Indians And Gambling Essay, Research Paper

Indians vs.

The Constitution

They are Native Americans who are trying to build better lives for themselves but are stopped in there tracks by the state supreme court. Proposition 5 passed in November of 98, which would allow more gambling in the Indian reservations. The proposition was ruled to be unconstitutional. Now the Indians are rebutting the fact that they are sovereign and the ballot was passed.

Under existing law, Indian tribes operate as semi-sovereign nations, and are liable under federal law only. Recently, the long-standing political and legal tension between the Indians and the government, which has characterized the relationship since colonization, has entered into the debate over tribal gaming. Indian gaming is not new to California. In fact, tribes have been performing gambling operations on tribal lands since the late 1970’s. What began as a small-time operation with a couple of bingo games and card tables has grown into a lucrative industry. There are currently no revenue estimates for tribal gaming, the best estimation is that Indian gambling generates hundreds of millions of dollars. (McCormick) Much of the current conflict can be traced to voter approval of Proposition 37 in 1984, which enacted the California State Lottery. State authorization of gambling provided the California Indians with leverage to justify their gaming operations. However, as tribal gaming facilities grew, they began to violate state laws regarding hours of operation, sizes of prizes offered, and licensing requirements. State officials contended that the Indians were violating California law, which prohibits “Nevada and New Jersey-style” casino gambling. The state relied on federal law, which authorized state jurisdiction over certain activities on Indian lands. But the Indians won. The United States Supreme Court decided that the state could not prohibit the Indians from conducting gambling since it promoted legalized gambling through the state lottery. (Levin) One year after this court decision, Congress enacted the Indian Gaming Regulatory Act (IGRA), which regulates Indian gaming throughout the states. In passing this law, Congress intended to strike a balance between state and tribal leaders, allowing the state some input over casino-style gambling, while encouraging tribal autonomy and economic self-sufficiency.

The present conflict between some California tribes and the Wilson administration concerns tribal operation of electronic gaming devices. The state asserts that these devices are slot machines and, illegal under California law. Many tribes contend that, as sovereign nations, they are not subject to state regulation. The state has demanded the tribes to cease their gambling operations and enter into an agreement with the state, which will allow “legal” tribal gaming. Some tribes have agreed to Wilson’s demands, recently signing the Wilson-Pala Compact that provides state control of tribal gaming and also establishes a limit on the size of gaming operations. The majority of tribes have refused to agree to the terms of the Wilson-Pala Compact, however, claiming that it is inflexible and grants the state too much power over tribal affairs.

Proposition 5 provides the terms of a tribal gaming compact and requires the Governor to permit any tribe to enter into the compact upon request. In general terms, Proposition 5’s compact contains fewer restrictions upon tribal gaming than is provided for in the Wilson-Pala Compact and is more protective of Indian sovereignty. The differences relate to such diverse issues as the number of slot machines permitted, the type of games authorized, the degree of state involvement in regulating tribal gaming, employee rights, local community involvement, liability provisions, and the applicability of state health and safety requirements.

Two constitutional concerns arise from the language of the proposition. The first is whether the proposition establishes a statute, or just forces executive action that is not within the power of the initiative. The second has to do with the Governor, if he constitutionally can be allowed to sign a compact. Regarding the first issue, the language of the measure appears to enact a statute and would therefore be within the initiative power. However, the second issue does not appear to be as clear cut. Compelling the Governor to enter into an agreement with any requesting tribe, without negotiation, may unconstitutionally impair the Governor’s discretionary authority. Since the Governor will likely need to balance various policy considerations and exercise individual judgment prior to striking a gaming agreement and signing a compact, this function is likely to be categorized as a discretionary one. If signing a compact is a discretionary function, a Governor could refuse to sign a Proposition 5 compact without fear of being ordered to do so by a court, and Proposition 5 would be essentially unenforceable.

History of proposition 5

Legal issues involving Indian affairs are complicated by the unique status tribes enjoy within our political system. As tribes began operating gaming industries and generating revenue, states attempted to enforce state laws concerning gaming within Indian lands. (Stephanie Levin, Betting on the Indian Land.) This resulted in tense and often bitter conflict over whether or not tribes were obligated to follow state laws prohibiting gaming and who should regulate these activities. Congress responded to the controversy in 1988 by passing the Indian Gaming Regulatory Act (IGRA). IGRA contains provisions classifying gaming activities into different categories and provides a framework for state and tribal regulation. While the purpose of IGRA was to help alleviate the conflict between tribal and state governments, and to encourage economic self-sufficiency for Indians, the result has been more conflict than ever as states resist tribal efforts to generate revenue from these lucrative operations. Several tribes have challenged the application of state gaming laws within Indian territory. This has created more tension between tribal and state leaders since many questions remain unanswered. (Levin) Before examining the complicated legal and political issues surrounding today’s debate over Indian gaming, it is necessary to understand the historical relationship between Indian tribes and the government. While the principle of Indian sovereignty was reflected through treaty provisions, the United States Constitution specifically recognized the inherent power of Indian nations in the Commerce Clause and the Treaty Power. These constitutional provisions reflect the principle that Indian nations are independent political entities, authorizing Congress to regulate commerce and negotiate treaties among the states, with foreign nations and with the Indian nations.

