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April 27, 2005
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| Some U.S. senators worry that fraud is taking some of the profits Indian tribes should get from operating casinos. (MPR file photo) |
Moorhead, Minn. — There are about 360 Indian gaming operations nationwide according to federal statistics. This year the Indian gambling industry will generate nearly $19 billion.
Some members of the U.S. Senate Indian Affairs Committee fear the rapidly rising revenue makes Indian casinos a target for criminals.
Minnesota's U.S. Attorney, Tom Heffelfinger, chairs a Native American Issues group for the U.S. Justice Department. He told the committee the extent of theft and fraud at Indian casinos is unclear. For comparison purposes, he said Las Vegas casinos lose 6 percent of their revenue to theft annually.
"I have no idea if a 6 percent figure would apply in Indian gaming. But even if it's a 3 percent or a 5 percent figure, we are still talking about hundreds of millions of dollars in theft losses and fraud losses in this industry every year -- even assuming a good enforcement and regulation, such as exists in Nevada," Heffelfinger said.
Theft from Indian casinos is underreported, said Heffelfinger. He did say the Justice Department is taking a more proactive approach to Indian gaming oversight.
Indian gambling has three layers of regulation and enforcement. Under the Indian Gaming Regulatory Act, or IGRA, tribes are responsible for oversight at their casinos. States also have oversight authority as provided by gaming compacts with Indian tribes, and the federal government provides enforcement.
But Heffelfinger says limited funding restricts federal enforcement activity.
There's also concern that states aren't as active as they should be in overseeing casino operations. Kevin Washburn, a law professor at the University of Minnesota, told the committee Arizona and California have taken the lead in state oversight of Indian gaming.
"States didn't show up. Most states aren't doing much regulation of Indian gaming. And what that tells me is we need to have an independent entity doing that regulation -- and I think it's probably the NIGC," said Washburn.
The NIGC is the National Indian Gaming Commission. The agency regulates Indian casinos, but Washburn says it needs broader authority to oversee revenue generated by casinos.
Others argue tribes are already doing a good job of protecting their gambling industry. Charles Colombe is president of the Rosebud Sioux tribe in South Dakota, and treasurer of the National Indian Gaming Assocation.
Colombe says tribes take gambling oversight seriously. As an example, he told the committee his tribe has more regulatory staff for its casino than oversee the entire non-Indian gambling industry in Deadwood, South Dakota.
"There's a lot to be said about what Indian gaming is doing and the regulatory process," said Colombe. "Frankly, you're always going to have people chasing the almighty dollar. And if it looks easy, they're going to go after it."
Some experts believe the concern about theft and fraud in tribal casinos is overblown.
Steven Light is co-director of the Institute for the Study of Tribal Gaming, Law and Policy at the University of North Dakota. Light says concerns about corruption in tribal gambling are often based on the premise that tribes are unable or unwilling to regulate their own operations.
"There's relatively little evidence to back up those assertions," said Light. "Subject to three levels of regulation and law enforcement authority, the Indian gaming industry is perhaps better equipped to deter or deal with potential crime or corruption than is any other form of legalized gambling."
The system is not perfect, Light acknowledged, but he urged the U.S. Senate Indian Affairs Committee to collect more data before changing IGRA.
Senators on the committee appear convinced there should be regulatory changes to the $19 billion Indian gambling industry.
"Regulation, I think, is critically important to protect Indian gaming in the long term," said Sen. Byron Dorgan, D-N.D., the ranking minority member on the Indian Affairs Committee. "Sovereignty is very important to me and to Indian tribes, but so too is regulation of this industry."
Dorgan says the Indian Gaming Regulatory Act built a protecive fence around Indian gambling operations. He says it's time to check that fence to make sure no holes have developed.
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