Dicey Propositions

Gambling is booming -- and bringing brand-new problems with it

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The things we do in the name of economic development! The current craze is casino gambling. Across the country, Indian nations, states, municipalities, and corporate interests have been trying to get an advantage in the booming world of gaming. The fallout can be bewildering.

Congress and the California courts have been tussling with one of the thorniest issues to come out of gaming expansion: tribal sovereignty for Native Americans. The issue, of course, is money. Native American tribes, as sovereign entities, operate many of the nation's casinos. The tribes saw casinos as a way out of long-standing poverty and unemployment, and a use for land that was otherwise unprofitable. The most stellar casino success is in Connecticut, where the Mashantucket Pequot Indian tribe projects close to a billion dollars in revenues this year from the Foxwoods Resort Casino in Ledyard. Ebony (June 1995) told the success story, noting that about half of current tribe members are of mixed Native- and African-American ancestry. The tribe requires people only to prove they are at least one-sixteenth Pequot to benefit from casino revenues, and many have shown they are one-eighth Pequot. That lineage helped boost some people out of dead-end jobs and into wealth, and along the way made the tribe the state's second-largest employer.

Indian successes have the federal and state governments looking anew at the Indian Gaming Regulatory Act, which helped establish the Indian gaming industry, with an eye to giving states and the federal government more say in the planning and operation of tribal casinos. Indian interests, fearing a loss of clout, formed the National Indian Gaming Association to counter such attempts, Barron's reports (Dec. 26, 1994). Congress still hasn't come up with a solution to the standoff, and eyes are turned to California; courts there are being asked to rule on what specific games can be offered at Indian casinos, explained William Eadington, a leading authority on the economics of gambling, who teaches at the University of Nevada in Reno.

Meanwhile, Detroit tried another tactic to see if it could get a share in Indian gaming: establishing a reservation in the heart of Motor City's Greektown section, specifically for a casino operation. Detroit casino promoters saw people crossing the bridge to Canada to casinos in neighboring Windsor, Ontario, and thought, Why not get the Chippewa tribe to open a casino here? The New York Times (May 27, 1995) reports that Detroit could gain 4,400 jobs for residents, $25 million for the city government, and more funds for economic development projects -- plus traffic that would benefit neighborhood merchants. 'This is what the city needs,' a sports bar owner told the Times. 'If we don't get people down here in the evening, we won't survive.' Voters approved the idea in a referendum, but Eadington says it now appears stalled because of Governor John Engler's reluctance to go along with it -- and his OK is needed for the requisite land transfer.

The casino question is a dicey proposition even when it isn't complicated by Indian sovereignty issues. The professional gaming and casino industry has been looking for new markets, and lots of down-on-their luck areas have been considering whether making themselves into mini-Nevadas or Atlantic Cities might be a winning ticket, a source of new jobs and tourist dollars. Estimates cited in the New York Times Magazine (July 17, 1994) indicate that the way casino gambling is expanding, every American will eventually be within a four-hour drive of a casino. Of course, many people think that would be no blessing. They're more worried about street crime and compulsive gambling than they are jubilant over job creation. The next couple of years will probably give us better evidence about the good and bad effects of the more recently opened casinos, Eadington says. We'll need that data: the latest expansion wave is slowing, but Eadington predicts it will pick up again when we have another recession.

Earlier in the century, gambling was frowned on and viewed as a moral vice; now the industry has become professional and promotes itself as a source of entertainment. Of course, that claim means that economic developers are likely to look at it just like any other form of entertainment that has proliferated rapidly, and wonder when the market will get saturated. Too many casinos in too many towns eliminates the unique appeal of each casino, limits the likelihood of new visitors, and questions the casino's economic reason for being. 'If everyone has one, no one benefits,' Eadington sums up. 'You can run out of tourists with money.' And there isn't much reason for economically deprived areas to build casinos just for locals: The very fact that they're looking so desperately for jobs in the casinos means they don't have enough to blow at the blackjack table.

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