Gambling: A tribe hits the jackpot

  • Poker table in progress

    Deadwood Visitors Bureau
  • Indians playing cards

    University of Montana Archives
  • Clinton Pattea, Ft. McDowell Yavapai tribal president

    Elizabeth Manning
  • Mona Nunez in front of remains of her first childhood home

    Elizabeth Manning
 

FORT McDOWELL, Ariz. - It started as a traditional cowboy and Indian battle - one the Indians were supposed to lose. At 6:00 on a May morning in 1992, a team of FBI agents accompanied by eight Mayflower moving vans invaded the Fort McDowell Reservation. Armed agents broke into the tribal bingo hall and began carting slot machines into the vans. SWAT teams set up guard on the roof.

By then the Indian telephone network was awake and at work. The first calls came from tribal members at the hall. From neighbor to cousin to friend to the media, the message spread: Come down to the gaming center and bring a car or pickup. By the time the vans were ready to roll, the Indians had hemmed in the 18-wheelers with heavy machinery and dozens of vehicles, including the tribe's small fleet of sand and gravel trucks. More seriously, the FBI agents faced a thoroughly awake and angry Yavapai Nation.

As the Indians saw it, this was sovereign land and the FBI was stealing the only dependable livelihood they had managed to find in a century of white rule. Tribal president Clinton Pattea recalls, "After they loaded the trucks, our people blocked the entrance. It was a rather scary situation. They came in without any notice."

"It was lucky for them we're not a violent tribe," says tribal member Nimrod Thomas.

Given the sudden confrontation, anything could have happened. What did happen was the arrival several hours later by helicopter of Arizona Gov. Fife Symington, the toughest-talking and most pugnacious governor in the West. Whether Symington knew it or not, he was coming to negotiate his unconditional surrender.

Civil disobedience appeared to be the only option the tribe had. Pattea says he and other Indian leaders had been trying for years to meet with an Arizona governor to start negotiations over the slot machines. Negotiations were required under a 1988 federal law sanctioning Indian gaming, but the tribes' advances had been rejected by former Govs. Rose Moffort, Evan Mecham, and finally Symington. If the vans left with the slot machines, the tribe would have lost all leverage.

The confrontation must have shaken the governor. Four other raids on Indian casinos that morning had gone well for the FBI. Then he heard of the Yavapai blockade. Fearing violence or a forced agreement less to his liking, Symington started talking.

Within an hour and a half, he and Pattea had worked out a temporary standoff: The slot machines would stay in the vans, but the vans would stay in the gaming center parking lot pending further negotiations. In the following weeks, Arizona's tribes staged powwows next to the vans while the machines baked under the desert sun. Public sympathy swelled.

A little more than a year later, the Fort McDowell Yavapai tribe had a 10-year compact with Symington and a fully legal and open casino. By April 1994, Symington had signed similar compacts with 16 of Arizona's 21 tribes. Phoenix is now ringed by three casinos; 12 others are spread across the state.

“They were a great example for all the tribes in the nation,” says Carolina Butler, 61, who helped the Yavapai fight an earlier battle against a dam that would have flooded part of the reservation. “And they’re a tiny tribe. Immediately, you see David and Goliath. It’s so easy to roll over you when you’re tiny.”

From David to casino mogul

It’s not so easy to roll over the Fort McDowell Yavapai now, says Butler, a Mesa resident who describes herself as a “Mexican-American housewife turned activist.” She says she’s seen the tribe develop from not knowing how to send a telegram in 1972 to running a multimillion dollar business in 1996.

The casino’s earning power has exceeded the tribe’s wildest expectations. Though Pattea won’t reveal the tribe’s exact profit, he offers a ballpark figure of $100 million annually. “It’s been tremendous,” he says.

The money allows the tribe to give each adult of the 850-member tribe an annual income of $36,000 plus free medical and dental insurance. If the casino continues to prosper, young children in school today will receive a trust fund of up to $500,000 when they graduate from high school; high school dropouts don’t get the money until they turn 21.

The tribe has also aggressively weaned itself from dependence on outside governments. Tribal members no longer take welfare from federal, state or county governments. And the federal Bureau of Indian Affairs — with its social workers, housing programs and natural resource advisors — is mostly gone.

Even as it provides income and services for its members, the tribe earmarks 30 percent of its earnings for future economic development. The investment is required under the 1988 Indian Gaming Regulatory Act, but Pattea also knows it’s important insurance for the future.

Gov. Symington makes no secret of his contempt for the Indian casinos. When the Salt River Pima-Maricopa tribe, Fort McDowell’s neighbor to the southwest, tried to negotiate a compact last spring, Symington announced he would refuse any new compacts. The tribe is crying discrimination, but Lisa Hauser, counsel to the governor, says it was just the luck of the draw. Salt River was the first tribe to approach the governor after a 9th Circuit Court of Appeals case permitted California to forbid slot machines on Indian lands, says Hauser. The ruling is not the last legal word, but it does give Symington a temporary edge.

