SHOW ME
THE
MONEY
GRASSROOTS!
Goals      Corporate      Casino      Education      Employees      Vets      History
SHOW ME
THE
MONEY!
Aboriginal Casinos: Who’s Cashing In?


History of Gambling
Betting games have existed since the earliest of times in virtually all cultures. In the early 1600s, a public gambling
house was legalized for the first time in Venice, Italy. High Venetian society gathered in so called little houses or "casini"
to indulge in everything from business and politics to gambling. "Casino" became synonymous with vice and perdition. In
more recent history, the riverboats of Louisiana led the charge for gambling in the late 1800s and early 1900s and
eventually, the State of Nevada opened the door in 1931 by legalizing gambling.

Today in Canada casinos can be found coast to coast, from big cities to small rural towns. The development of casinos
creates debate and controversy but perhaps the largest debates focus on the development of casinos affiliated with
Aboriginal 1 peoples. Gambling among Aboriginal peoples is not a new activity, however, historically, it was undertaken
only in relation to ceremonies and religious events (Gabriel, 1996).

Casino development for commercial purposes on Aboriginal land is a vastly different entity from such traditional
practices. This report focuses on this issue in an attempt to answer the following questions: What are the legal and
political ramifications of provincial and federal support of casinos in Canada? Are the economic benefits of Aboriginal
casinos realized by the reserves who sponsor them? Are Aboriginal peoples in support of casinos on their lands? Do
the social costs of casinos outweigh the economic benefits? These are only some of the questions that were examined
and debated by an expert panel which addressed: “Aboriginal Casinos: Who’s Cashing In?” at a November 4, 2005
panel, co-sponsored by the Royal Society of Canada and The University of Lethbridge.

The Development of Aboriginal Casinos
The introduction of Aboriginal gaming in Canada began in 1984 when the Cree Nation at the Pas, Manitoba held a
federally sanctioned lottery. Eventually the lottery was raided by the RCMP and thereafter regulation of gaming on
Aboriginal lands became a provincial responsibility. The Eagle Lake reserve in Ontario held a high stakes bingo which
was raided and shut down by the Ontario Provincial Police. Such raids set the tone regarding the development of
Aboriginal gaming in Canada for the next 15 years (Belanger, in press).

The very first Aboriginal casino in Canada was the White Bear Casino in Saskatchewan which opened in 1993. It too was
raided and shut down by the local police (Belanger, in press).

Ten casinos now operating could be classified as "Aboriginal" or "First Nations," although it is worth noting the degree of
Aboriginal benefit/ownership varies considerably between provinces. Here in Alberta, there are no Aboriginal casinos
operating presently but that shall be changing in the near future.

The most successful Aboriginal casino in Canada is Casino Rama located on reserve lands of the Chippewas of
Mnjikaning First Nation. Their agreement outlines that all Ontario First Nations are entitled to ongoing net revenues
based upon a per capita allocation. In 2003-04, for example, Casino Rama generated $497 million in revenue, up $25
million from the previous year.

Saskatchewan Aboriginal groups have also had significant success with casinos in part because they hold a monopoly
over the gambling industry. The Saskatchewan Indian Gaming Authority (SIGA) currently operates four of the province’s
six casinos, and has expansion plans that would result in the construction of three more casinos in the next three years.

Studies from the United States have indicated that Aboriginal casinos are economically successful if they are close to
large urban centres (less than one hour travel time) and focus on a “destination” style casino, which refers to the
availability of other kinds of entertainment besides gambling.

The extent of Aboriginal control of the casinos varies from one province to another and each province has their own
regulation regarding how the profits are shared among other aboriginal groups in the province. In Alberta, there are 8
stages required before final approval is reached (Alberta Gaming and Liquor Commission, 2001). One of these stages
(step four) includes providing evidence of community support for a casino.

By summer 2005, there were 10 casino facility applications under examination by the Alberta Gaming and Liquor
Commission, 7 of which were Aboriginal casino applications. Alberta may have 3 Aboriginal casinos operating in 2006. If
all 10 casino applications were approved, Alberta will have a total of 26 casinos, a significantly higher number than any
other province, and one of the highest per capita casino jurisdictions in North America.

Applications from the Enoch Cree (1.5 hours west of the City of Edmonton), Alexis Nakota Sioux Nation (near Whitecourt,
1.5 hours east of the City of Edmonton), and Stoney Nakoda First Nations (between Calgary and Banff) have reached the
eighth and final stage of the approval process. The Enoch Cree casino is already half built and the casino on the Tsu T’
ina reserve southwest of Calgary has just been approved with plans to open in 2006.

Issues regarding Aboriginal Casinos
There are many complex economic, social and legal issues surrounding Aboriginal casinos as outlined below. As with
any controversy, there are also no easy answers.

Economics
All provincial governments gain from gambling behaviors of individuals across all types of communities. In 2004-5 in
Alberta, $1.2 billion was placed in the Alberta Lottery Fund from VLTs, slot machines and ticket lotteries. Charities earned
$147 million from licensed gaming activities in 2004-5 (Alberta Liquor and Gaming Commission, 2004).

