NCPA - National Center for Policy Analysis

Has Tribal Gaming Been a Boon for American Indians?

September 1, 2015

Since a 1987 Supreme Court decision legitimized gaming on American Indian reservations, commercial gambling has been spreading across the U.S. Throughout this period Indian gaming has been strongly criticized but it has also been credited with having brought many tribes the fiscal independence they had previously struggled to achieve.

Before the rise of Indian gaming, tribal governments had difficulty finding the investment capital for new projects on their land and most external investors were reluctant to put their capital in an environment they weren't familiar with. Most often, federal grants were the only source of capital but their availability was subject to the political climate.

The Indian Gaming Regulatory Act passed by Congress in 1988 restricted Indian gaming to reservation or tribal trust lands. However, many of these lands are far from urban centers so many tribes struggle to find enough demand near their casinos and incorporating new lands closer to customers can be extremely hard.

Still, as of 2015 over 400 gaming operations exist and their revenues have substantially increased the resources of many tribal governments. Some of the positive effects are:

  • Many of these funds have been allocated to projects to improve community welfare such as foster care services, drug rehabilitation, endangered species protection and college scholarships.
  • Real income per capita for American Indians living on reservations increased nearly 50% from 1990 to 2010.
  • Quality of life has been rising: declines in obesity, smoking, and heavy drinking, and increases in employment.

Nevertheless, gaming operations have also caused disagreements on how to share the revenues. Most importantly, tribal governments need to diversify their economies and learn to carefully disburse their budgets.

Source: "Has tribal gaming been a boon for American Indians?" American Economic Association, August 2015, based on study by Randall K.Q. Akee et al., "The Indian Gaming Regulatory Act and its Effects on American Indian Economic Development," Journal of Economic Perspectives, Vol. 29, No. 3, Summer 2015.

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