Symington’s unequivocal goal is to phase out Indian gaming as the existing compacts expire. “Native Americans have a monopoly right now,” he says. “They have 10 years to profit from that monopoly. Then it comes to an end.”

The casino

It’s hard to imagine “The Fort” standing empty. Open 24 hours a day, seven days a week, this enormous casino is never silent. Even at 8 a.m., slot machines blink, beep and clink as early-morning and late-night gamblers carry cottage cheese containers full of coins around the cavernous slot room, scouting a lucky machine. The line for the $2.95 breakfast buffet stretches almost into the 1,600-seat bingo hall.

The tribe reports that every day some 10,000 customers try their luck here at bingo, poker, slot machines, live keno or off-track betting on greyhound races. Each week, the tribe nets $1.5 million to $2 million from gamblers’ losses.

“Location is everything,” say real estate agents, and Fort McDowell has it. Only 23 miles northeast of downtown, it’s the closest of the three Phoenix-area casinos. This one gets an extra boost from the large number of “snowbirds” that roost in the sunbelt; retirees fill the casino during the day while younger patrons are off at work.

Outside the casino, it’s relatively quiet. The casino is at the southernmost end of this skinny 25,000-acre reservation that runs in a strip along the Verde River. The parking lot affords a panoramic view of Four Peaks, Red Mountain and the Superstition Mountains, all home, to the Kakakas, or little people, who protect the Yavapai. Subdivisions spreading east from Scottsdale into the Sonoran desert end abruptly at the reservation’s border; the tribal land is wilder, less manicured.

“The Fort” didn’t just spring up suddenly among the mesquite bosques. With the help of a management firm that provided the investment money and expertise, the casino started modestly as a high-stakes bingo hall in 1984, says Mona Nuñez, a tribal member who heads personnel for the casino. The tribe could have sat back and let the management firm run the show for a 30 percent take of the casino’s profits. But it wanted the added revenue and expertise of running a business, so in 1990 it bought out the management contract.

After doubling the size of the bingo hall, the tribe decided to bring in the now-famous slot machines. They were actually video poker and bingo machines, says Nuñez, and the tribe decided they were “Class II” machines and not subject to state jurisdiction. The Indian Gaming Commission, however, ruled that they were “Class III” — the type states regulate. That’s when the FBI raided.

Since the governor signed Fort McDowell’s compact, the tribe has expanded twice, more than tripling the casino’s size. Completed in 1994, this is the building that stands today. Now it has 475 slot machines, more than 70 poker tables and a 300-seat restaurant.

As Fort McDowell has grown bigger, so has its purchasing power. Businesses come to the reservation now, seeking contracts for everything from the satin jackets sold in the gift shop to office furniture and bingo cards. “They visit us just like they would a factory outlet center,” says Nuñez.

The casino has become one of the area’s largest businesses, employing 1,300 workers, most of whom commute from nearby cities like Phoenix, Mesa, Fountain Hills, Scottsdale and others. It takes a mix of talent to run a casino: everything from skilled accountants, managers, slot technicians and poker dealers to minimum-wage food servers and money changers.

Most positions pay average casino wages, starting at $4.25 an hour plus medical benefits and a pension fund. It may not sound like much, but many employees say they were underemployed before.

“For five years, I had a ‘roach coach.’ I sold lunches at the Mayo Clinic (in Scottsdale) and at construction sites,” says Sherry Williams, assistant food and beverage manager for the casino. “They treat us well here.”

The casino has meant new careers for some. Tribal member Eric Dorchester works in the casino’s computer division. He maintains the network and develops programs specific to the casino’s needs.

“Before, all I knew about computers is it’s a box,” says Dorchester, who used to work as a pipe fitter for a gas company. “To me, it’s playing. I don’t have to get down on my knees.” His daughters now play computer games at home on an old unit discarded by the casino.

But most community members have little to do with the daily operations of the casino. Nuñez says many members quit their casino jobs when per capita payments began two years ago. The latest wave of resignations came last October, she says, when the payments became monthly rather than quarterly. Overall, tribal employment at the casino dropped from 68 to today’s 22.

The community

The per capita payments have proved a double-edged sword. Roughly half of the tribe has put the money to good use, estimates Dolly Brudevold, director of Behavior Health Services for the tribe. The other half is in trouble.

The more successful money managers are educated tribal members who are accustomed to working, she says. Those people have bought a new car or taken a family trip. But they are also looking ahead and investing, realizing the money probably won’t last forever. Some went through a brief “fantasy of free spending” and are now becoming financially responsible. Many are taking advantage of financial management seminars offered by the tribe.

