Tribal casinos find a friend in Obama

Julie Bykowicz / Bloomberg News. /

Published Sep 22, 2013 at 05:00AM

WASHINGTON — As President Barack Obama began his first term in January 2009, an Arizona Indian tribe saw a long- awaited opportunity to jumpstart a plan to build a 225,000- square-foot casino not far from the Cardinals’ football stadium.

Having waited out a freeze on casino construction on property distant from a tribe’s reservation by President George W. Bush’s administration, it submitted the project to Obama’s Department of the Interior — eight days after Inauguration Day.

The tribe found this White House friendlier. It won initial federal approval.

It then overcame lawsuits filed by state and local officials and competing tribes. There’s one last obstacle: The House has approved legislation that would scuttle the project, but the measure faces an uncertain future in the Senate due to a crowded legislative calendar.

“The Bush administration would not have gone in this direction,” said Rep. Trent Franks, an Arizona Republican who is sponsoring the bill. “Obama is trying to gain favor with tribal entities. They seem to believe that all of the negatives associated with gambling are subordinate to the political advantage that they believe it brings them by approving these projects.”

The legislation will stop “the precedent of tribes all over the country being able to indiscriminately put casinos up in or near cities,” Franks said.

A growing market

Fights over expanding Indian gaming are breaking out across the country as the Obama administration rolls back Bush-era restrictions on Native Americans, easing their way into the growing $27 billion market.

They include loosening limits on Indian gaming beyond traditional reservation borders, redefining what counts as highly regulated, taxed slot machines, and finding a way around a U.S. Supreme Court ruling that questioned the sovereignty of at least 50 tribes, some of which want to open casinos.

The administration’s goal is to help Native Americans, whose nationwide unemployment rate of 12.3 percent last year compares with 6.6 percent for non-Hispanic whites, see greater opportunities to grow and earn enough to provide jobs and better services, including schools and hospitals, for their people.

The rule changes are sparking clashes with state and local officials from California to Arizona who have seen shrinking tax bases as tribes expand and resent their inability to enforce anti-gambling laws, especially in the evangelical South.

From the start of his presidency, Obama has met annually with Indian leaders. He appointed Charles Galbraith, a member of the Navajo Nation, as an associate director of intergovernmental affairs in the White House. Galbraith had overseen outreach to tribes for Obama’s campaign. The president also established the first-ever tribal advisory council on health care issues.

“Over the last few years, I’ve had a chance to speak with Native American leaders across the country about the challenges you face, and those conversations have been deeply important to me,” Obama told tribal leaders at his first summit, in November 2009. “I get it. I’m on your side. I understand what it means to be an outsider.”

Tribal governments responded by donating more than $2.5 million to Obama and Democratic allies for his re-election, according to the Center for Responsive Politics, a Washington-based organization that tracks political money. They gave less than $500,000 to Republican presidential candidate Mitt Romney and his associated groups.

The community has also spent $85 million on federal lobbying since Obama took office, compared with $146 million during Bush’s two terms, the center’s data shows.

“Obama has been seen as a real friend to the tribes,” said Steven Light, a political science professor at the Grand Forks-based University of North Dakota who studies Indian gaming. “His administration has changed course on some key dimensions of Indian gaming, dimensions that had seemed set under the Bush administration.”

Kevin Washburn, assistant secretary of Interior for Indian Affairs, addressing a Sept. 11 meeting of the National Congress of American Indians in Washington, said the administration supports tribes’ rights to govern themselves.

“We all know that you can’t do it if you don’t have money,” he said. “We know that you need revenues.” And land into trust, one of the first steps for a gaming project outside a traditional reservation, is “an area where we’ve had the most success, but we’re also seeing so much pushback recently.”

Twenty-five years ago, Congress cleared the way for Indian tribes to tap into the gaming industry as a way to rise out of poverty, passing the Indian Gaming Regulatory Act of 1988.

“Beyond a doubt, gaming has been a net positive for tribes,” said economist Alan Meister, who has studied tribal gaming for more than a decade. “There are variables when it comes to how it has helped each tribe. The advantages haven’t shown up across the board because the underlying problems, such as poverty and health, are so entrenched.”

Economic disadvantage

American Indians remain more economically disadvantaged than the general population, according to U.S. Census data. Almost 30 percent of American Indians surveyed in 2011 were living in poverty, compared with 15.9 percent of the general population. Median household income for American Indians that year was $35,192, about $15,000 lower than for all households.

The betting industry has since spread to 242 tribes, more than 40 percent of the 566 federal recognized nations, according to Casino City’s Indian Gaming Industry Report, written by Meister. The report also calculated the $27 billion market value in 2011, about the same size as non-Indian gaming, cash that tribes use to build houses and schools.

Although the Indian Gaming Regulatory Act provides ways for tribes to open Las Vegas-style casinos on property that isn’t within their original reservation boundaries, just seven have been approved. President George H.W. Bush approved the first. President Bill Clinton sanctioned two during his eight years in office. George W. Bush green-lighted a couple during his two terms, and Obama already has approved three.

To begin building a casino on newly acquired land, tribes need state and local agreement in the form of a “gaming compact” and must convince the Interior Department to take into trust the land where the casino will be built.

Washburn said the department has placed into trust about 1,200 parcels of land under the Obama administration, just 10 of which are connected to gaming projects. Much of the rest of the land is being used for commercial development and Indian projects such as residences and health care, he said.

An empty field of sand and brush stands out like a missing tooth at the edge of the Phoenix suburb of Glendale’s bustling sports and entertainment district. It’s across the street from a high school, walking distance from freshly built condominium buildings and within sight of the University of Phoenix Stadium, where the Cardinals play.

This is where the Tohono O’odham Nation wants to build a resort with 400 hotel rooms, 1,100 slot machines and 68 table games and poker tables.

Arizona’s 23 casinos, by state law, are owned by Indian tribes. The Tohono Indians, who live on a reservation the size of Connecticut that touches the Mexican border, have three betting facilities outside of Tucson.

In 2002, the state’s Indian gaming agreements came up for voter review. The Tohono was among 17 tribes that, through a political committee, paid for advertisements and mailers assuring residents that voting to renew the agreements would limit new casinos.

One voter handout said “there will be no additional facilities authorized in Phoenix.” Tohono’s lawyers later said the voter handout was a mistake. The plan before voters didn’t explicitly prohibit the tribe from opening a casino in the Phoenix market.

Voters that November approved the gaming plan. Nine months later, in August 2003, the Tohono incorporated a company in Delaware, called Rainier Resources Inc., and bought 135 acres of land near Glendale.