Opinion: Looking to the future of California's tribal casino industry

The Pechanga Resort Casino in southern California. Photo from Instagram

Writer discusses the Indian gaming industry in California:
The casino craze has altered the state’s economy with Indian casinos alone taking in $6.96 billion in gaming revenue in 2012, the latest year for which there are figures. That amounts to 25% of nationwide tribal revenues, the largest haul, followed by Oklahoma, Washington, Florida and Connecticut.

According to a recent study, when nongaming operations are factored in, Indian casinos across the country are pumping out $91 billion annually with $31 billion going into wages that support 700,000 workers and contribute about $9 billion in taxes to local, state and federal governments.

Yet, even with all this prosperity, the California Legislative Analyst is reporting a $30 million annual shortfall which the tribes must pay into several funds under the federal government’s strictly written but poorly enforced gaming compacts because they are distributing more money than they are collecting.

Since the state has very limited taxing authority with tribal members living on reservations not subject to state income tax and with casinos exempt from paying corporate income taxes, the coffers can run dry fairly quickly.

A bigger question is whether living conditions for many Indian tribes has noticeably improved. For those operating the largest casinos the answer is yes. For the majority of tribal members who do not directly benefit from the gambling frenzy, these riches have not trickled down.

When Congress passed the Indian Gaming Regulatory Act in 1988 it had three goals in mind: economic development, self-sufficiency, strong tribal governments. Coming to the aid of financially beleaguered states was not one of them.

Get the Story:
Richard A. Rubin: The Future for Indian Casinos in California (PublicCEO 9/4)

Join the Conversation