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Indian Casinos Boost Local Economies


Indian Casinos Boost Local Economies

UCR researchers report reduced poverty and higher incomes on and near gaming reservations.

(September 3, 2007)

RIVERSIDE, Calif. — Tribal gaming in California has significantly reduced poverty and improved employment, incomes and educational attainment in communities near the casinos, particularly in the poorest regions of the state, researchers at the University of California, Riverside have found.

Their report, “Lands of Opportunity: Social and Economic Effects of Tribal Gaming on Localities,” is presented in the September issue of Policy Matters, a quarterly series of reports that provide timely research and guidance on issues of concern to policymakers at the local, state and national levels.

Authors Mindy Marks, assistant professor of economics at UCR, and Kate Spilde Contreras, managing director of UCR’s Center for California Native Nations, found that gaming operations have beneficial effects on the tribes, on communities near gaming reservations and on California generally.

Because these casinos must be located on existing tribal trust lands, which typically are located in poorer regions of the state, economic activity resulting from tribal government gaming tends to concentrate employment and other benefits in counties that need economic development the most, they said.

“Tribal governments with gaming are concentrating employment opportunity in areas that are economically worse off than areas without gaming reservations,” Marks and Contreras wrote.

California tribes opened at least 25 casinos in the early 1990s, not long after Congress passed the Indian Gaming Regulatory Act in 1988. However, only four tribes opened casinos between 1996 and 2000 because of concern about the legal scope of tribal government gaming.

Tribal gaming reached a major turning point in 1999 when representatives from 61 tribal governments and Gov. Gray Davis negotiated a tribal-state gaming compact which clarified the legal parameters for gaming in California, Marks and Contreras wrote. The number of gaming facilities increased rapidly in 2000 and 2001 as tribes developed new facilities or expanded existing casinos. Today, 57 tribes operate 58 casinos in the state.

The authors’ analysis of U.S. Census data reveal that the benefits have been significant. California’s gaming tribes experienced a 55 percent increase in average income per capita between 1990 and 2000, compared to a 15 percent increase on nongaming reservations. The average income per capita on California’s gaming reservations was $12,526 in 2000, only 53 percent of the average income for all Americans, the researchers found.

The number of families living in poverty on the state’s gaming reservations dropped from 36 percent in 1990 to 26 percent in 2000, the researchers found. Even so, poverty rates were more than twice as high as the state and national averages.

“This study is important because it is the first to present the impacts of gaming on economic development for every tribe in California and their surrounding communities,” Marks said. “These findings show that it is a myth to think that all tribal members have become millionaires or that casinos are a drain on their surrounding communities. Incomes on reservations are still well below the national average. Still, the improvements in poverty rates and incomes on reservations with casinos are impressive.”

Families living near gaming reservations benefited financially as well, Marks and Contreras found. Median average family income grew faster in Census tracts within 10 miles of gaming reservations than those living farther away. California families collectively gained $3.4 billion of additional income because of tribal gaming, they said.

At the same time, the population of individuals age 25 and older who completed high school or who attended college increased significantly faster in gaming than non-gaming Census tracts between 1990 and 2000.

“As the Census analysis shows, large gaps remain between the conditions on Indian reservations in California and those enjoyed by other Americans,” Marks and Contreras said. “While the benefits of tribal government gaming in California have been substantial for tribal members and their neighbors, it will take more time for the economic and social benefits of tribal government gaming to be fully realized.”

The study was initiated by California Nations Indian Gaming Association and funded by a grant from the Pechanga Band of Luiseño Indians. However, neither the association nor the tribe played any role in shaping the study’s findings. The report is based entirely on analysis of U.S. Census data and other publicly available data. Additional support was provided by the Center for California Native Nations at UC Riverside.

The University of California, Riverside (www.ucr.edu) is a doctoral research university, a living laboratory for groundbreaking exploration of issues critical to Inland Southern California, the state and communities around the world. Reflecting California's diverse culture, UCR's enrollment has exceeded 21,000 students. The campus opened a medical school in 2013 and has reached the heart of the Coachella Valley by way of the UCR Palm Desert Center. The campus has an annual statewide economic impact of more than $1 billion.

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