For some Aboriginal groups, casino development can be viewed as a “nation” builder because they are an avenue to
address economic hardships including long term unemployment on many reserves. Studies conducted in the United
States indicated that on the whole, Aboriginal peoples receive economic benefits through casinos (Baxandall and
Sacerdote, 2005; Evans and Topoleski, 2003; Grinols, 2004). However, these same studies found that casino
introduction is also associated with higher rates of bankruptcy and crime rates. It is unclear whether the plans for 7
Aboriginal casinos in Alberta have considered this evidence when devising their plans.

The largest casino in the world is the Foxwoods Casino in Connecticut, which is Aboriginal owned, netting 3 million
dollars per day (Foxwoods Casino, n.d.) and allowing for employment opportunities on reserve. The Choctaw Nation in
Mississippi demonstrated their entrepreneurial abilities by opening a casino in 1994, which has provided local
employment while leading to other economic ventures (Band of Choctaw Indians, n.d.).

For fiscal 2004-2005, SIGA saw net revenues in excess of $100 million dollars. Its four casinos generated a record net
income of over $33 million dollars. Profits in other provinces, for particular bands, vary considerably.

Revenue distribution generated from slot machines in Aboriginal casinos in Alberta will be: 15 percent (operator), 15
percent (charities) with the remaining 70 percent for the Alberta Lottery Fund Allocation. Of the 70 percent, 30 percent is
for traditional Alberta Lottery Fund initiatives and 40 percent to the First Nations Development Fund (Alberta Liquor and
Gaming Commission, 2004). This fund was created in Alberta and is available to all Alberta Aboriginal groups to support
their social and community development and economic projects such as health, education and addiction programs. The
regulations clearly indicate that financing and operating a casino through this fund is not allowable.

Social
With any controversial activity like gambling, there are the concerns related to social issues. Although gambling was an
historical activity among Aboriginal peoples, the change to gambling in the form of bingos, slot machines and VLTs have
added to a range of pre-existing social concerns and issues notable on reserves. The American studies already referred
to have also noted that any economic benefits have been curtailed by the inherent social costs. Canadian evidence,
although scant, would suggest that the social issues associated with casinos rank high in the minds of Aboriginal
people.

Canadian provincial telephone surveys found that 10-15 percent of Aboriginal adults are gamblers (National Council of
Welfare, 2005). This figure is 3-4 higher than other ethnic groups in the same country (National Council of Welfare,
2005). In Alberta, a recent survey (household survey; n = 116, 4 focus groups with elders) conducted through
Kainaakiiski, an active Blood 2 women’s group found that the average Blood adult spends 4 times the national average
and 3 times the provincial average on gambling. When asked to report if they had a problem with gambling, 47 percent of
those surveyed replied in the affirmative compared to 5 percent at the provincial. Forty-three percent of the participants
were against a casino on the Blood reserve and 54 percent indicated they would support it if there was no alcohol served
(Kainaakiiski, 2005).

Comments from the elder focus groups were particularly illuminating. They spoke about the concerns they have for the
children of families that take part in activities such as bingo and do not spend time required for parenting.
Overwhelmingly there was no support for the casino which was seen as enhancing the current problems on the reserve,
that a casino would only lead to more corruption and that parents do not currently care enough for their children – having
a casino would only negate that further. One of the elders poignantly stated that as Aboriginal people we will “continue to
lose ourselves if there is a casino.” (Kainaakiiski, 2005).

Other concerns noted in the focus groups were that there were few places to go for help. In addition, comments in the
household survey noted the top three concerns as addiction and all the other inter-related issues, child neglect and
family problems (lack of money, food, and family breakdown) related to gambling (Kainaakiiski, 2005).

Interestingly, Aboriginal owned Internet-based gambling sites potentially ensures economic benefits for Aboriginal
peoples without necessarily having all of the social issues associated with them.

Legal
An interesting dynamic of Aboriginal casinos is the tension between federal and provincial regulations. Aboriginal
peoples by law fall under federal regulation regarding land ownership, health care services and education facilities,
among other things. However, the provincial governments assumed responsibility of gaming issues on reserves after
the initial raids in Manitoba. Thus, provincial policies have been developed to clearly articulate a process that addresses
the development and maintenance of Aboriginal casinos. The contradiction this implies has not been addressed. In
addition, in some instances, gaming has been placed under Aboriginal self-government rights and thus has been subtly
ignored by both provincial and federal authorities.