Rise of Indian Gaming and history

Indian gaming began in the late 1970’s with card rooms and bingo halls. (Levin) As these operations grew and expanded into profitable enterprises, tribal leaders clashed with state officials. Tribes began violating state and local laws, including regulations concerning licensing, hours of operation, frequency of games and the sizes of prizes offered. Using Public Law 280 as an enforcement mechanism, the State threatened to close down many of the casinos, asserting that the gaming tribes were violating state law. (La Farge) The Indians fought back, arguing that, as sovereign nations, California laws did not apply to their reservations. Ultimately, the Indians won in California v. Cabazon Band of Mission Indians (1987). In this case, the United States Supreme Court made a distinction between laws that were prohibitory and those that were regulatory. The Court held that Public Law 280 did not authorize state enforcement of a statute regulating bingo, since the statute was regulatory, not criminal. The court reasoned that since “California permits a substantial amount of gambling . . ., including bingo, and actually promotes gambling through the state lottery,” the state’s argument that tribal gaming contradicts public policy lacks merit. Further, the opinion noted the importance of “encouraging tribal self-sufficiency and economic development.”(McCormick)

CONSTITUTIONAL ISSUES

Proposition 5’s “Tribal Government and Economic self-sufficiency Act of 1998″ provides a framework of key terms and provisions, authorizing gambling operations to any federally recognized tribe with jurisdiction over Indian lands in California. This Gaming Compact, which will be offered to any tribe in California, is subject to federal restrictions or limitations, including the Indian Gaming Regulatory Act (IGRA) and any of its successors. Proposition 5 specifically provides that the Governor shall enter into the specified agreement as a “ministerial act” within 30 days of receiving a request from a tribe. Some critics of Proposition 5 contend that it does not enact a statute at all and, instead, merely directs the Governor to do an act. The initiative power is limited to enacting statutes, so if Proposition 5 does not enact a statute, then it would be beyond the power of the initiative. A second constitutional issue is whether the Governor s action of signing a tribal-state compact is truly ministerial or is, instead, discretionary. Courts generally will not order the Governor to perform a discretionary act, so if the Governor s signature is discretionary, Proposition 5 may be unenforceable in court.

Effect if Proposition 5 Passed

If proposition 5 were to pass, it would result in an increase in economic activity in California. The magnitude of the increase would depend primarily on how much certain gambling operations would expand, and new gambling activity that would enter the state. While the measure would likely result in additional economic activity in California, its impact on state and local revenues is less clear. This is because Indian tribes, as sovereign governments, are exempt from certain forms of taxation. For example, profits earned by gambling activities on tribal lands would not be subject to state corporate income taxes. Furthermore, gambling on tribal lands is not subject to certain wagering taxes or fees that are currently levied on other forms of gambling in California, for example, horse race wagers and card rooms. Finally, wages paid to tribal members employed by the gambling operation and living on Indian land would not be subject to personal income taxes.

Even with these exemptions, tribal operations still generate tax revenues. For example, wages paid to nontrivial employees of the operations are subject to income taxation and certain nongambling transactions related to the operations such as purchases in restaurants and gift shops, are subject to state and local sales and use taxes. However, on average, each dollar spent in tribal operations generates less tax revenue than an equivalent dollar spent in other areas of the California economy. Given these factors, the net impact of this measure on state and local government revenues is uncertain. For example, revenues could increase significantly if the measure were to result in a large expansion in gambling operations and a large portion of the new gambling were spending that would have otherwise occurred outside of California such as in Nevada. On the other hand, if the expansion resulting from the measure were relatively limited or if most of the new gambling represented spending diverted from other areas in the local economy that are subject to taxation, the state could experience smaller gains or potentially revenue losses.

The measure could result in a number of other states and local fiscal impacts, including an increase in law enforcement costs, potential savings in welfare assistance payments, and an increase in local infrastructure costs. We can not estimate the magnitude of these impacts. The state would incur costs for regulatory activity associated with the measure. These costs would vary depending on the number and size of Indian gambling establishments. As these state regulatory costs would be charged to the regulated tribes, the measure would result in no net increased costs to the state.

