As reported by: The Billings Gazette
While Indian gaming is becoming a big industry in other parts of the country, it's still a small-stakes enterprise in Montana, a study released this week shows.

The Indian Gaming Industry Report, prepared by Alan Meister of the Los Angeles-based Analysis Group, showed that tribal gambling revenues grew by 12 percent to $16.2 billion in 2003, and nongaming revenues at Indian gaming facilities rose 16 percent to $1.5 billion.

In Montana, however, gaming revenue at Indian casinos contributed a negligible $14.9 million to the nationwide total, and nongaming revenue was just $1.6 million. Only Alaska, where there is no video gambling, reported smaller revenues - $8.4 million.

Number of machines down

And although the number of Montana tribes with gaming facilities increased from six to seven between 2002 and 2003, the number of tribal gaming machines dropped 12.6 percent, from 794 to 694. In California, by contrast, where Indian gambling was a $4.2-billion industry in 2003, there were slightly more than 56,000 tribal gaming machines.

The nature of Indian gaming in Montana is apparent even in the names of gambling establishments listed in an appendix to Meister's study. In California, Indian casinos have flashy names such as Auga Caliente Casino, Diamond Mountain Casino and Fantasy Springs Casino.

Typical names in Montana are the Git-N-Go in Wolf Point, the Dyno-Mart in Ronan, the B&S Laundry in Brockton and Joe's Jiffy Shop in Pablo.

Nationally, Indian gaming has grown rapidly. From 1988, when the Indian Gaming Regulatory Act was passed, to 2003, the average growth rate was just under 39 percent, according to Meister's report. From 1994 to 2003, the growth rate was almost 19 percent. Indian gaming revenues rose from $121 million in 1988 to $8.5 billion in 1998 and $16.2 billion in 2003.

Still lagging behind

Indian gaming still lags behind non-Indian gaming, which had revenues of $26.5 billion last year, but the rate of growth in Indian gaming in 2003, 12.1 percent, far outpaced the 1.4 percent increase in gaming revenue at non-Indian casinos.

In his report, Meister attributes the increasing popularity of Indian gaming to an increase in the number of Indian gaming facilities; an expansion of gaming options; the attraction of nearby casinos, as opposed to distant non-Indian casinos; and the addition of nongaming amenities such as hotels, restaurants and shopping centers to existing casinos. Meister also said that gamblers generally spend more when they gamble close to home.

Gordon Belcourt, executive director of the Montana-Wyoming Tribal Leaders Council, said Montana tribes are hoping to take better advantage of the popularity of Indian gaming. He said a small working group is still laboring on legislation that will be submitted to the 2005 Montana Legislature.

The proposed legislation will have to go out for study and discussion to all tribal councils in the state, Belcourt said, but the goal is to have it ready by December. The Legislature convenes in January.

Belcourt said the legislation will probably key in on two things - the necessity of conducting detailed marketing analyses for each reservation to determine what kinds of gaming would be profitable, and granting tribes the authority to offer expanded gambling options. Doing so would make reservation casinos into "destination" spots that would attract tourists and other off-reservation clients, he said.

Electronic poker and keno games and pari-mutuel wagering are the only Class III types of gambling allowed in Montana. Other Class III forms of gaming that could be sought by the tribes include slot machines, craps, roulette and house-banked card games like blackjack.

Nationally, Belcourt said, 75 percent of jobs created by Indian gaming establishments are filled by non-Indians. He said the Legislature needs to realize that allowing tribes to offer expanded gambling would have regional economic effects, not just effects on the reservations.

At the same time, he said, the Legislature has to acknowledge that tribes need to have the power to do something about reservation unemployment rates as high as 70 and 80 percent.

"The impact of unemployment on the reservations is just horrendous, and nobody seems to be reacting to that on the state or federal level," Belcourt said.

Gambling on Montana's seven Indian reservations is regulated under compacts with the state, though one tribe, the Blackfeet, still has no compact. Other compacts have expired and are on temporary extensions.

Gene Huntington, administrator of the Gambling Control Division of the Department of Justice, said the tribes now are allowed to offer the same games as non-Indian businesses, with a couple of small variations. Some of them are also permitted to offer payouts of up to $1,500 on video poker and keno machines, while the limit at non-Indian casinos is $800. Also, the state limit is 20 gambling machines per business, but on most of the reservations casinos are allowed to have up to 100 machines.

Sen. Dale Mahlum, R-Missoula, chairman of the state Gaming Advisory Council, has been meeting with representatives of the state's reservations to discuss the compacts and other issues related to Indian gaming.

He said the proposal to have market analyses done for all the reservations is a good one, but is hampered by the tribes' unwillingness to work together. The tribes would also have a much better chance of passing favorable legislation if they presented a united front in Helena, Mahlum said.

"I think that's a stumbling block," he said. "I hope it isn't."

As for expanded gambling options on the reservations, Mahlum said that's going to be a tough sell. Too many Montana legislators, particularly those from Eastern Montana, live in small towns where the community gathering spot is a tavern with a handful of gambling machines, he said.

The people who own those taverns don't want to compete with large, destination-gaming resorts on nearby reservations, he said, and their legislators are probably going to listen to them.

Mahlum said one idea he has floated would involve having the tribes seek legislative authority to pool their resources and open two large casinos, one in Eastern and one in Western Montana. He said he has also suggested that the tribes, which can't be required to pay state taxes, might advance their proposals by offering to share some of their gaming proceeds with the state. Mahlum said he would like see the state's share of Indian gaming proceeds dedicated to educational spending.

Meister's gaming study said that revenue-sharing plans are increasingly popular across the country. California Gov. Arnold Schwarzenegger recently signed deals with several tribes to allow for expanded gaming in exchange for increased revenue sharing with the state.