Native American Press/Ojibwe News

What’s the impact of a decade of Indian casinos?

By Clara NiiSka - January 4, 2002
One of the arguments frequently made in support of Indian gambling enterprises is that casinos provide much-needed economic growth in impoverished rural areas. Minnesota’s $2 billion-plus Indian gambling industry generates more than half a billion dollars in annual net income for Indian tribal governments in the state. Additionally, the federal government contributes more than $120 million annually to Minnesota’s Indian tribal governments in contracts and grants.

State-tribal compacts establishing Indian casinos under the National Indian Gaming Regulatory Act were signed in 1989 and 1990; most Indian reservations had casinos up and running by 1991. With this issue, Press/ON starts taking a look at the impact of a decade of Indian gambling.

Casinos do not actually generate “economic growth”: commercial gambling transfers money from individuals to casinos (and “pays out” enough in “winnings” to keep gamblers interested in the “game”). Gambling does not create new wealth, it just moves dollars from one pocket to another.

What does the flow of money through Indian casinos do to the communities where these gambling enterprises are located? Over the next several months, Press/ON will examine several aspects of the impact of the casinos.

Welfare statistics give a “snapshot” indication of economic conditions. Although welfare laws have changed significantly during the past decade, the difference between welfare rates in the rural white communities, and welfare rates in contiguous Indian communities is one indication of whether or not Indian casinos have actually lifted reservation Indian communities out of poverty. Are casino advocates’ claims about the economic benefits of casinos accurate?

The Minnesota Department of Human Services’ provides a brief summary of statistics: total number of Indians and whites eligible for “Minnesota Family Investment Program” welfare services in January 1994, January 2000, and July 2001. To see the chart click anywhere on this paragraph. The state agency reports its statistics by county, except for the Mille Lacs band, which has recently contracted with the state to administer state social service programs on the reservation.

Have Indian casinos improved the economic situation for Indians living on or near reservations?

Nett Lake (Bois Forte) and Fond du Lac: welfare rates for whites in 2001 were about half of the 1994 rates, but for Indians welfare eligibility remained about the same.

Grand Portage: white welfare eligibility in 2001 was a fourth of what it had been in 1994; for Indians the 2001 rate was 85% of the 1994 rate.

Leech Lake: white welfare eligibility was less than half of what it had been in 1994; but for Indians welfare eligibility increased to 125% of the 1994 rates.

Lower Sioux: for whites welfare eligibility decreased by more than one fourth during the past seven years; for Indians it increased to 177%.

Mille Lacs: whites’ welfare eligibility was almost halved, Indian welfare eligibility rose by 170%.

Prairie Island: white welfare eligibility in 2001 was only 64% of what it had been in 1994; for Indians the numbers remained constant.

Red Lake: whites’ welfare eligibility rates decreased to 56% of the 1994 figures; for Indians the eligibility rates increased to 134% of the 1994 figures.

Shakopee: white welfare rates in July 2001 were only about a third of what they had been in 1994; Indian welfare rates were 92% of what they had been seven years previously.

Upper Sioux: in 2001 Indian welfare rates had increased to 120% of the 1994 rates, while for whites welfare eligibility decreased to one-fourth of what it had been in 1994.

White Earth: for whites, welfare eligibility rates in 2001 were only half of what they had been in 1994; for Indians the rates had increased to 123% of the 1994 eligibility.

Have Indian casinos improved the economic situation for Indians living on or near reservations? Between January 1994 and July 2001, the only county in which Indian welfare eligibility rates fell by more than ten percent was Cook County, where Grand Portage Indian reservation is located. The decrease there, to 85% of the 1994 Indian eligibility rate, is not statistically significant: it involved two Indians’ income rising beyond welfare eligibility poverty-levels.

In July 2001, Indian welfare eligibility in all Minnesota counties encompassing reservations had risen to 119% of what it was in 1994, while white eligibility in these counties had decreased to half of the 1994 rate.

In comparison, by July 2001 Indian welfare eligibility rates in the seven-county metro area decreased to 58% of the 1994 rate. Whites’ welfare eligibility in the metro area decreased to 42% of what it had been in 1994.

Welfare eligibility rates are only one facet of a fairly complicated—and hotly debated—set of questions: on the whole, have Indian casinos benefited Indian people? Have they done more good than harm? How has this multi-billion dollar industry affected people and communities in Minnesota?

Over the next several weeks, Press/ON will examine these questions from other vantages. We welcome readers’ comments: fax us at (651) 224-6304, email us, or send us a letter at Native American Press/Ojibwe News, 500 North Robert Street, Suite 205, St. Paul, MN 55101.