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Because tribes pay no state or local taxes, the compacts Davis negotiated provide for tribal contributions to a special impact fund. The money will go to local communities overburdened by booming casinos and help defray the increased costs of local government services. California officials estimate that the tribes will pay about $100 million a year into the fund. By contrast, Connecticut collected $332 million last year from its two Indian casinos, Foxwoods and the Mohegan Sun. If California tribes were paying at the same rate--25% of slot revenue--the state would collect up to $1 billion.
NIGHTMARE NEIGHBORS
As the profitability and size of Indian casinos have grown, so has friction between the gaming ventures and surrounding communities. Last summer tensions between the Rumsey Band of Wintun Indians and its neighbors in the rural Northern California Capay Valley erupted into a bitter war of words when the tribe announced plans to double the size of its hillside gaming business. Highway 16, the narrow, serpentine road that winds past the Cache Creek Indian Bingo and Casino on its way into the tiny hamlet of Brooks, is already congested from round-the-clock traffic to the casino. In 2001, traffic to Cache Creek, with its estimated $150 million annual revenue, was up 87% from the year before, according to a California department of transportation study.
Indian casinos are overloading other communities across the country. One exacerbating factor: because of tribal sovereignty, if a casino overwhelms local emergency services, draws down the local water supply or pollutes the environment, local authorities have no recourse. Tom Frederick, who owns a small vineyard north of the casino, found that out the hard way. For years, as sewage from the casino seeped onto his property, he tried to get the Rumsey Indians to deal with the problem. Recently the waste-water drainage slowed when the tribe relined a sewage-holding pond, but tribal officials will not talk to him about any damage to his property. "They use sovereignty as a shield," he says.
After protracted negotiations, the Rumsey Band and Yolo County officials reached a tentative accord on the casino expansion. The tribe, which views the deal as a concession, since it is a partial surrender of its sovereignty, agreed to slightly reduce the size of the expansion and pay the county more than $5 million a year for 18 years to deal with traffic, environmental and other problems. But relations remain strained. Bulldozers moved onto the Rumsey reservation and began clearing land even before the county board had approved the agreement.
A TALE OF TWO TRIBES
After the Supreme Court gave the green light to gaming on Indian reservations, Congress set up a regulatory scheme that is contradictory, inconsistent and shielded from public scrutiny. How arbitrary is it? The National Indian Gaming Commission can levy fines but has no power to collect them. Each tribe has its own gaming commission, but that's like Enron's auditors auditing themselves. States monitor casinos in some situations but not in others. Federal prosecutors may go after one casino for a gaming violation while ignoring the same violation by a wealthy and powerful tribe.