlv.edu/reports/national_monthly.pdf
23 of the lower 48 States engage in commercial
gaming
Horse/Dog/Off-Track Betting (OTB) Not Included
New Jersey and Nevada are the traditional
gambling centers
Commercial operations have entered into
Pennsylvania, Florida and New York
United States Commercial Gambling Revenue in
2016 equaled $40,588,441,141 (Year-Over-Year
= +1.11%)

7. American Indian Tribal
Government Gaming

8. American Indian Tribal
Government Gaming (Class II & Class
III)
In IGRA[OS1] , Congress included the definition of Class II
gaming as follows: bingo; when played in the same location as
bingo - pull tabs, lotto, punch boards, tip jars, instant bingo,
other games similar to bingo, and non-house banked card
games authorized or not explicitly prohibited by the state in
which the tribal operation is located.
All other games are Class III, except for certain social or
traditional forms of gaming. Class III games include, but are
not limited to the following: baccarat, chemin de fer, blackjack,
slot machines, and electronic or electromechanical facsimiles of
any game of chance.
The NIGC Office of General Counsel reviews games on request
by a tribe or a game developer and issues advisory opinions on
whether they are Class II or Class III
Sources: https://www.nigc.gov/commission/faqs (Emphasis
Added)

9. What is a Tribal-State Compact?
Tribal-State compacts are agreements that
establish the rules to govern the conduct of
Class III gaming activities. Although a compact
is negotiated between a tribe and a state, the
Secretary of the Interior must also approve the
compact.
Source: https://www.nigc.gov/commission/faqs
(emphasis added)

10. What happens to the profits from Indian
gaming operations?
What happens to the profits from Indian gaming
operations?
IGRA requires net revenues from any tribal gaming
operation to be used for the following purposes:
fund tribal government operations or programs
provide for the general welfare of the Indian tribe and its
members
promote tribal economic development
donate to charitable organizations
help fund operations of local government agencies.
If a tribe is able to adequately provide these services and
wishes to distribute net revenue in the form of a per capita
payment to members of the tribe, the tribe must have a
Revenue Allocation Plan, which is approved by the

11. Indian Gaming Benefiting Arizona
– Revenue Sharing (Class III)
http://www.benefitingarizona.org
[For Example $100,000,000]
[$1,800,000]
[15%]
[$15,000,000]
[$13,200,000]
[$11,748,000]
[$6,578,880]
[$3,289,440]
[$939,840]
[$939,840]
[9% - $1,188,000
[2% - $264,000]

12. What Does American
Indian Tribal Government
Gaming Revenue Look
Like?

13. Indian Government
Gaming

14. Indian Government
Gaming

16. 6
FY16-FY17 Gaming Revenues by Region
Number of Gaming Number of Gaming Number of Gaming Revenue
Submissions Revenues Submissions Revenues Submissions Revenues Percentage
Portland 52 $3,383,829 53 $3,177,311 (1) $206,518 6.5%
Sacramento 74 $8,996,042 70 $8,380,918 4 $615,124 7.3%
Phoenix 59 $3,037,879 57 $2,932,157 2 $105,722 3.6%
St. Paul 92 $4,586,695 93 $4,511,156 (1) $75,539 1.7%
Rapid City 39 $363,257 39 $373,179 0 ($9,922) (2.7%)
Tulsa 72 $2,391,294 69 $2,295,202 3 $96,092 4.2%
OK City 69 $2,311,621 66 $2,264,665 3 $46,955 2.1%
Washington DC 37 $7,333,311 37 $7,260,962 0 $72,350 1.0%
Totals 494 $32,403,927 484 $31,195,549 10 $1,208,378 3.9%
Portland Alaska, Idaho, Oregon, and Washington.
Sacramento California, and Northern Nevada.
Phoenix Arizona, Colorado, New Mexico, and Southern Nevada.
St. Paul Indiana, Iowa, Michigan, Minnesota, Nebraska and Wisconsin.
Rapid City North Dakota, South Dakota, Montana and Wyoming.
Tulsa Kansas, and Eastern Oklahoma.
OK City Western Oklahoma and Texas.
Washington DC Alabama, Connecticut, Florida, Louisiana, Mississippi, North Carolina, and New York.
Source: Compiled from gaming operation audited financial statements received by the NIGC through June 26, 2018.
National Indian Gaming Commission
Tribal Gaming Revenues (in thousands) by Region
Fiscal Year 2017 and 2016
Fiscal Year 2017 Fiscal Year 2016 Increase (decrease)

