If you’ve ever wondered why Native American casinos can operate under a different set of rules than the rest of the nation, Donald Craig Mitchell spells out why – and more – in his book, “Wampum: How Indian Tribes, The Mafia and an Inattentive Congress Invented Indian Gaming and Created a $28 Billion Gambling Empire.”
Native American gambling, which didn’t exist three decades ago, now rivals commercial casinos in revenue, and took in $29 billion annually in 2015, compared to the $32 billion a year at racetrack, riverboat and Las Vegas-style casinos, according to St. Louis accounting firm Rubin Brown.
“I ask myself ‘How did that happen?’” said Mitchell, an attorney who focuses on Native American affairs.
Mitchell lays the groundwork by addressing the overall U.S. policy toward Native Americans. It starts with the U.S. Army’s mandate, in place until the mid-1800s, to push Indians to west of the Mississippi, on the thinking that the Louisiana Purchase gave the white man more than enough space. But the California gold rush changed that mindset and the Army steered Indians toward reservations “at bayonet-point,” Mitchell writes. The majority of those tribes were impoverished, and attempts to assimilate them into the rest of society and the workplace failed.
A minor event at the time, in 1941, changed things. As the United States debated Indian laws and policies, Felix Cohen, at the behest of the Department of Interior, wrote “The Handbook of Indian Law,” which Mitchell describes as “polemic.” The Interior sent copies to legislators and all the members of the Supreme Court, who took Cohen’s pro-Indian slant and used it as their guidebook ever since.
The booklet spelled out what is known as sovereign immunity, the idea that federal law applies on Native American lands, but state and civil law does not. So when states approved legal, but highly regulated, bingo ($100 jackpots, twice-weekly limits, profits must go to charity), as states such as Florida did in 1967, the game became legal on Indian land – but without the civil statutes.
That gave the tribes, which were already selling cigarettes tax-free for income, an inroad into high-stakes bingo, and non-Native Americans began flocking.
And as bingo halls flourished nationwide in the early 1980’s, Congress pondered ways to regulate them. Ronald Reagan eventually signed the Indian Gaming Regulatory Act (IGRA) in late 1987, but those working on behalf of the tribe found loopholes. Most notable was the idea that electronic devices – designed to look like slot machines – could instantly play a game of bingo and reveal the results via a machine that looked very much like the slots people saw in Las Vegas and elsewhere. These games, referred to in legal circles as Class II games, turned bingo halls into casinos, and are what propelled revenues into approaching billions.
The Seminole Hard Rock Hotel & Casino in Hollywood, for example, opened in 2007 with Class II games; IGRA stipulates for tribes to offered real slots (defined as “Class III”) they needed a “compact” with their states. The Seminoles and Florida Governor Charlie Crist arrived as such a compact in 2010.
Mitchell writes of the early bingo days, especially, being managed by mob-related companies, who knew how to skim profits and even weight wheels so certain numbers would appear more often.
He also notes that because tribes lacked the funds to boot up a bingo operation, mob money came into play, in the form of investors and management contracts. For example, the Seminole bingo hall in Hollywood opened in 1979 thanks to $1 million from Miami Beach businessman Jack Cooper. Mitchell connects Cooper to Meyer Lansky, who had mob associations with casinos nationwide. Mitchell also connects startup funding in California and elsewhere with organized crime.
And with such big money now in play, suddenly a lot more people discovered their Native American roots. Mitchell writes chapters of “fake tribes” and “fake reservations,” all angling to set up casinos. Most notable is the Foxwood Casinos in Connecticut, which Congressmen challenged as a legitimate tribe, only to be ignored.
Throughout the book, Mitchell also points out the apathetic attitude of Congress, although, to be fair, many states had no Indian tribes, hence, no dog in the fight. But with more states than not now allowing commercial casinos – who face restrictions their Indian competitors don’t have – we now understand better how the Indians maximized the cards they were dealt.