A case in point is the Alberta situation where there is the First Nations Gaming Policy (FNGP) within the Alberta Gaming
and Liquor Commission (AGLC). This FNGP was accepted by the provincial government in 2001, after the moratorium
against casino development was lifted in 1997. The policy was developed under the direction of two Aboriginal leaders
as co-leads and implemented in 2001. The process for considering casino applications is managed by the AGLC and,
in the case of the FNGP, includes eight steps (Alberta Gaming and Liquor Commission, 2001). These eight steps are:

1. A formal interest to develop a casino in the community is presented by the specific individuals or group(s);

2. The AGLC forwards a notice of expressed interest in public venues (e.g., local newspaper) advising of the interest in a
casino;

3. AGLC conducts an initial assessment to determine if basic criteria are met;

4. The AGLC Board determines if there is community support for the casino;

5. The AGLC accepts detailed proposals in regard to the development of a new casino and the applicants must given
public notice regarding their application; in addition the AGLC must give surrounding communities notice regarding the
casino application;

6. Proposal selection occurs;

7. An investigation is held to assess the key individuals involved in the selected proposal as well as the proponents of
the proposal; and,

8. A license is issued to the successful applicant.

The AGLC will consider community support through the Band Council and hence, individual Band members and special
interest groups on the reserve have the right to be actively involved in addressing their concerns regarding any proposed
casinos through communication with their Band Council.

The percentage of actual Aboriginal ownership of the casinos and the percentage of sharing of profits varies from
province to province. Thus, the push within the Alberta policy has been to ensure that all Aboriginal reserves equally
benefit.

Major Points and Things to Consider in the Future
As articulated by panel members, studies isolated to particular aspects of Aboriginal casinos, on a case by case basis,
have conclusively shown both positive and negative impacts for the host communities. Overall, whether the benefits
outweigh the drawbacks, remains a topic for debate.

Certain characteristics of Aboriginal gaming operations, which provide the most benefit to their proprietors, have
emerged. These casinos appear situated near major population centres that are able to draw from a large user base
and those established as multi-faceted tourist destinations, again drawing clients from elsewhere.

In provinces like Alberta, where the provincial government Aboriginal casino strategy would see all Aboriginal people
benefit financially from proceeds generated regardless of where the operation is located, consensus seems to indicate
locations lacking the key elements for success could be better off staying out of the casino marketplace. These reserves
stand to receive revenues for economic development in their own communities without any of the financial or social risk.

Aboriginal casinos and the complex issues which confront them are likely to be under increasing scrutiny as their
numbers grow in Canada, particularly in Alberta which appears poised to make a major foray into Aboriginal casino
operations. With the relative newness of this growing trend, the multi-faceted debate, it appears, may be only just the
beginning.

Panel Members

Yale Belanger, PhD, Assistant Professor, Native American Studies, Faculty of Arts & Science, University of Lethbridge

Robert Williams, PhD, Professor, School of Health Sciences, University of Lethbridge & Lethbridge Coordinator, Alberta
Gaming Research Institute.

Phyllis Day Chief, EdD, Coordinator, Kainaakiiski.

Chris Shade, former Chief of the Blood Tribe and former co-lead negotiator for the Alberta provincial First Nations
Gaming Policy.

Moderator:

Doyle MacKinnon, Managing Editor, The Lethbridge Herald.

Organizer:

Judith Kulig, RN, DNSc, School of Health Sciences, University of Lethbridge.




1 In this report we will be using the term Aboriginal to refer to First Nations, Inuit and Metis persons.

2 The Blood reserve is 30 miles south of Lethbridge, AB and is the largest reserve in Canada; it is considered a “dry”
reserve.

References
Alberta Liquor and Gaming Commission. 2004. Gaming policy comparisons—key points. Retrieved November 14, 2005
from http://www.aglc.gov.ab.ca/pdf/casino/first_nations_gaming_policy_chart.pdf

Alberta Liquor and Gaming Commission. 2001. Casino Licensing Process- 8-Step Process. Retrieved November 21,
2005 from http://www.aglc.gov.ab.ca/gaming/charitable_gaming/casino/8_step_process.asp

Baxandall, P. and B. Sacerdote. 2005. Betting on the future: The economic impact of legalized gambling. Rappaport
Institute Policy Brief, Volume I, Number 2.

Band of Choctaw Indians (n.d.) Economic Development History—How We Got Here. (n.d.) Retrieved November 22, 2005
from http://www.choctaw.org/economics/eco_history.htm

Belanger, Yale. (in press). First Nations Gaming in Canada: A Ten Year Retrospective. Purich Publishing, Saskatoon,
Canada.

Evans, W.N. and Topoleski, J.H. 2003. The social and economic impact of Native American casinos. National Bureau of
Economic Research, NBER Working Papers: 9198.

Foxwoods Casino (n.d.). Casino information. Retrieved December 2, 2005 from http://www.foxwoods.com/

Gabriel, K. 1996. Gambler way: Indian gaming in mythology, history, and archaeology in North America. Boulder, CO:
Johnson Books. Grinols, E.L. 2004. Gambling in America: Costs and benefits. Cambridge University Press.

Kainaakiiski. 2005. Kainaakiiski Secretariat Gaming Research. Unpublished report: Lethbridge, AB.

Kelly, R. 2001. First Nations gambling policy in Canada. Gambling in Canada Research Report No. 12. Canada West
Foundation, June 2001.

National Council of Welfare. 2005. Gambling in Canada. Retrieved December 2, 2005 from www.ncwcnbes.
net/htmdocument/reportgambling/Gambling_e.htm#_Toc522256760