17. Impacts of Tribal
Government Gaming

18. 1st Responders - Fire
Stations

20. Education
Building of “Schools” on Reservations
“American Indian gaming contributed $1 billion to
Oklahoma education over past decade, study shows”
http://newsok.com/article/5461063
“For more than 10 years, shared revenues from Tribal
Gaming have been invested in Arizona to improve
education, health care, conservation and the economies of
local communities throughout the state.”
http://www.azindiangaming.org/resources/arizona-benefits-
fund/
“Indian Gaming Means Education in Indian Country”
http://www.indiangaming.com/istore/Aug07_SpeakOut.pdf

21. American Indian Education
http://all4ed.org/articles/diplomas-count-2011-report-pegs-national-high-school-graduation-rate-at-71-7-percent-highest-since-19

22. American Indian Education
http://www.utahchildren.org/newsroom/speaking-of-kids-blog/item/767-utah-above-average-and-below-
average-in-new-national-high-school-graduation-data
U.S. HIGH
SCHOOL
GRADUATION
RATE
2013 2014 2015
U.S. OVERALL 81.4% 82.3% 83.2%
U.S. WHITES 86.6% 87.2% 87.6%
U.S. LATINOS 75.2% 76.3% 77.8%
U.S.
ASIAN/PACIFIC
ISLANDERS
88.7% 89.4% 90.2%
U.S. AFRICAN
AMERICANS
70.7% 72.5% 74.6%
U.S. AMERICAN
INDIANS
69.7% 69.6% 71.6%

23. College Bound
American Indian Education Fund
http://www.nativepartnership.org/site/PageServer?pagename=aief_progs_sf_scholarsh
ipfund

24. Health
“The income and health effects of tribal casino
gaming on American Indians”
https://www.ncbi.nlm.nih.gov/pubmed/22427279
“Gaming revenue benefits tribal health care”
http://www.postcrescent.com/story/news/2014/03/
03/gaming-revenue-benefits-tribal-health-
care/5982631/
”American Indian Health”
https://americanindianhealth.nlm.nih.gov

25. Health Care

26. Alcohol
National Institute on Alcohol Abuse and Alcoholism
Age-Adjusted Death Rates Attributed to Alcoholic Liver Disease (2008)
https://pubs.niaaa.nih.gov/publications/arcr352/229-237.htm

27. Young American Indian –
Suicide Rates (2016)
“Native American Youth Suicide Rates Are At Crisis Levels” (2016)
http://www.huffingtonpost.com/entry/native-american-youth-suicide-rates-are-at-crisis-
levels_us_560c3084e4b0768127005591

28. Culture
Identity – “Casinos influencing Indian culture — in a
good way”
https://www.minnpost.com/politics-
policy/2012/12/casinos-influencing-indian-culture-good-
way
Language – “Chukchansi Tribe uses casino revenue for
language preservation”
http://www.indianz.com/IndianGaming/2012/025057.asp
“Community Investment – Preserving Culture”
https://www.washingtontribes.org/preserving-culture

30. Michael D. Cox
The Indian Gaming
Regulatory Act: An
Overview

31. Cox – 1994-1995
Indian Gaming Regulatory Act: An Overview
Pre-IGRA
IGRA
Compact Process
NIGC
Tribal Ordinance
Management Contract
Civil Enforcement Authority
Constitutionality of IGRA
Criminal-Prohibitory/Civil-Regulatory Distinctions
Class II & Class III
Proposed Early Amendments to IGRA

