Part 1 - Look Who's Cashing In At Indian Casinos - Hint: It's not the people who are supposed to benefit

Part 2 - Playing the Political Slots - How Indian casino interests have learned the art of buying influence in Washington
Money Talks
Tax Dollars at Work
California Scheming
Nightmare Neighbors
A Tale of Two Tribes

Short Articles

Facts

Few tribes are more powerful than Florida's Seminoles, who pioneered high stakes bingo and won Supreme Court approval for Indian gaming everywhere.  James E. Billie, the Seminoles' alligator wrestling, folk singing chief from 1979 to 2001, is the person most responsible for creating the tribe's gambling wealth and also personifies its flamboyant excesses.  In a power struggle last year, the tribal council suspended Billie pending resolution of a sexual harassment lawsuit (it was recently dropped) and an audit of questionable tribal financial dealings, which is still going on.  At the time, he was the highest paid elected official in Florida, with an annual salary of $330,000.  He was responsible as tribal head for the purchase of a corporate jet and a mini-fleet of helicopters.

But Billie also shared his wealth with tribe members, who last year received individual checks of $36,000 from casino profits.  And he took care of other Seminole leaders.  Under his reign, each councilman had a discretionary fund of at least $5 million; Billie's was $15 million.  More was available if needed, and it often was.  One councilman ran through $57 million in less than four years.

Ordinarily states have no jurisdiction over sovereign Indian reservations.  But if an Indian casino wants to offer Las Vegas style games - like roulette, baccarat and blackjack - or slot machines in a state where such gambling is illegal, it must make a regulatory compact with the state.  The Seminoles have 3,160 machines that look and perform like slots.  Florida, which doesn't allow such high stakes professional gambling, also known as Class III gaming, says the machines are illegal without a compact and wants the casinos closed down.  The Seminoles claim the machines are not slots but "electronic terminals," so the tribe needs no compact.  The Clinton Administration, in one of the decisions made as it was turning out the lights on Jan. 19, 2001, issued an order approving the Seminole operation.  The incoming Bush Administration promptly rescinded the order pending further study.

But the Seminoles aren't waiting for the Federal Government's go-ahead.  They have broken ground for a casino hotel entertainment complex with a new partner, Hard Rock Cafe International.  The casino resort, which will also have convention facilities, a beach club and a spa, will add to the Seminoles' lucrative gaming business.  last year the tribe's two casinos, in Hollywood and Tampa, made a combined profit of $216 million on revenue of $254 million - a return of 85%.  By comparison, General Electric, often described by the media as America's best managed company, reported net income of $13.7 billion for 2001, an 11% return on revenue.

The Santee Sioux casino is a more modest affair.  Set on a 200-sq. mi. reservation along the Missouri River in northeast Nebraska, the gambling hall was set up in a converted cafe and has 60 slot machines/.  But soon after the casino opened in 1996, federal authorities sought to close it.  The issue:  the tribe, like the Seminoles, has no compact with the state, though it wasn't for lack of trying.

In the early 1990s the 2,700 member tribe sought a compact with Nebraska to open a casino on the reservation where some 1,000 members still live.  Nebraska refused to negotiate.  In February 1996, when the only private employer on the reservation, a pharmaceutical company, closed its small plant, the tribe, with 59% of its members living below the poverty line, went ahead anyway, opening the Ohiya Casino and installing las Vegas style slot machines.  Thalma Thomas, a Santee Sioux who managed the casino, recalls that the tribe thought it had "the inherent sovereign right and legal right" to offer Class IIi gaming because, she says, "Nebraska would not negotiate a tribal gaming compact after six years of negotiations."

The Indian Gaming Regulatory Act (IGRA), the law governing Indian gambling, seems to support the Santees' decision.  The act says, "It is the committee's intent that the compact requirement for Class III not be used as a justification by a state for excluding Indian tribes from such gaming."  No matter.  The NIGC ordered the tribe to close the casino by May 1996.  It did, with the understanding the state would work with the tribe on other economic development ventures.

When the state failed to deliver, the tribe reopened the casino in June.  Enter the Department of Justice, which sued to close the operation down.  The tribe, reluctant to end its one moneymaking venture, refused.  A federal judge imposed a $3,000-a-day levy, then upped it to $6,000.  In no time, the tribe owed more than $1 million.  Meanwhile, the Justice Department began seizing the tribe's bank accounts, including those containing funds earmarked for child safety seats and nutrition programs for the elderly.  It even took money out of individual Indians' accounts.  Says Thomas:  "they've virtually moved to shut this tribe down - the Untied States."

The uproar of negative publicity forced the government to return some of the money, but it is still holding most of it.  And there is still $4 million in unpaid fines, according to the tribe's attorney, Conly J. Schulte.  "The tribe to this day can't use bank accounts for fear that the Federal Government is just going to seize any money," says Schulte.  That thwarts the tribe's attempts to invest in any business, even one having nothing to do with gambling.

Casting about for a way out of the dilemma, Schulte and Santee Sioux representatives traveled to Washington in February 2001 to seek the NIGC's guidance.  Commission officials advised the tribe to install pseudo slot machines - like those used by the seminoles - to get around the Class III controversy.  The tribe complied - at a substantial economic cost.  With the switch to the pseudo slots, Thomas says, revenue has fallen by two-thirds.  The casino employs only 15 people, and the income barely covers operating costs.  There is no longer any money for tribal programs.

But that's the least of the tribe's worries.  The Justice Department sued the tribe again, charging that the machines the NIGC had recommended were actually illegal.  A federal judge in Omaha, Neb., disagreed and sided with the Indians and the NIGC.  But the Justice Department appealed the ruling and dispatched a squad of high powered litigators who prosecute organized crime kingpins to argue the case.  Commenting on the Justice Department's actions, Thomas says, "they have done everything they could to make this tribe out to be criminals when all we are is struggling to survive."