Arguments in Favor of Proposition 5

They are Native Americans representing a coalition of over 80 California Indian Tribes. The current casinos provide nearly 50,000 jobs for Indians and non-Indians. It reduces California taxpayers’ welfare payments by $50 million per year, and generates $120 million annually in state and local taxes. Historically, California Tribes have lived in poverty and welfare dependency because our small reservations have almost no natural resources and are too remote to support conventional economic development. But when federal law recognized our right to conduct limited gaming on Tribal lands, it gave us our first real opportunity to become economically self-reliant and begin to realize the American dream. Since then, Indian gaming has greatly improved conditions on many reservations. Tribal governments use casino revenues to provide health care, housing, better education for Indian children, cultural preservation, environmental protection and care for our elders. After generations of poverty, despair and dependency, our lives are better. We’re pulling our own weight and paying our own way. On reservations with casinos, unemployment has dropped nearly 50%; welfare has been cut by 68%, and in some cases eliminated entirely. Now, big Nevada casinos are trying to shut down Indian gaming in California, because they want to kill competition from California’s Indians. Their weapon is a backroom deal, cut in Sacramento, which would force the shutdown of our gaming. Unless Proposition 5 passes, this deal would result in the shutdown of video machines which provide 75% of our revenues. If that were to happen, it would be devastating for California Indian Tribes–and bad for California’s taxpayers. For centuries Native Americans have revered the land. Proposition 5 continues existing environmental protections of sovereign tribal land and provides resources for improved environmental protection. Indian gaming has already cut welfare on reservations by 68%, saving California taxpayers $50 million per year. (McCormick) Today, California’s Indians are truly pulling their own weight and paying their own way.

Rebuttal to Argument in Favor of Proposition 5

This initiative would allow the promoters to vastly expand their casino operations. They are exempt from virtually all state regulations including environmental, health and worker safety rules. These casinos pay no federal, state or local taxes on the massive profits they make. (Gribbom) Most Californians want to help Native Americans become self-sufficient. However, less than 15% of California Indians will receive benefits from this initiative. Proposition 5 is a grab for advantage by a few wealthy Indian tribes at the expense of all Californians. That’s why an extremely broad-based coalition of groups such as business, labor, seniors, educators, law enforcement, environmental, local government oppose Proposition 5. Unregulated, untaxed, and unlimited casinos are unfair to California. Most people want to help native Americans, but enacting a flawed ballot initiative is the wrong approach. (Barajas) The groups behind Proposition 5 want you to think it is about helping American Indians keep limited gambling on their reservations, but they don’t need a ballot initiative for that!(Barajas) Here’s what this initiative is really about in the minds of Vegas casino owners. California has over 150 recognized or pending tribes that could operate multiple casinos in communities throughout the state. Incredibly, the governor is mandated to sign the agreement contained in this initiative allowing casinos with no negotiation, discussion or changes! If the Governor refuses to sign the deal, then it takes effect anyway! Moreover, Indian tribes could purchase land off their reservations and open huge casinos wherever they want in California. All they need is the approval of two politicians, the Governor and Secretary of Interior. There is no local vote of citizens to authorize or reject these casinos! (Craig) These casinos would operate outside our state’s tough environmental laws that protect us against air and water pollution, toxic waste dumping and damage to our fragile coast. California is prohibited from taxing the $1.5 billion these casinos take in each year. California taxpayers would pay for all the transportation and law enforcement problems caused by Indian casinos, but not a penny in tax revenue is dedicated to solving those problems. The casinos are also exempt from California workers protection laws. They don’t even have to pay the state minimum wage or provide workers’ compensation insurance to their employees. Local law enforcement officials are prohibited from enforcing state laws against gambling crimes in these Indian casinos. It would be almost impossible for California to stop organized crime, prevent money laundering and make sure that the gambling is conducted fairly. Because these casinos pay no income taxes and are exempt from virtually all state health and safety and business regulations, they have an unfair advantage over businesses that do follow the rules and pay their fair share in taxes. Broad coalition of groups oppose Proposition 5, including environmental organizations, labor groups, business leaders, law enforcement organizations, seniors, local government, and small business owners.

Opinion

Proposition 5 creates a responsible and reasonable plan for Indian gaming now and for the future. Proposition 5 could strictly limit Indian casinos to Tribal lands without going over board. It can allow Tribes to keep the limited types of gaming we now have and allow other tribes to set up similar limited gaming. The are willing to share Indian gaming revenues with non-gaming Tribes for use in education, housing, health care and other vitally needed services, and dedicate revenues to support emergency medical services for all Californians, and to local communities near Indian casinos. Gibbon states that they are exempt form taxes, which is no true and they are regulated so that they do not take advantages of the state. Land can not be purchased and made into Indian ground. There are certain grounds that are for the Indian s. They are sovereign lands but the federal law regulates them. I would vote yes on proposition 5 because there are a lot of jobs on the line and because they are restricted to certain games. Its not like they do what ever they want to do.