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Indian Gaming provides 13,000 jobs says excutive director of gaming association

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Providing nearly 13,000 jobs and a $430 million direct economic benefit, American Indian casinos occupy a huge slice of Minnesota's economy.

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Depending upon which study and what year, tribally run casinos rank ninth to 11th on Minnesota's top employer list, which has the state of Minnesota itself as No. 1 and Target Corp. second.

Yet it's one of the least understood industries and one that faces constant competition -- even over the ability to conduct Indian gaming as a sovereign right of the tribes.

"The economic realities of tribal gaming have been misunderstood by the general public," John McCarthy, executive director of the Minnesota Indian Gaming Association, said Wednesday.

"As usual, they have made incorrect assumptions, and as a result, have concluded that all tribal balance sheets are the same," he said. "Only a few tribes come close to the huge financial windfalls that we so often read about in the press."

Of the 11-member tribes in MIGA, six provide per capita payments from casino profits -- and that only after common tribal needs are satisfied, McCarthy said in a presentation to a small group at Bemidji State's American Indian Resource Center.

But since some of those tribes have few enrolled members, such as only 370 enrolled members of the Shakopee Mdewakanton Sioux Community, many receive six-digit annual payments which grab the public's attention, he said.

"We applaud the success of those tribes and all tribes who struggle to provide successful gaming businesses," McCarthy said, "most of which are located in remote reservation areas. For most tribes, the biggest benefit of their gaming enterprise is jobs for tribal members."

And along with the jobs comes health care, retirement, vacation and above-standard wages, he said.

"These tribes work twice as hard to make gaming a success to overcome the problems of location," he said. "Yet the press makes no mention of that fact, and gives the impression that gaming has made all the Indians in Minnesota millionaires."

But the success of the few has draw even more opposition in recent years, he said, including state efforts to run a casino itself or to allow competing enterprises such as slot machines in bars.

McCarthy said the Indian tribes, as sovereign nations, have always had the authority to conduct gaming but that right was affirmed by a 1987 U.S. Supreme Court ruling in a California case which said states have no authority to regulate Indian gaming if state law does not criminally prohibit gaming activities.

After that, Congress passed the 1988 Indian Gaming Regulatory Act which gave states more power over tribal gaming, allowing states to negotiate agreements to provide casino-style gaming.

Minnesota was the first state to approve such "compacts" with tribal governments, said McCarthy, who was a member of the negotiating team. Compacts were signed first with Gov. Rudy Perpich, a Democrat, and later with Gov. Arne Carlson, a Republican.

"Since 1988, before the ink was dry on the compacts, the state of Minnesota began threatening tribes," he said. "Year after year, anti-gaming factions have been proposing that the state open state-licensed gambling to compete with the tribal operations. We have stopped every significant proposal to expand off-reservation gambling by the state."

The reason anti-gaming factions continue attempts to break up what they see as a monopoly is because "Minnesota tribes negotiated a no-sunset clause in their compacts," McCarthy said. "Quite simply, it drives them nuts."

But the tribes allowed regulatory authority to the state, even though they didn't have to as sovereign nations, such as allowing state inspectors to enter casinos at any time and pull machines off the floor and to require regular and formal audits of their operations to be submitted to the state.

"You hear how the state got screwed and the tribes got the better end of this deal," he said. "It really didn't ... it was fair negotiations with give an take."

Other threats come from anti-gaming groups and legislators, he said, noting that 45 bills have been introduced over 16 years that would undercut tribal gaming operations.

"Each year we see more groups organizing to oppose tribal gambling," he said. "These groups come up with all kinds of moral reasons as to why this is the right thing to do. They want to end the Indian monopoly, or level the playing field."

But what they really want, McCarthy said, "is what they always want -- tribal people know better than anyone that history does repeat itself. And whenever they have something of value, someone will come and try to take it away.

"The land was taken, their natural resources were taken, and sadly, their culture and way of life has been altered forever," he added.

McCarthy quoted former Mille Lacs Tribal Chief Executive Marge Anderson: "When our infant mortality rate is equal to the non-Indians, when the rate of Indian suicides is on par with the non-Indians, when our children have the same graduation rates and educational opportunities that your children have, and when our communities and homes are as safe as yours, then we can talk about a level playing field."

Even with casino profits -- which McCarthy said account for only 4 percent of gross receipts -- there remains $500 million of needs on the reservations. The largest identified need, at $120 million, is housing.

Misconceptions among both local government officials and the general public also work against tribes, McCarthy said. Chief among them:

E Tribal casinos pay taxes -- in 2000 figures, Minnesota tribal casinos and their employees paid $81 million in payroll taxes, including $27.9 million in federal withholding and $10.2 million in state withholding. Tribal casinos also paid $15.9 million to local governments in payment-in-lieu-of-taxes.

E Indians also pay taxes, with all Indian workers paying federal taxes and all but those who work and live on the reservation paying state taxes. In 2000, tribal gaming also generated more than $40.2 million in Social Security and Medicare revenues. Indians who live on "fee" lands on the reservation -- lands not held in trust -- also pay local property taxes.

E Tribal casinos in 2000 made $186.6 million in purchases from Minnesota vendors, much in local communities where casinos are located.

E In counties with tribal casinos, welfare costs have declined, while economic activity and employment have increased, plus property values have risen.

As an example, Scott County where Mystic Lake Casino is located, has had property values up by 56 percent since 1990, while the tax rate has risen only 12 percent; job creation is up 29 percent and wages up 57 percent since 1985; retail sales are up 54 percent; employment is up 52 percent since 1992.

E A study done for MIGA earlier this year, with 2005 figures, shows 12,900 casino-resort employees with 11,100 of them full time, and with 9,100 jobs in rural Minnesota. MIGA casinos had a payroll of $335 million, including $28 million at Leech Lake with Cass County's total payroll at $227 million.

"The tribes' concern, if left unchecked and unanswered, these incorrect assumptions will dictate policy directions at all levels of government," McCarthy said. "We found that when tribes stand together, they stand strong and they stay sovereign."

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