Two years after it was supposed to help revitalize Atlantic City, the $2.4 billion Revel casino—all 57 stories of it—is closed. It’s an expensive eyesore that sums up Atlantic City’s decline.
Vegas is still a big draw, but it’s an anomaly these days. Destination gambling, as it was once known, is dying: 80 percent of states now have some form of legalized gaming.
Some residents don’t like it. As Christopher Caldwell chronicled in these pages (“House of Cards,” October 6), Massachusetts voters will decide Tuesday whether to repeal outgoing governor Deval Patrick’s casino proposal. But the growth of gaming across America won’t be easy to contain. When it comes to community input, commercial casinos are only half the story. Indian casinos lack the same level of state and local oversight—their approval being mostly left to an indifferent federal government.
Traditional commercial casinos—run by corporations and granted approval to operate by voters or lawmakers—have seen tremendous growth in the 2000s. As of 2012, there were 513 commercial casinos in the United States, and revenues were good—$37.5 billion, the “second-largest gross gaming revenues ever,” according to a study by the American Gaming Association.
Indian gaming, though much younger, has practically caught up. As of 2013, there were 466 Indian casinos in 39 states, with revenues of $26.1 billion in 2011. Indian tribes don’t have to jump through the same hoops as private actors in most states to set up a casino on their land. And once Indian casinos are approved, unless they go out of business, they’re unlikely to go away—thanks, in part, to the legal protection of tribal sovereignty.
The Supreme Court expanded tribal sovereignty in 1987’s California v. Cabazon Band of Mission Indians. The ruling was damning to states: Unless they had a law on the books that made gambling a criminal act, they could not completely outlaw Indian gaming.
Congress responded by passing the Indian Gaming Regulatory Act (IGRA). The law sought to limit—with few exceptions—Indian casinos to “such lands [as] are within or contiguous to the boundaries of the reservation of the Indian tribe on October 17, 1988.” Recently, however, tribes have been purchasing land, sometimes hundreds of miles from their reservations, to gain a more favorable market for their casinos. Indian reservations are often located in remote areas, and tribes have adapted, aquiring land near cities and converting it to sovereign property through a federally managed process called “fee to trust.”
Such “reservation shopping” is contrary to IGRA’s intent. Former senator Jon Kyl (R-Ariz.) stated while in office, “The Indian Gaming Regulatory Act was originally intended to promote tribal economic development and self-sufficiency—not to enable tribes to become gambling enterprises that constantly expand to new casino locations.” His ally on this issue, Senator Dianne Feinstein (D-Calif.), agreed: “The fact is that some tribes have abused their unique right to operate casinos and have ignored the intent of Congress by taking land into trust miles away from their historical lands. This is done simply to produce the most profitable casino and the greatest number of potential gamblers, often with little regard to the local communities.”
Tribal land acquisition is no different than any individual or corporation buying a parcel. But when it comes to sovereignty, tribes can either include a request to allow gambling in their petition to the Interior Department to turn “fee” land into “trust” land—and thus an extension of the reservation—or they can make it later, after the government has taken the land into trust for a tribe.
Off-reservation land acquisitions intended for commercial purposes require a business plan outlining the benefits be sent to the Interior Department. This sets in motion a process by which states and localities can weigh in or appeal. Few trust-land acquisitions are challenged, and even fewer are reversed. Kelsey Waples, writing in the Pepperdine Law Review, called the process “extreme rubber-stamping.”
For gaming on nonreservation trust lands, IGRA requires that two conditions be met: The casino must “be in the best interest of the Indian tribe and its members”; and it must “not be detrimental to the surrounding community.” The first question is sort of a joke—what tribe wouldn’t benefit from a casino? The second, which is considerably more important, appears to be irregularly enforced.
Making matters worse, the Obama administration has consciously made it easier for tribes to acquire the right to operate a casino on land far removed from their reservation. Tess Johnson, writing in the UNLV Gaming Law Journal, observed that the Obama administration in 2011 “rescinded a 2008 Guidance Memorandum from the Bush Administration that only permitted for gaming sites within a ‘commuting distance’ from the reservation.” Since 1988, the Interior Department has approved 51 percent of applications to allow gaming on trust land. A third of those have been approved by the Obama administration.
A decade-long quest for a casino by the Menominee tribe of northern Wisconsin in southern Kenosha is a good case study. The proposed casino is 160 miles from the tribe’s reservation.
The casino is popular in Kenosha. But Lake County, Illinois, six miles from the casino site, appealed to the Bureau of Indian Affairs, asking it to reconsider eight-year-old environmental impact statement data, as residents there are concerned about traffic, job and economic losses, and problem gamblers.
Lake County’s appeal was ignored, and the feds approved the Menominee tribe’s request. The legitimate concerns of a community 6 miles from a proposed $808 million casino lost out to the semi-sovereign community that will run it from 160 miles away.
It’s not known how much the Menominee tribe will actually benefit from a casino, as it’s set to be run by Hard Rock International, owned by the Seminole tribe of Florida. (There are no Seminole reservations in Wisconsin.) Richard Monette, a casino law expert at University of Wisconsin-Madison, estimates the Florida tribe could take 30 to 40 percent of the casino’s total revenue.
Since the feds have green-lighted the casino, final approval, by law, is left to Governor Scott Walker. Facing a close reelection battle, Walker sought a 180-day extension to delay his decision, initially required on August 23, until after the race is decided—not a badge of courage.
Walker’s office has been tight-lipped about whether he’ll give the casino a green light. But according to the criteria for approving off-reservation casinos Walker set, the casino’s future is in question. The governor told the Milwaukee Journal Sentinel last year that approval from all 11 tribes in Wisconsin would be one requirement. The Forest County Potawatomi tribe and the Ho Chunk Nation of Wisconsin, which both operate their own casinos, are not on board.
Complicating the matter is Walker’s well-publicized fight with unions.
The Menominee tribe has already promised unions it will allow “card check”—a controversial union organizing tactic—to determine whether the casino’s employees unionize. In a card check organizing scheme, if 50 percent plus 1 employees sign a card, the union is recognized. Anti-union advocates say this allows for workplace intimidation and coercion, with secret-ballot elections a better, more democratic method.
A decade ago, the Menominee tribe signed a memorandum of understanding with two unions—the United Food & Commercial Workers Union Local 1444 and the UAW Local 72—guaranteeing “card check” votes for casino workers, should the casino be approved. In other words, the tribe made the decision for its future employees a decade before they even applied for jobs. The casino is expected to employ 3,000 people, an enticing prospect for membership-hungry unions that are bleeding members.
The tribe and the unions then teamed up to fight efforts by Wisconsin Republicans to require legislative approval of new off-reservation casinos. The GOP’s bill failed to get enough votes in 2004, but a new version passed in 2006—only to be vetoed by then-governor Jim Doyle, a Democrat.
Since then, Republicans haven’t pursued the matter, and the feds approved the Menominee casino—leaving the decision in Walker’s hands. On the verge of his reelection bid, he could have handed unions a victory or provoked their ire; instead, he punted.
Perhaps commercial casinos have reached their peak; certainly some voters are having buyer’s remorse. But people are learning they have even fewer means of regulating or restricting gambling in their communities when it comes to the growth of Indian gaming.
Jim Swift is an assistant editor at The Weekly Standard.
