Analysts debate effect of Indian gaming as 2004 revenue jumps

Benjamin Grove

Tuesday, Feb. 15, 2005 | 10:55 a.m.

WASHINGTON -- Indian gaming industry revenue continued to grow last year, up from roughly $16.7 billion in 2003 to an estimated $18.5 billion, the National Indian Gaming Association announced today.

The industry continues to grow as Indian casinos expand to include more lodging, restaurants, convention space, entertainment options and even golf courses, a new association report says.

Casino owners and gaming analysts have long tracked and debated Indian gaming's impact on Nevada casinos, and some say reservation operations in California have hurt profits, especially in downtown Las Vegas. California has more gaming tribes than any other state, with 43.

But recent increases in Indian gaming revenue don't necessarily reflect a threat to Las Vegas, association executive director Mark Van Norman said.

The success of Indian gaming has helped Las Vegas redefine itself as the premier international gaming destination, he said. And visits to local Indian casinos spur customer interest in making a trip to Las Vegas, he said.

"They like that experience they get on the reservation and that motivates them to make that step to Las Vegas," Van Norman said after an association press conference at the National Press Club.

Several tribal and association leaders painted a complex picture of tribal government gaming in the United States today. They pointed to a new Harvard University study that found that while income and employment rates for gaming tribes have generally increased due in part to casinos, Indian tribes still have higher poverty and unemployment rates than the rest of the population.

Indian gaming provides about 553,000 jobs nationwide, with about 75 percent held by non-Indians, the association estimates. About 65 percent of the 341 tribes in the lower 48 states use Indian gaming to generate revenue -- with mixed results -- according to the association's annual report for 2004.

Indian gaming operations have been vital to a number of the tribes, providing an economic engine that has driven economic development; paid for programs aimed at preserving tribal culture; and created better social services -- from emergency service vehicles to health clinics and pediatricians.

The 10-year-old, 274-room Chinook Winds Casino Resort was the primary force that reversed a long era of economic and cultural decline of the Siletz Indians in Oregon, said Dee Pigsley, chairwoman of the Confederated Tribes of Siletz.

"No other development could return the kind of profits that a casino could offer," Pigsley said.

But not all Indian gaming operations have made dramatic differences on reservations. Casinos near big-city markets are more likely to spur economic growth than rural operations, association leaders said.

The Rosebud Casino and Quality Inn on the Rosebud Sioux reservation in South Dakota has made only a small dent in the poverty level on the 150-by-50 mile reservation, tribal president Charles Colombe said. The casino offers 200 jobs to about 20,000 living on the reservation where unemployment is still at 80 percent and crime rates are relatively high, he said. Colombe said he found it difficult to be a featured speaker recently at the opening of one of the newest buildings on the reservation, a juvenile detention facility.

The reservation sits in the second poorest county in the nation, he said.

"What does that mean? It means we don't have any jobs, basically," Colombe said. "We are the other side of the success story."

The Pechanga Band of Luiseno Indians north of San Diego are for the first time developing a native language curriculum in a new, expanding elementary school, Pechanga Band chairman Mark Macarro said. Money for the project is just one benefit of a thriving 522-room Pechanga Resort and Casino, which in recent months has become the second-largest employer in Riverside County with about 4,700 workers.

The adjacent city of Temecula has encroached on the reservation, but Macarro adds, "it is a ready-made market" for the 88,000-square foot-casino, with its 2,000 slot machines and 85 table games.

With roughly 1,300 living on the reservation, the band was down to only about eight or 10 who grew up speaking the tribe's native language as a first language. Now a new generation will learn it, Macarro said.

"There is a whole world view in our language that has to be preserved and encouraged," Macarro said. "Finally, through Indian gaming we are able to do this."

Indian gaming leaders face a number of legislative threats to their operations, officials said today. They are constantly vigilant of congressional interest in curbing their profits, they said. Sen. John McCain, R-Ariz., the new chairman of the Senate Indian Affairs Committee, has promised hearings on several gaming issues this year.

And Indians face other threats from state officials, several said. Tribes in Minnesota are split over a proposal by Gov. Tim Pawlenty that would create a revenue-sharing plan that would allow the state a cut of lucrative Indian gaming profits.

"It's been a long battle and it's going to continue," said Doreen Hagen, chairwoman of the Prairie Island Community, who opposes the revenue-sharing plan.