Friday, December 10, 2010

Costs and conflicts associated with Indian gaming - is it worth it?

The conflict between the states and Indian tribes arises because both are sovereign entities. As such, states are severely limited from taxing and exercising jurisdiction over activities on tribal land. When the interests of the Indian tribes and the states differ, this sets up a conflict. The history of tribal-state relations have been not always been free of conflict and tension. The states, in order to prevent the off-reservation effects of certain activities that occur on the reservation have sought to extend authority over reservations. The result has been substantial litigation between the states and tribes in an attempt to define the relationship between the two. The high stakes of gaming and the fact it is an area traditionally regulated by the state have intensified the conflicts.” 

This is part of the finding of an extensive review by the California Research Bureau in 1997.  They further reported  the following conclusions about Indian gaming and state jurisdictions, corruption and challenges for localities.  Here are some of their findings: 

  •         “Gaming Companies and Tribes Are Large Political Contributors.”  Tribes and their financial backers have spent tens of millions in political contributions to state elected officials.  Contributions are not limited to local officials, among all gaming interests, Indian tribes are the top contributors to federal elected office holders and gambling is among the top overall interest group givers to Congress, just below the National Rifle Association.  This has resulted in numerous political corruption scandals in states like California, Missouri, South Carolina, Arizona, Louisiana and Massachusetts.

  •        The Role of Organized Crime and Indian Gaming has been controversial..  As noted in the section on Indian gaming, the charge that Indian gaming has been infiltrated by organized crime has been made.  Others counter that inadequate regulation and oversight make it harder to find evidence. As a result, many Indian tribes complain that their “backers” aren’t passing through the Indian’s fare share of profits. Non-Indian managers who helped tribes establish gaming operations were taking the majority of the profits.  This mirrors experiences reported by Indian tribes in New England – who are now billions of dollars in debt while their out-of-state financial backers take out hundreds of millions annually in profits.  Backers of Massachusetts Indian gaming efforts include offshore interests like the Asian gambling syndicate giant Genting – further removing them from any interests of the state and local communities.

  •        No publicly collected and released statics figures and financials, as there would be with a public corporation involved in gaming.  While some statistics are reported, many are not, allowing “management companies” and  investors backing Indian gaming operations to take significant, undisclosed shares of the revenues.

  •        Federal Concern for Money Laundering Evidence by New Regulatory Requirements. During 1996, the U.S. Department of Treasury's Financial Crime Enforcement Network proposed to more tightly regulate cash transactions at Indian casinos. The federal regulation added Indian casinos to the definition of financial institutions under the Bank Secrecy Act.  The purpose is to try and prevent fraud and tax evasion. 

  •        Indian gaming cause declines in state lottery revenues and other gaming.  In addition to harming existing non-Indian gaming through competition from tax-exempt local Indian ‘reservation’ gaming,  research in California showed increases in Indian gaming resulted in declines in lottery revenues AND local government revenue falls.  

  •         Local government revenues and business suffer- Indian gaming doesn't results in the tax revenues from the establishments. Local governments may have to provide services for which they are not paid for. The people who gain from this subsidy are the people who enjoy gambling and the financial investment backers of Indian casinos.   Meanwhile, local businesses suffer due to unfair competition from lower priced sales of goods sold on reservations as they are exempt from local sales taxes.  Many ‘reservation’ casinos include convenience and other stores which compete unfairly with existing local businesses.
  •         Costly litigation.  California, Florida, Kansas, Wisconsin and other states with Indian gaming have been “locked in litigation with the tribes” according to the report.  Economic impact studies don’t include the unanticipated but highly likely protracted legal battles states and localities end up having with Indian casinos.  Millions of dollars in state funds are expended on these cases, creating further drains on local government budget resources.

  • What defines an Indian Tribe and its membership?  The majority of people living on reservations and trust land in California, for example, did not identify themselves as American Indians in the 1990 census. Tribal membership is determined by individual tribes, and is frequently based on some minimum blood requirement and/or descent from a historical list of tribal members.  

Monday, November 1, 2010

The Wapanoag - people or tribe, by the numbers

By all accounts the Wampanoag as a re-organized tribe is a relatively new entity.  The tribe was largely wiped out and disbanded in the 1600s following King Phillips War when many tribe members then integrated with colonists or moved to join other tribes.  What remained of the Wampanoag tribe’s last official activities appear to be in the early 1800’s.  The new Wampanoag group formally established themselves as a tribal council in 1976 and
received partial federal recognition in 1987.

By their own ordinance definition, tribal membership requires “Persons who have lived in or near Mashpee, Massachusetts, or have had family members actively involved in tribal community affairs who have lived in or near Mashpee, Massachusetts for at least the preceding 20 years prior to application for membership.”
The Masphee Wampanoag organization, in pursuit of their gaming claim rights, asserts tribal census of over 1,200 registered members. 

However, census data suggest the Tribe’s numbers may be somewhat inflated or that membership standards are lax:
·        2010 US Census – Mashpee, MA  -- 432 individuals identified as Native American
·        2000 US Census – Mashpee, MA – 377 individuals identified as Native American

Even if tribe members don’t call themselves Native Americans for US Census purposes, how does such a small group have the financial resources to be spending hundreds of thousands to lobby state legislators for their gaming interests?  Since the tribe’s finances are not public, we’ll never know  the details on whose money or how much is behind their efforts.

Saturday, September 11, 2010

The Supreme Insult - Carcieri Decision crushes Wampanoag casino dreams

In February of 2009 the Supreme Court delivered what should be a final blow to the Mashpee Wampanoag attempts to create an Indian gaming operation and tax exempt income for their deep pocketed Asian gaming syndicate financial backers.  It's doubtful that even Genting's billions can't buy off enough Members of Congress to fix this one.

