Two years after it was supposed to help revitalize Atlantic City, the $2.4 billion Revel casino—all 57 stories of it—is closed. It’s an expensive eyesore that sums up Atlantic City’s decline.
Vegas is still a big draw, but it’s an anomaly these days. Destination gambling, as it was once known, is dying: 80 percent of states now have some form of legalized gaming.
Some residents don’t like it. As Christopher Caldwell chronicled in these pages (“House of Cards,” October 6), Massachusetts voters will decide Tuesday whether to repeal outgoing governor Deval Patrick’s casino proposal. But the growth of gaming across America won’t be easy to contain. When it comes to community input, commercial casinos are only half the story. Indian casinos lack the same level of state and local oversight—their approval being mostly left to an indifferent federal government.
Traditional commercial casinos—run by corporations and granted approval to operate by voters or lawmakers—have seen tremendous growth in the 2000s. As of 2012, there were 513 commercial casinos in the United States, and revenues were good—$37.5 billion, the “second-largest gross gaming revenues ever,” according to a study by the American Gaming Association.
Indian gaming, though much younger, has practically caught up. As of 2013, there were 466 Indian casinos in 39 states, with revenues of $26.1 billion in 2011. Indian tribes don’t have to jump through the same hoops as private actors in most states to set up a casino on their land. And once Indian casinos are approved, unless they go out of business, they’re unlikely to go away—thanks, in part, to the legal protection of tribal sovereignty.
The Supreme Court expanded tribal sovereignty in 1987’s California v. Cabazon Band of Mission Indians. The ruling was damning to states: Unless they had a law on the books that made gambling a criminal act, they could not completely outlaw Indian gaming.
Congress responded by passing the Indian Gaming Regulatory Act (IGRA). The law sought to limit—with few exceptions—Indian casinos to “such lands [as] are within or contiguous to the boundaries of the reservation of the Indian tribe on October 17, 1988.” Recently, however, tribes have been purchasing land, sometimes hundreds of miles from their reservations, to gain a more favorable market for their casinos. Indian reservations are often located in remote areas, and tribes have adapted, aquiring land near cities and converting it to sovereign property through a federally managed process called “fee to trust.”
Such “reservation shopping” is contrary to IGRA’s intent. Former senator Jon Kyl (R-Ariz.) stated while in office, “The Indian Gaming Regulatory Act was originally intended to promote tribal economic development and self-sufficiency—not to enable tribes to become gambling enterprises that constantly expand to new casino locations.” His ally on this issue, Senator Dianne Feinstein (D-Calif.), agreed: “The fact is that some tribes have abused their unique right to operate casinos and have ignored the intent of Congress by taking land into trust miles away from their historical lands. This is done simply to produce the most profitable casino and the greatest number of potential gamblers, often with little regard to the local communities.”
Tribal land acquisition is no different than any individual or corporation buying a parcel. But when it comes to sovereignty, tribes can either include a request to allow gambling in their petition to the Interior Department to turn “fee” land into “trust” land—and thus an extension of the reservation—or they can make it later, after the government has taken the land into trust for a tribe.
Off-reservation land acquisitions intended for commercial purposes require a business plan outlining the benefits be sent to the Interior Department. This sets in motion a process by which states and localities can weigh in or appeal. Few trust-land acquisitions are challenged, and even fewer are reversed. Kelsey Waples, writing in the Pepperdine Law Review, called the process “extreme rubber-stamping.”
For gaming on nonreservation trust lands, IGRA requires that two conditions be met: The casino must “be in the best interest of the Indian tribe and its members”; and it must “not be detrimental to the surrounding community.” The first question is sort of a joke—what tribe wouldn’t benefit from a casino? The second, which is considerably more important, appears to be irregularly enforced.