Tribes And War Chests

"When we were kids and we played cowboys and Indians," U.S. Senator Ben Nighthorse Campbell said a few months ago, "even the Indians didn't want to be Indian." With the growing success of Indian gaming, that may have changed forever.

Native Americans are now big political players. Analysts credit their vote with swinging last year's South Dakota race for the U.S. Senate to Democrat Tim Johnson and the Washington Senate race in 2000 to Democrat Maria Cantwell.

This fall, millions of tribal dollars flowed into California's gubernatorial recall election, including more than $6 million to the coffers of Democratic Lieutenant Governor Cruz Bustamante. Another $2.5 million went to Republican Tom McClintock. Common Cause estimates that Indian tribes accounted for one of every six dollars spent in the $66 million campaign, including one $2 million donation to Bustamante, believed to be the largest single campaign contribution in U.S. history.

None of the money went to Arnold Schwarzenegger, because he campaigned on a get-tough policy designed to extract more cash from the tribes to help erase the state's red ink. "Their casinos make billions, yet they pay no taxes and virtually nothing to the state," he complained in one television ad. "It's time the Indians pay their fair share. All the other major candidates take their money and pander to them." Then in Terminator-like fashion, he added, "I don't play that game."

Schwarzenegger has said he wants to raise $1 billion from the tribes to help alleviate the state's $8 billion deficit. Several tribal compacts require the tribes to contribute 5 percent of their gaming income. Schwarzenegger asked for 25 percent and threatened to block expansion of tribal gaming without it.

Since the passage of the federal Indian Gaming Regulatory Act in 1988, gambling has vastly expanded across the country. The act upholds the tribes' sovereignty over gambling on their lands, but state officials must give their approval through compacts negotiated with the tribes. The issue is what games--on what scale--the tribes will be allowed to offer, in exchange for how much money they share with state governments.

The stakes are huge. In California alone, state officials estimate that Indian-run casinos employ 41,000 workers, only 10 percent of whom are Indians. From 1998 to 2002, revenue from 330 tribal operations around the country has grown 70 percent to $14.5 billion per year.

Recognizing their new power, tribal leaders have steered big campaign contributions to state candidates they think would treat them best. For their parts, cash-starved state officials have looked on the tribes as an irresistible source of new revenue.

The stronger role of Indian tribes has poured gasoline on the already white-hot deficit debates. In Wisconsin, for example, Governor Jim Doyle negotiated permanent gaming compacts that would bring the state more than $200 million. Republicans, however, charged that Doyle's decision to enter into such long-term agreements was influenced by a $700,000 donation from two tribes to his 2002 gubernatorial campaign, and they have filed suit against the deal.

As Indian campaign contributions have fueled partisan battles, many citizen groups have taken strong stands against the expansion of gambling. In a November referendum, the most expensive campaign in Maine's history produced almost a 2-to-1 vote against a huge new casino, even though the tribes offered the state 25 percent of their revenue. Las Vegas-linked casino companies and big labor unions found themselves fighting against Maine institutions such as L.L. Bean and Olympic marathoner Joan Benoit Samuelson. Voters in Iowa and Colorado also rejected gambling expansion.

Much of the opposition turned on the problems that critics charged more gambling would bring. Gambling addiction specialists point in particular to slot machines, where the flashing lights, rapid play and paper credits can quickly produce huge losses. One Wisconsin study estimated that, for every dollar the state earned from gambling, it spent 42 cents on treating the problems of compulsive gambling. Other critics have complained that an expansion of gambling fueled more bankruptcies, traffic congestion, suicides and drunk driving. Nearby restaurants worry that casino buffets would disrupt their business.

There's no chance that Indian gambling is going away. It seems to be one treaty the government will surely keep. The real questions are how much more it's going to expand, and what price hard-pressed states will exact for new gaming compacts.

The tribes' increasing influence in state politics makes it easier for them to cut a better deal, at least when they back the winners. On the other hand, states facing the prospect of more spending cuts or higher taxes along with a growing reliance on gambling revenue are likely to bargain hard. The old game of cowboys and Indians has changed in ways that no one could have predicted.