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Debate over benefit of gambling to tribes

The jangle of coins striking metal at the Spokane Tribe's casino is music to the ears of tribal attorney Margo Hill.

Money from gambling allowed the tribe to help pay for Hill's legal studies at Gonzaga University. It is one of many success stories tied to Indian gambling in Washington, according to a new study.

But competitors are painting a different picture, contending that tribes are trying to slam the door on competition by overstating the social benefits of casinos.

"We want the right to operate the same video lottery machines as the tribes under the same rules," said a report by the Entertainment Industry Coalition, which represents minicasinos, bingo parlors, horse racing and other gambling businesses.

It's a political battle with high stakes for tribes, who have found in gambling an industry that provides immediate financial benefits for a population that often has been mired in poverty.

"Competition would reduce tribal revenues and put nascent economies at risk, potentially catapulting tribes back to impoverished times," according to a competing report called "Background to Dream" by Cheryl Simrell King and Casey Kanzler of The Evergreen State College.

There are 340 Indian casinos scattered among 30 states, generating some $13 billion in revenues in 2001, according to a nationwide study released in March. Every Western state except Utah has some form of Indian gambling.

In Washington, there are 34 Indian gambling facilities, generating $892 million in revenues, the study found.

Both the nationwide report and the "Background to Dream" study were basically a glowing tribute to the benefits that gambling has brought to the state's tribes.

The "Background to Dream" study compared data from the 1990 Census and 2000 Census, specifically the number of people employed on reservations, the median household income and the number of families living below the poverty level in each tribe.

Changes in tribal statistics cannot be attributed directly to casinos, since many other factors may be involved. Also, many people who live on reservations are not Indians.

The Spokane Tribe, which has 2,004 members, benefited from gambling more than any large tribe in the state in the past decade, according to the study.

Employment rose 24 percent in the decade, the median household income on the reservation rose 72 percent, and the percentage of families living below the poverty level dropped 23 percent in the 1990s.

Hill said the Spokanes have few options other than the casino for making money and employing tribal members. The tribe also rents out some houseboats on Lake Roosevelt and runs a wood chip mill.

Before gambling, money for college financial aid for tribal members was limited, Hill said.

"There was no additional funding for graduate school," Hill, 34, said. "The only way to put me through law school was through gaming funds."

Gambling revenues also help pay for health programs and the tribal court system, she said.

The Spokanes are unusual among the state's tribes because they defy state law by offering Las Vegas-style slot machines.

While other tribes have signed compacts with the state that require slot machines to dispense vouchers rather than coins, the Spokanes employ true one-armed bandits at their casinos in Chewelah, northwest of Spokane, and along the Columbia River. It's not clear how much the slot machines contribute to the tribe's overall gambling take. But it is true that gamblers prefer the Nevada-style slots.

The slot machine issue has long been in the courts, including two trips to the 9th U.S. Circuit Court of Appeals in San Francisco. The last time, the appeals court ordered the sides to try to reach a negotiated settlement.

The case is on hold because negotiations have broken off, said Jim Shively, an assistant U.S. attorney in Spokane.

The neighboring Colville tribe also offers LasVegas-style slot machines, but that tribe recently struck a deal with state regulators on a compact, Shively said.

Under the agreement, the tribe would remove slot machines and install the kind that dispense printed tickets, which can then be redeemed for cash.

The report on the effect of gaming said the Colville tribe saw incomes rise 41 percent and families living below the poverty level drop 13 percent on the reservation, according to the study.

The 31,799-member Yakama Tribe, the largest studied, saw incomes rise 53 percent and poverty drop 8 percent. The 9,246-member Tulalip Tribe saw incomes rise 39 percent and poverty remain the same.

Among smaller tribes, the 315-member Lower Elwha S'Kallam, which leases out its gambling rights, saw employment rise 114 percent, incomes 183 percent and poverty fall 30 percent in the decade.

The Shoalwaters saw median household income rise 367 percent, from $9,300 a year to $45,000 a year, among its 70 members.

But the coalition of competing gambling interests is attacking the tribal study as designed to help the tribes shut out competition.

"We believe this study was prompted by our efforts to reform state gaming law," the coalition said in a position paper attacking the tribal study.

Specifically, it contends the tribal study failed to consider the negative effects on charities that rely on gambling to raise funds. They also say the tribal study failed to discuss the loss of gambling tax revenues to local governments because tribal casinos are tax-exempt.

The coalition also said that improved economic conditions on reservations could not be attributed solely to casinos.

"Other factors could and probably do help account for the improvements," the coalition said.