Monday, September 3, 2012

Off Reservation Casinos

Here is a new and relatively common phenomenon:  Off-Reservation Gaming.
Gov. Jerry Brown is allowing two American Indian tribes to build casinos off their reservations, over the objections of some neighboring gambling tribes and members of California's congressional delegation.
The Democratic governor said Friday that he agreed with a Department of the Interior ruling granting the tribes a rare exception to the federal law that prohibits gambling on reservations established after 1988.
The law allows the Interior Secretary to make an exception when an off-reservation casino is in the tribe's best interest.
To clarify, the Indian Gaming Regulatory Act (IGRA) of 1988 requires Indian casinos to be placed on existing tribal trust land (where "existing" means that it was tribal reservation land prior to 1988), unless an exception is granted.  For the first two decades of IGRA, exceptions were rare, and they were limited to nearby annexations of land.  In fact, the Bush Administration adopted a "commutable distance" rule for new acquisitions of land to meet the exceptions.  That rule is not longer in effect.

If the sole criterion is whether the casino is in "the tribe's best interest," it is going to be awfully difficult not to satisfy that criterion.  Off-reservation casinos seem to be almost strictly preferred to casinos on the reservation.  The negative consequences of casinos (crime, problem gambling) are usually local to where the casino is located.  If tribes are allowed to locate their casino away from the reservation's population, that keeps out the riffraff.  Moreover, off-reservation gaming allows tribes to locate near population centers, which is where the consumers are.  Of course, if your view is that the casino is a tribal enterprise that will employ members of the tribe (and thereby decrease unemployment), it doesn't make much sense to locate the casino away from the workers.

This is a striking example of how important the implementation of a law is if key components of it are left to the discretion of government agencies.  I doubt John Cochrane would be surprised.  With this new wave of off-reservation gaming, the IGRA of today feels quite different from the law that was enacted in 1988.

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