Native American Economic Development on Selected Reservations: A Comparative Analysis

By Vinje, David L. | The American Journal of Economics and Sociology, October 1996 | Go to article overview
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Native American Economic Development on Selected Reservations: A Comparative Analysis


Vinje, David L., The American Journal of Economics and Sociology


I

Introduction

Gambling appears to be the economic development strategy of the 1990s for many Native American reservations. Native American gambling, building on the Indian Gaming Regulatory Act of 1988, has grown from a few small bingo parlors to an estimated 200 Indian owned full scale casino gaming establishments. The momentum of Native American gambling is such that any reported statistics on casino numbers and their economic impact is out of date by the time it is published. The New York Times reports in one article that gambling, as of the end of 1993, contributed some $1.5 billion to the economy of Native Americans, while in another article published some two months later, they ascribe some $6 billion as the impact from gambling.(1) Regardless of which figure is the more accurate, it is clear that Indian gambling is the fastest growing source of economic activity on the reservations. It is providing a much needed source of reservation jobs, and it is generating tribal revenues that have gone to support reservation projects encompassing improved housing, educational scholarship, medical clinics, repurchase of reservation land held by non-Indians and the establishment of industrial parks for new business opportunities.(2)

Native American gambling has, of course, its downside. Many reservations members worry about gambling's long range impact on tribal members. Concerns range from the fear that many tribal individuals may become gambling dependent to a desire that the tribes involved pursue economic development strategies that may be more compatible with traditional Indian culture. The country's largest tribe, the Navajo, as recently as the fall of 1994 voted to reject legalization of gambling on the Navajo reservation.

Many state governors have pushed hard for the federal government to restrict the growth of Indian gambling. As of the summer of 1994, federal hearings were being held on a bill many Native American leaders believed to be only the first step in the governors' attempts to restrict Indian gambling; and, late in 1995, President Clinton was discussing the need for a broader study of Indian gambling. Economically, Native American leaders on the reservations have to be concerned regarding competition for the gambler's dollar. Even if the states are unsuccessful in their attempt to control Indian owned gambling establishments, a concern exists that the growth in Indian casinos may be so rapid as to, in effect, flood the market. The tribes involved do not have enough data, at the present, to really assess how many casinos can be supported in any relevant market area. The growth in casinos has simply been too fast, and the markets too new for this information to be available.

The purpose of this paper is to put the economic importance of Indian gambling in perspective by examining the historical record of the last three decades of economic development activity on Native American reservations. If, for any of the above cited reasons, Indian gambling was endangered, how serious a problem would this pose to tribal leaders? Is there a good fall-back economic development strategy available that could quickly replace the loss of jobs and revenue that might be associated with a decline in gambling activity?

Numerous articles talk about the success many tribes have had with new business activity. The White Mountain Apache of the Fort Apache reservation, for example, are often cited as a tribe whose ski resort, timber operations, etc. demonstrate the business potential available for tribes with strong leadership and a commitment to economic development.(3) The paper will examine this question of economic development options utilizing US Census data as of 1970 for the twenty-three most heavily populated reservations. While Census data carries with it a host of problems regarding its accuracy in dealing with Indian reservations, it does have the benefit of being consistent in its methodology in examining one reservation relative to another for any specific time period.

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