The Carcieri v. Salazar Decision states that the Secretary of the Interior lacks the authority to take land into trust for any Indian tribe that was not federally recognized prior to 1934.   As such, it now requires an act of Congress with the signature of the President of the United States for any tribe not recognized prior to 1934 to be granted land into trust required for an Indian gaming operation.

Lest the Wampanoag and Genting incorrectly think Congress will act on their behalf, they need look no father than their own back yard.  Congressman Barney Frank (D-MA) opposes the Wampanoag's on this and has written his constituents and specifically stated:  "do not think that a proposal to circumvent the Court’s interpretation of the 1934 Indian law is likely to be considered on the House floor for a vote. Should that occur, however, I will not be supportive of passage..."

If lacking support from your own Member of Congress isn't enough, neighboring, according to Gale Courey Toensing, Rhode Island representatives will fight this tooth and nail to protect their casino campaign money piggy banks.  As will influential senators from other western tribes who have already said they will block any efforts to dilute their established tribes hold on this lucrative space.

Finally, 17 states attorney's general have written Congress to say they oppose and will litigate attempts to enact legislation.  It's clear, should this Wampanoag project continue to be part of Massachusetts gaming  plans it's a guaranteed lengthy legislative and legal delay against any hopes for jobs and income for the people of Massachusetts. 

Sunday, August 1, 2010

Wamanoag Indian casino investor Genting being investigated

Our neighbors at Middleboro Remembers have their eye on the Asian gambling syndicate bankrolling the Wampanoag lobbying efforts to establish themselves as casino kingpins in Massachusetts. 

They note that New York State's Racing & Wagering Board was investigating key officials with the huge Malaysian company that has jumped into the competition to build and operate a 'racino' at Aqueduct Raceway.  Genting, which is the Wampanoag's new financial backer, was accused of conflicts of interest and questionable dealings in similar deals in New York. We note "was accused" as the claims were dropped after a $1.5 million settlement was paid off to the complainant.  Of course, conflicts of interest and questionable dealings are misdemeanors compared with the fraud, corruption and other convictions associated with the casino lobbying of Wampanoag chief Glenn Marshall.

According to the Wampanoag leadership, Genting is willing to pony up some $350 million in cash  to fund the tribal government and casino operation.  That's a heck of a lot of wampum (a lot more than a $1.5 million pay-off) - one has to ask what they get in return?   If you think the answer is a way to funnel tax-free Massachusetts tax dollars back to their Malaysian corporate hideaway you're probably a winner.  If other state's and Genting ventures are an example, like the losers' dollars at their planned Wampanoag casino, the state and the rank and file tribe members will likely see very little of that money.

This also begs the question of how Asian gambling syndicate money can be legally used to lobby elected U.S. government officials.  Isn't foreign corporate money illegal in U.S. political campaigns?  Yet, the Wampanoag's and their lobbyists have been giving tens of thousands of dollars to their casino plan supports in the U.S. Congress (Sen. John Kerry and Rep. Bill Delahunt) and in the Massachusetts State House (Sen. Therese Murray and Gov. Deval Patrick).

It's time for a little sunshine on the Cape.

Thursday, July 15, 2010

Debt Laden Tribes No Model for Mass Gaming

Massachusetts elected officials need look no further than Foxwoods and the Mohegan Sun casinos just South of the state's border if they want to predict the future of Indian gaming for the Commonwealth.

The Foxwoods owners — the Mashantucket Pequot Tribal Nation — have more than $2 billion in debt as a result of their casino development.  Meanwhile, the non-Native American investors behind the scenes have skimmed off hundred of millions in payouts for their troubles.  So, the revenues to the state are less than from a non-Indian gaming operation and the tribe is buried in debt.

Monday, April 12, 2010

Indian Racinos in Raynham? Don't bet on it to win, place or show (up) soon

NPR's Adam Ragusea warns Massachusetts Racino plans, like one being considered by the Wampanoag and Genting Asian gambling syndicate, could be bad for the economy.

According to Bill Thompson, a professor of public administration at the University of Nevada, Las Vegas, the gaming industry isn't delivering like it promises.  Apparently, outside of Vegas, a quarter of the casinos in Atlantic City are in bankruptcy.  Thompson notes:

“Foxwoods isn’t doing very well, and Foxwoods is the premier casino in the world, the largest in the world,” he said. “Boy, if they’re not doing well, something’s wrong.”  Apparently revenue at the Connecticut giant is down about 20 percent causing them to give 700 employees the axe this past Fall.

But others say Racino's at Raynham run by the tax-exempt Wampanoag with multi-billion dollar funding from Genting would mean "thousands of slot machines" in 60 to 90 days!  Whoa there - somebody is forgetting that any "Indian Gaming" deal will first require federal legislation allowing the Wampanoag people (not a tribe recognized as eligible under the Indian Gaming Act to run gaming operations). 

In fact, it's likely any Indian Gaming operation in Massachusetts will be met with legislative and legal delays which will likely take decades to complete.  Even if the overcome this hurdle, Thompson points out the other downside:

“The slot machine costs $15,000 dollars, you’re losing that just when you buy the machine, and then if the gamblers are just local money, you never make it up."  
The report notes that similar parlors in Maine and Rhode Island owe their relative success  to the fact that they serve local markets.  So, Thompson said, if only Bay Staters go to the ‘racinos,’ our overall economy loses money.  He says, if the Racino is operated by a commercial, taxable organization (not the tax-exempt Indian gaming operation proposed by the Wampanoag) the state may see more tax revenue.   But still be bad for the local economy.
Any real revitalization of Raynham is likely not going to include the Wampanoags or their deep pocketed Asian backers.