This past year has been an eventful one in Indian gaming. According to figures from the National Indian Gaming Commission (NIGC), Indian gaming was a $14.5 billion industry in fiscal year 2002 with 330 casinos in operation, up from $12.8 billion and 329 facilities in fiscal year 2001. Numbers for fiscal year 2003 should reflect continued growth, but perhaps at a lesser rate than seen in past years.

New facilities have opened while many existing ones continue or plan to expand. The Cherokee, Creek and Osage nations in Oklahoma all plan new or expanded facilities. More California tribes will begin gaming in 2004, and efforts remain afoot to expand Indian gaming in Louisiana, New York, Nebraska, Florida and Wisconsin while officials in Texas, of all places, are discussing restarting Indian gaming there.

Legislative efforts to establish Indian gaming in Pennsylvania and Massachusetts proved unsuccessful in 2004, while nine New Mexico pueblos seek to renegotiate their disputed 2001 compacts and hopefully reduce competition from non-Indian racinos.

Gaming tribes in California, particularly, gained notoriety in 2003. During the recall election, the growth of gaming in the Golden State was a hot topic as new Governor Arnold Schwarzenegger repeatedly put his foot in his mouth on Indian issues by demanding compact renegotiations and claiming that Indians need to pay their “fair share.” California tribes already contribute to state-administered funds designed to mitigate casino impact on local communities and assist non-gaming tribes. Gaming’s prominence was also fueled by large tribal donations to various candidates – a sure sign of growing Indian political clout.

In a major setback for two Maine tribes, Indian gaming in that state got a sound rejection by a surprising 2 – 1 margin. The statewide plebiscite, which allowed for “racinos” at the state’s two harness tracks, derailed plans by the Penobscot and Passamaquoddy tribes for a $650 million casino resort in southwestern Maine. Governor John Balducci, who openly opposed the Indian gaming measure, said after the election that he plans to help the disappointed tribes explore alternative means of economic development, but no word has emerged as to what those might be.

An ill-advised raid by the Rhode Island state police on a reservation smoke shop operated by the Narragansett Tribe brought into the national spotlight the tense tribal-state relations in that small state. Over the years, the Narragansetts have been continually stymied in their attempts to build and operate a casino on tribal land; state officials still have their heels planted in opposition.

Regulatory effectiveness was demonstrated as well. A bitter leadership dispute forced the NIGC to close the Meskwaki tribe’s Iowa casino in May. As tribal leaders appear to have sorted things out, the federal regulator recently allowed the tribe to reopen the casino on New Year’s Eve.

NIGC also moved to better delineate the blurry distinction between Class II and Class III electronic gaming machines. The regulator’s rulings alleviated problems for many Indian casinos in states that prohibit Class III gaming and helped gaming machine manufacturers properly market their products.

Wish list

Here are three things we’d like to see happen in 2004.

* Revenue sharing guidelines. Unfunded federal mandates, higher insurance costs and decreasing tax revenues and pension funds are just some of the fiscal challenges facing various states. Because of these financial difficulties, states increasingly see Indian gaming as a source of revenue and have demanded ever-larger slices of the pie.

The Indian Gaming Regulatory Act prohibits states from enacting a straight tax on gaming tribes, but giving states a cut of slot machine revenues seems to have become an informal quid pro quo in compact negotiations. Yet in order for a tribe to “share” revenue with a state, that state must be able to offer the tribe a tangible benefit in return. One such benefit might be casino gaming exclusivity for a specified period or in a particular geographic area.

But what works in one tribal-state compact may not be applicable to other such agreements. Just because Connecticut, for example, gets 25 percent of the slot win from the each of the two Indian casinos in that state, does not necessarily mean that this number should be the standard for compacts nationwide. Likewise, the 8 percent mandated by New Mexico’s compact, lowered from 16 percent, may not work in other cases.

We hope that the federal regulatory agency, NIGC might take the lead in devising revenue sharing guidelines to be followed by tribal and state compact negotiators. Such guidelines might consider many factors including tribal size, casino location, prevalence and type of gambling already allowed in the state, and the proximity of other tribes. Guidelines might also stipulate that a certain percentage of the tribal “contribution” be put to work in the local community to mitigate any effects on local infrastructure, schools, utilities and municipal services.

* Resolution to the Catskill casino follies. Since the New York Legislature authorized six Indian casinos for the state in October 2001, activity in the Catskill region, which is supposed to get three of the casinos, has crept to a standstill. While negotiations are conducted behind closed doors, it is known that several New York tribes – including the St. Regis Mohawks, Cayugas and Oneidas – are competing with a pair of Wisconsin tribes for Catskill casino rights.

The more competitive bidders have purchased land, forged operating partnerships and petitioned BIA and NIGC for the necessary land-into-trust transfers and gaming ordinance approvals, respectively. The major obstacle, however, seems to be compact negotiations with Albany, which wants to link the resolution of land claim and sales tax collection issues with Class III compacts.

The St. Regis Mohawk Tribe, the Cayuga Nation and the Oneida Nation have publicly offered to share slot revenue with the state and to forge tax deals as well, while the Oneida Tribe of Wisconsin and the Stockbridge-Munsee Band of Mohicans have made similar overtures to Albany. BIA has approved land-trust applications for the Cayugas and Mohawks.

It is time for progress. We hope that before the end of the year, the three casinos will have been awarded to tribes and that construction can finally begin. The tribes and the region both could use the economic shot in the arm.

Indeed, only one of the six New York casinos has so far opened its doors – the Seneca Nation’s Seneca-Niagara Casino in Niagara Falls has generated a $40 million revenue-sharing payment to the state for the year, $9.5 million of which goes to the city of Niagara Falls. From financially hurting Albany’s perspective, this money should be an incentive to get the remaining compacts finalized sooner rather than later. So far, besides the Senecas, the only people making money off Indian gaming in New York are lawyers.

* Crossing state lines. Another issue begging for resolution is whether or not tribes may go across state lines for gaming purposes. As students of Indian history certainly know, many eastern tribes were forcibly displaced west of the Mississippi River during the early years of the American republic. The lure of gaming may entice some of them to try and “return home” and seek casinos.

One such tribe, the Seneca-Cayuga Tribe of Oklahoma, has in fact tried just that. A party to a successful (though under appeal) land claim, the Seneca-Cayugas in 2002 acquired a tract of land and began to improve it for construction of a bingo hall. Local politicians objected, and now the matter is pending in federal court.

IGRA makes no mention of crossing state boundaries for gaming. Thus, seems that BIA and perhaps NIGC can work together to devise policy governing such cross-border movement. Otherwise, many individual cases like the Seneca-Cayugas could end up in court, where nobody but the lawyers win.