Minnesota Clear Leader in Indian Gaming Industry

By Dewey, Barbara | THE JOURNAL RECORD, August 11, 1992 | Go to article overview

Minnesota Clear Leader in Indian Gaming Industry


Dewey, Barbara, THE JOURNAL RECORD


By Barbara Dewey

Associated Press

MINNEAPOLIS _ Minnesota's Indian gambling industry is zooming toward the $1 billionyear mark with little of the regulatory scrutiny that law enforcement officials say is needed to keep crime and fraud out of the casinos.

Four years have passed since Congress gave Indian tribes the right to run casinoyle gambling in states where similar gambling is allowed off reservations. In that time, Minnesota has emerged as the clear leader in the Indian gaming industry.

An estimated $900 million were bet at 13 casinos and bingo halls on Minnesota Indian reservations in 1991. That's nearly twoirds of the estimated $1.4 billion wagered last year at more than 100 Indianerated gambling centers across the country.

The combination of a massive cash flow and a shortage of regulatory oversight is an invitation to trouble, some experts say.

"It's the same fear you would have if you don't regulate offservation gambling," said Michael Cox, general counsel for the National Indian Gaming Commission. "It's the potential for large sums of money to be changing hands illegally. Gambling always attracts organized crime and criminal elements."

Several state and federal agencies have been assigned roles in the regulation of Indian gaming. But their efforts have fallen short due to a lack of personnel or legal authority, or simply due to the rapid growth of the industry. The National Indian Gaming Commission, created by Congress to help regulate Indian gaming, is still writing regulations and doesn't expect to be fully up and running until November. The U.S. Bureau of Indian Affairs is handling some of the commission's duties temporarily. The bureau only recently announced plans to beef up staff for more thorough background checks and scrutiny of companies hired to run Indian casinos. Minnesota has only three enforcement staffers working full time on the issue, though state officials acknowledge they have had primary responsibility for regulating Indian gaming. The U.S. attorney's office in Minnesota is shifting people from other duties to work on Indian gaming and says eventually it will need more people.

"My office and other federal authorities, plus the state gaming people ... are spending a tremendous amount of time on this issue," said U.S. Attorney Tom Heffelfinger.

"We have uncovered evidence that I will not discuss ... but that causes me to investigate further."

State officials say a regulatory "gap" between 1988 federal law and the explosion in the Indian gaming industry has forced Minnesota to become in some respects the primary regulator of Indian gambling in the state _ and, for a time, the only regulator.

But federal officials question whether Minnesota can adequately oversee a vast and growing casino industry with a regulatory staff designed for bingo halls and slot machines.

"That's like managing a parking lot as compared to the Empire State Building," said Tony Hope, chairman of the National Indian Gaming Commission.

"It's not as if Minnesota is turning a deaf ear to this. I just don't know if they know how to respond to a changing situation."

Indian leaders don't dispute arguments that their casinos need to be regulated, but warn that regulation shouldn't be allowed to strangle the economic boom tribes are enjoying.

"There needs to be some oversight," said Leonard Prescott, a Sioux who was the first chairman of the National Indian Gaming Association and now heads the tribal corporation that runs Mystic Lake Casino in Prior Lake.

Prescott says federal authorities are "more concerned about regulations than economic development of the tribes. …

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