Friday, Sept. 1, 2000 | 11:01 a.m.
PEACH SPRINGS, Ariz. -- When Indians began embracing gambling as an economic development tool in the 1990s, the Hualapai tribe in northern Arizona moved quickly to open a casino at its Grand Canyon West tourist site.
Tribal leaders figured that slot machines would provide new revenue for the tribe's 1,200 members, many of whom have lived in poverty for years. But they forgot that most of the 100,000 visitors to Grand Canyon West each year come directly from Las Vegas.
"Those people weren't coming to a casino," said Louise Benson, tribal chairman. "They were coming to see the Grand Canyon."
Less than a year after opening the casino, the Hualapai shut it down. Instead of providing an economic boom to tribal members, it left them $1 million in debt.
"There were high hopes for that casino, but the reality of it was that we were too isolated," said Alex Cabillo, the tribe's director of public works.
The Hualapai tribe is one of only two whose casinos failed during the Indian gambling boom of the past decade, when revenues exploded from $100 million in 1988 to $8.26 billion in 1998.
But an Associated Press computer analysis of federal unemployment, poverty and public assistance records indicates that the vast majority of American Indians, like the Hualapai, have not realized the early "high hopes" of the casino boom.
Two-thirds of the American Indian population belong to poverty-striken tribes that still don't have Las Vegas-style casinos. Some, like the Navajo, culturally oppose gambling, while others, like the Hualapai, are too far away from major population centers to benefit.
Among the 130 tribes with Las Vegas-style casinos, those near major cities have thrived, while most others have little left after paying the bills, the AP analysis found.
Despite new gambling jobs, unemployment on reservations with established casinos held steady around 54 percent between 1991 and 1997, according to data the tribes reported to the Bureau of Indian Affairs. Many of the casino jobs were filled with non-Indians.
"Everybody thinks that tribes are getting rich from gaming and very few of them are," Benson said.
Of the 500,000 Indians whose tribes operate casinos, only about 80,000 belong to tribes with gambling operations that generate more than $100 million a year.
Some of the 23 tribes with the most successful casinos -- like the Shakopee Mdewakanton Dakota Tribe in Minnesota -- pay each member hundreds of thousands of dollars a year.
In Scott County, which includes the Shakopee reservation south of Minneapolis, the poverty rate declined from 4.1 percent in 1989 to 3.5 percent six years later. The reservation's unemployment rate also plummeted from 70 percent in 1991 to just 4 percent in 1997.
Such success stories belong mostly to tribes with casinos near major population centers.
The tiny Mashantucket Pequot tribe of Connecticut reported more than $300 million in revenue in the first five months of this year from its Foxwoods Casino, located between New York and Boston.
And the Seminole Tribe's Hollywood Gaming Center on Miami's Gold Coast generates more than $100 million a year with pull-tab slot machines. The unemployment rate on that reservation, however, still was 45 percent in 1997, and the average poverty rate in the two counties it touches rose from 10.4 percent in 1989 to 12.1 percent in 1995.
For many tribes with Las Vegas-style casinos, like the San Carlos Apaches in eastern Arizona, gambling revenues pay for casino operations and debt service, with little left to upgrade the quality of life.
In counties that include reservations with casinos, the average poverty rate declined only slightly between 1989 and 1995, from 17.7 percent to 15.5 percent, the AP analysis founds. Counties that include reservations without casinos saw their poverty rate remain steady at slightly more than 18 percent.
Nationally, the poverty rate hovered around 13 percent during the period.
In California, the Tachi Yokut Tribe in the San Joaquin Valley brags on its website that its Palace Gaming Center has provided employment for tribal members, helped raise education levels and upgraded housing.
But the poverty rate in Kings County, which includes the tribe's small reservation, climbed from 18.2 percent in 1989 to 22.3 percent in 1995. The reservation's unemployment rate dropped slightly to 49.2 percent in 1997.
Jonathan Taylor, a research fellow at the Harvard University Project on American Indian Economic Development, said many investments gaming tribes have made in social and economic infrastructure don't translate into immediate improvements in quality-of-life indicators like poverty.
"You see investments arising out of gaming taking hold slowly in greater educational success, greater family integrity, greater personal health, greater crime prevention," he said.
There are some optimistic signs that tribes hope to build on as they begin paying off their casino construction loans.
The analysis indicates casino gambling has slowed, though not reversed, the growth of tribal members on public assistance. Participation in the Agriculture Department's Food Distribution Program on Indian Reservations increased 8.2 percent from 1990 to 1997 among tribes with casinos, compared with 57.3 percent among tribes without them.
And economic development has been spurred in communities near tribal casinos, according to an analysis of the Census Bureau's County Business Patterns for 1990 and 1997.
The Oneida Indian Nation in central New York, for example, has become the largest employer in Oneida and Madison counties, thanks to a casino that's generating more than $100 million in annual revenues. A championship golf course and convention center are under construction.
But overall, the new jobs have not reduced unemployment for Indians. Tribes with established casinos saw their overall unemployment rate actually rise four-tenths of a point to 54.4 percent between 1991 and 1997, the AP analysis found.
Jacob Coin, former executive director of the National Indian Gaming Association, said that's because 75 percent of jobs in tribal casinos are held by non-Indians.
At the Fort Mojave Indian Reservation along the California-Arizona-Nevada border, the unemployment rate climbed from 27.2 percent in 1991 to 74.2 percent in 1997.
Tribal administrator Gary Goforth acknowledged few of the 675 jobs at the tribe's two financially troubled casinos are filled by tribal members. "Not everybody wants to be a dealer, or a housekeeper or even a manager in the restaurant," he said.
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