32. Cox
The opening of the Seminoles high stakes bingo hall in
1979
It was met with immediate resistance from the Sherriff of
Broward County who threaten to arrest anyone playing
bingo…
The district and appeals courts held because Florida’s
bingo laws were civil-regulatory rather than criminal-
prohibitory, the state had no authority to apply its bingo
laws on tribal land.
Seminole Tribe v. Butterworth (Former 5th Cir., 1981; Cert.
Denied, 1982)
The Fifth Circuit (Now Eleventh Circuit) considered the public policy of
the State and the intent of the legislation in enacting the bingo
statute…Florida permitted nonprofit charitable organizations to conduct

33. Cox
1984 Congress began to hold oversight hearings
During this same period (1984-90), BIA officials began to realize the
potential economic benefits of tribal gaming…
Economic Self-Sufficiency
Economic Development
Tribal Self-Determination
BIA approval of loans & loan guarantees

34. Cox
February 25, 1987 – 30 years ago – the Supreme Court affirmed the 9th
Circuit decision in California v. Cabazon Band of Mission Indians
(1987)…
Supreme Court endorsed the criminal-
prohibitory/civil-regulatory distinction employed
by the lower courts.
…and held that “the shorthand test is whether the conduct at issue violates the
State’s public policy.”
The Court acknowledged the congressional goals of encouraging tribal self-
sufficiency and economic development…

35. Cox
The Cabazon decision renewed interest in the 100th Congress to
secure legislation…
The central areas of disagreement centered on:
What games would be regulated (scope of gaming) by tribes and the
federal government?;
Whether state law & jurisdiction should be extended to all other forms
of gambling?
Senate Bill 555, the Indian Gaming Regulatory Act
CL I – Tribal Government
CL II – NIGC and Tribal Government
CL III – Authorized Compacts between States & Tribes
IGRA pleased neither states or tribes

36. Stephen Cornell
The Political Economy of
American Indian Gaming

37. Cornell – 2008
The Political Economy of American Indian Gaming
Development of Tribal Gaming
Balancing Doctrine
Economics and Social Impacts of American Indian Gaming
Gaming Impacts on American Indian Nations
Impacts on Non-Native Communities
Researching Success

38. Cornell
Economics and Social Impacts of American Indian Gaming
New jobs generated
Measure the effects of Individuals of changes in life
Both Congress and the Supreme Court in Cabazon said
gaming was/is central to tribal economic development.
Light and Rand (2005)
Cabazon made much of this, and IGRA’s central purpose was to
facilitate such development while respecting other interests
(“Balancing”).

39. Cornell
Gaming Impacts on American Indian Nations
IGRA’s 5 Permissible Uses of Net Revenues (As noted above)
In short, tribal gaming revenues have to be used for what
generally are considered public purposes.
Owners of private-sector casinos do what they please with their
revenues
Taylor and Kalt (2005)
At the national level, using 1990 & 2000 census data examined
socioeconomic change in Indian country…
They compared gaming reservations with nongaming reservations and found
that conditions in both sets improved at a faster rate than such conditions did
in the US as a whole.
It was a positive decade for both gaming and nongaming tribes in terms of:
Rising Employment
Household Income
Reduced Family and Child Poverty Rates
Reduction in Over Crowed Homes

40. Cornell
Gonzales et al (2007)
Looked at nongaming and gaming tribes in Arizona and New Mexico using
1990 and 2000 data
They found socioeconomic improvements in both
Improvements tend to more substantial on gaming reservations
Jojola & Ong (2006)
Looked at 11 Reservations within a 50-mile radius of Albuquerque, New
Mexico
6 with gaming; 5 without
All reservations showed improvements
Gaming tribes experienced greater drops in unemployment rates
Larger increases in per capita incomes
Cozzetto (1995)
Increase on Indian employment
Welfare Payments to Indians Fell
In the early period of rapid gaming expansion in Minnesota
In 1992, with 16 gaming operations open, Aids to Families with
Dependent Children increases for every group in the state except Indians

41. Cornell
Within certain limits, gaming has increased the freedom of
some of those nations to make meaningful choices and
their capacity to act upon the choices made.
Self-Determination
Those “certain limits” are critical piece of the picture, which has
two very different sides.
The legal side
The political/economic side:
Gaming has brought a significant number of Indian nations
enhanced resources with which…to pursue their objectives:
Control over their land
Control over their affairs
Cultural Continuity
Cultural Strength
Improvements in the Welfare of their People