Study: Casinos help Indian tribes out of poverty
Harvard University study shows gaming decreases poverty among tribes
January 22, 2005
By: EDWARD SIFUENTES - Staff Writer - NCTimes.com
Besides the gleaming towers built by gambling wealth, there is evidence in nearly every American Indian reservation in the region that the casino industry is improving people's lives. New homes are being built and old ones are being spruced up. Health centers are expanding their services and sports complexes are being developed. Monthly payments are being disbursed and scholarships are being awarded to tribal members.
Yet there is a marked difference among those tribes that have gambling on their reservations and those that don't.
Nationwide, casino gambling helped American Indians raise their standard of living during the 1990s, but they were still among the poorest people in the nation, according to a Harvard University study released this month.
Family poverty rates among tribes with casinos fell from 36 percent in 1990 to 27 percent in 2000. But that rate was still three times higher than the national average of 9 percent, according to the study.
"There's a big gap to close, but that has been there for decades. Now you're starting to turn a corner," said Joseph Kalt, a professor of economics at Harvard University and co-author of the study.
Tribes fortunate enough to have their reservations near urban centers or near major highway arteries have clearly had an advantage. Others in remote areas of the county have had to struggle to find their way.
"We didn't ask to be on this land," said Johnny Hernandez, chairman of the Santa Ysabel Band of Diegueno Mission Indians, whose reservation is on a mountainous region 40 miles east of Escondido, where they plan to start building a casino this year.
Many of the Santa Ysabel reservation residents live in dire conditions, some without electricity or running water. But the tribe has used money from a gambling profit-sharing program to pay for scholarships.
By stark contrast, the Pala Band of Mission Indians, which runs a profitable casino near the busy Interstate 15 between Temecula and Escondido, has used its money build tribal government buildings, housing for its members and even disburse monthly payments to tribal members, much like investors in a corporation.
Payments from gambling profits to tribal members ---- for those that receive them ---- are rarely discussed openly, but are said to range from a few hundred dollars a month to around $10,000 a month for local tribal members.
For most of the 200 tribes nationwide that run casinos, the benefit of the gaming business lies in the job it generates, not the monthly payments, tribal leaders say.
The Harvard study, called the Cabazon (Band of Mission Indians), the Indian Gaming Regulatory Act and the Socioeconomic Consequences of American Indian Governmental Gaming, was funded by the National Indian Gaming Association, a tribal gambling trade group.
It was conducted by the Harvard Project on American Indian Economic Development, a research organization.
Tribal members whose governments operate casinos had higher incomes, lower poverty rates, lower unemployment rates and were less likely treceive public assistance than those that did not have casinos, according to the study.
Despite their economic gains, the average income for all tribal people living on Indian reservations in 2000 was $7,942, about a third of the national average of $21,587, according to the study which analyzed U.S. Census data from 1990 and 2000.
Of all North County tribes, only the Rincon Band of Luiseno Mission Indians, in Valley Center, had a casino briefly during the 1990s. There are now five tribes in North County that operate casinos, including Rincon, and a total of nine tribes own casinos in San Diego County.
Tribal leaders said the study is further proof that Indian gambling is benefiting tribal members.
"In California, you're seeing the resurgence of schools, teaching Indian children native languages, providing better health care for elders, educational opportunities and the list goes on and on," said Anthony Miranda, chairman of the California Nations Indian Gaming Association, a trade group representing more than 60 tribes, most of whom have casinos on their reservations.
Miranda, a member of the Pechanga Band of Luiseno Mission Indians near Temecula, said that though California's gambling tribes are helping to improve all tribal people's lives, the responsibility is not all theirs.
The federal government also has a responsibility under law to help American Indians out of poverty, he said.
California's gambling tribes contribute to a trust fund that provides about $1 million a year for each tribe that has no casino or has a gambling operation with less than 350 slot machines.
Beginning in the 1980s, Indian tribes started building casinos as a way to improve the lives of historically poor residents in American Indian communities. Most reservations are in rural areas, where jobs and economic opportunities are limited.
States, including California, challenged Indian tribes' right to provide gambling on their reservations in the mid-1980s. In 1987, the US Supreme Court upheld the Cabazon Band of Mission Indians' right to establish a gambling casino opening the door for other tribes to open casinos.
The following year, Congress passed the Indian Gaming Regulatory Act of 1988, which formally recognized tribes' rights to gamble and set the rules for gambling on Indian lands.
According to the study from 1990 to 2000:
- Non-gambling reservations saw an increase of 30 percent in per capita income, from $ 5,678 to $7,365.
- Gambling tribes saw an increase in incomes, from $6,242 to $8,466.
- The unemployment rate fell from 25 percent to 22 percent in non-gambling reservations.
- The unemployment rate fell from 19 percent to 15 percent in gambling reservations.
- Nationally, the unemployment rate fell from 5.6 percent in 1990 to 4 percent in 2000.
The report is available at http://www.ksg.harvard.edu/hpaied/pubs/cabazon.htm.
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