Insight on the News: Indians and states up ante in high-stakes legislation

Some call it a magnet for organized crime; others, a ticket to prosperity. They're talking about gambling on Indian reservations, a perennial controversy soon to reignite in the Senate.

According to many American Indians, gambling revenue has given tribes what decades of federal welfare programs have been unable to accomplish: economic self-sufficiency and renewed self-respect. "Gambling," declares David Holahan, a spokesman for the Mashantucket-Pequots' Foxwoods casino in Connecticut, "is a powerful tool for Indians to reclaim power, dignity and even land."

There is no question that Indian gaming has been an enormous success. The Foxwoods Resort is the most profitable casino in the country, raking in an estimated $900 million a year in revenues. The Pequots have used gambling profits for land investments and for education -- about a third of their adult tribe members attend college, medical or law school on the tribe's tab and the tribal-run Pine Point School sends its graduates to prestigious private academies. The ultraglitzy Mystic Lake Casino in Minnesota, owned by the Mbewakanton Sioux, makes enough money to pay each member of its tribe a hefty six-figure share of the profits. Among the Oneidas of Wisconsin, unemployment has dropped from 40 to 16 percent since they opened a casino.

Indian casinos are not an unqualified success, however. The unique stature of American Indians makes Indian gaming a minefield of legal complications and contention between the tribes and states. A new bill, called the Indian Gaming Regulatory Act Amendments of 1995, or IGRA, intends to simplify those complications and resolve conflicts.

The original 1988 act places certain restrictions on Indian gaming that do not apply to state gaming operations, but also ensures that tribes are the sole owners of their gaming operations and collect all of the profits. It requires tribes to set up so-called "compacts" with states to oversee gambling operations -- dictating what games are allowed in casinos and the size of their profits. If a tribe and a state can't come to agreement, the federal government intervenes with a court-mediation process.

IGRA, cosponsored by Sens. John McCain of Arizona, chairman of the Indian Affairs Committee, and Daniel Inouye, ranking Democrat on the committee, moves oversight for Indian gambling into federal hands. It would set up a bipartisan Federal Indian Gaming Regulatory Commission and give the secretary of the Interior, the department that oversees the Bureau of Indian Affairs, the authority to settle any tribal-state dispute that lasts longer than six months. (IGRA is under review by the Committee on Indian Affairs.)

Currently, 115 tribes have compacts with 22 states. In some cases, governors have capitalized on these gaming operations to improve their states' revenues. Connecticut Gov. Lowell Weicker, for instance, allowed the Pequots to set up slot machines, normally outlawed in Connecticut, in exchange for a piece of the action; the deal will pour close to $150 million into Connecticut's coffers in fiscal 1996. The casinos also provide jobs and contracts to local workers and businesses.

But there has been contention between Indians and states as well. The U.S. Supreme Court has 10 different cases on its docket, all involving tribes suing states about game restrictions. The states claim that Indians cannot offer games unauthorized by state law; IGRA, however, would give Indians even more latitude to operate casinos. (This fall, the Supreme Court will hear Florida vs. the Seminole Indians to determine the matter; of course, if the Senate bill passes, it will negate the case.)

In a letter to McCain and Inouye, Wisconsin Gov. Tommy Thompson and Nevada Gov. Bob Miller, chairman and vice chairman respectively of the National Governors' Association, or NGA, said the proposed bill "would significantly weaken the legitimate role of the states, which is inconsistent with the current trend in federal/state relations to shift more responsibilities to state and local governments." But Pequot spokesman Holahan notes that "Indian nations have certain sovereign rights. This is not some whimsical new idea; it is something that was negotiated a very long time ago, first with England and later with America. It is based on both law and a simple premise: Indian nations can do things that sovereignty implies."

Another point of contention: the mediation process. States complain that it violates the 10th and 11th amendments to the Constitution by stripping their power to regulate themselves. As a result, says McCain, many compacts have broken down or stalled and resulted in situations in which Indian gaming operates without state oversight. At Senate hearings in July, tribal leaders charged that some states have acted in bad faith. JoAnn Jones of the Ho-Chunk Nation of Wisconsin, for in-stance, said that Indians trusted in the "states' commitment to the compacting process" and that "we were wrong."

In the first set of hearings on the IGRA in June, witnesses from the departments of Justice and Interior and the National Indian Gaming Commission all spoke in favor of the bill. But the NGA opposes the bill, noting that bad compacting was the exception, not the rule, and that the bill would force states to accept types of gambling they might not want and limit their negotiating power with tribes. According to an NGA statement: "Mere inability to agree upon a compact should not indicate bad faith by either party. In particular, a state's adherence to its own law and constitution should not be regarded as bad faith."

Meanwhile, Reps. Robert Torricelli, a New Jersey Democrat, and Gerald Solomon, a New York Republican, have sponsored an alternative House bill that would put toughter restrictions on the tribes. The NGA favors this bill; so do private casino owners from Nevada and New Jersey, who echoed Torricelli's remarks that Indian gaming operations could become prime targets for mob infiltration.

Indians scoff at such charges, calling them veiled attempts to derail their success. "They said the same thing about Atlantic City," says Holahan about mob influence. "There is not a whisper of it here. There is no evidence of that kind of infiltration, and if we're able to control it here, I'm sure the same is true of other places." Other tribal leaders complain that the government is moving to rob them -- again -- of economic self-sufficiency.

Indeed, in stark contrast to places such as Atlantic City, where glittery casinos sit amid bleak slums, Indian casinos pump money into their communities; some give generously to local, non-Indian charities, religious organizations and political groups as well. The Pequots donated $2 million to New Haven so that it could host the 1995 Special Olympics and purchased a stadium for the cash-strapped Norwich Navigators, a minor-league baseball team. Indians also have donated millions of dollars in casino profits to the Smithsonian Institution.

But those acts of good will are hardly likely to keep the grumbling governors at bay. Tribal leaders are watching events on Capitol Hill closely and have placed their faith in McCain and Inouye. For his part, Inouye told witnesses at the Senate hearings that although he is opposed to gambling, "if this gaming is the only means available to lift themselves out of poverty, then so be it."