It’s the bottom half of the tribe Brudevold worries about. These tribal members typically haven’t held jobs and many have problems with addiction to drugs or alcohol. For them, the money hasn’t changed anything, except perhaps the magnitude of their mistakes.

Unfortunately, the people who need the most help are also the most difficult to reach, says Brudevold. Tight family networks have kept the tribe together through poverty and adverse times such as the FBI raid, but they also make tribal members wary of telling their problems to outsiders.

“The per capita payments were probably done prematurely,” she says. “We didn’t have a chance to stabilize some of the social ills.”

Now the tribe is playing catch-up. Brudevold says the tribe has had to protect the financial accounts of some elderly members whose children were stealing from them. It also sometimes deducts the cost of foster care from the monthly checks of irresponsible parents.

“When you have a community of people not used to the luxury of a steady income and large sums of money, you create some distortions of what wealth is and how to use it,” she adds.

That threat of distortion looms largest for young people. With more than 50 percent of the tribe’s population under 18, how they react to the money will determine the community’s future. The short-term results haven’t been encouraging, says Brudevold: The high school drop-out rate rose by 20 percent after per capita payments began.

She predicts those numbers will stabilize soon, as the tribe develops more programs to help youth, such as the first junior rodeo, held last month at the tribe’s new 4,000-seat arena. And at least the money is there now for college, says Pattea. “Before, we had a difficult time sending our kids to college.”

In addition to direct payments to individuals, the tribe has put roughly another third of the money into services and community buildings. With 230 people employed by the tribal government (compared to 15 in 1960), the tribe now has the means to help nearly anyone who wants it, says Pattea. That has meant taking over services formerly provided by federal agencies such as the Bureau of Indian Affairs and Indian Health Services. The tribe is also constructing new buildings to house those services; some $24.5 million has already been spent or set aside for community improvements such as a gym, a healing center, a preschool, a health center, and water and sewer lines for the reservation.

Over the next two years the tribe will also build some 60 new homes for its families. The tribe owns the homes and rents them for $100 to $300, just enough to cover maintenance, says Pattea. These aren’t the box-like homes built previously by Housing and Urban Development. The new pink stucco three- to five-bedroom homes with red tile roofs look like the ones in neighboring Fountain Hills, a swishy desert subdivision whose claim to fame is a gushing fountain as tall as the Washington Monument.

The irony of the Yavapai constructing upscale new homes is not lost on Mona Nuñez. She says Fountain Hills was planned here because the developer thought Orme Dam, which would have buried most of the tribe’s land under water, was a sure bet. Fountain Hills was designed to sit alongside a lake, rather than next to a reservation.

Charlotte and Gordon Roehrig moved into one of the tribe’s new homes last Christmas. They had been living in a cramped Mesa apartment because of substandard housing on the reservation. “It’s a dream, you know, getting a new home and being able to say its yours,” says Charlotte Roehrig. Finally, with another 30 percent of the money, the tribe is looking to the future  — to the days when gambling might be illegal, or legal everywhere in Arizona. The tribe has built a new gas station along the highway and strengthened its existing sand and gravel operation. It is also planning to plant 1,500 acres of pecan, walnut and citrus trees, says Pattea.

Tribal leaders are also considering building a small shopping center, a golf course, water park, convenience store and possibly even a destination resort. And if by some chance gambling does become legal throughout the state, adds Pattea, the tribe might buy a casino in downtown Phoenix.

A grand experiment

Relying on gambling for this grand experiment in self-sufficiency has its risks. Even if Indian gambling in Arizona escapes a gubernatorial clampdown, another more widespread threat looms over the tribe’s new prosperity.

Anti-gambling forces are convincing more and more Americans that the social ills associated with the industry aren’t worth the benefits  — even for Indian communities.

It’s happened twice before, says gambling scholar I. Nelson Rose. The nation’s first era of widespread gambling ended with the spread of Jacksonian morality, aided by numerous corruption scandals. The second wave, which started during Reconstruction and the push West, ended with the great Louisiana lottery scandal of the 1890s.

There wouldn’t have to be a scandal at Fort McDowell — which has a pretty clean record, except for allegations of a tip-pool scam. Any evidence of widespread corruption at an Indian casino, combined with moral objections, might be enough to topple the Indians’ house of cards.

Gov. Symington’s complaints against Indian gambling are both economic and moral. Fort McDowell only pays federal, not state, taxes on its per capita payments and casino payroll. Competition from Indian casinos has hurt the horse and dog tracks, which provide large revenues to the state government. Most gamblers at Fort McDowell are non-Indians who pay state taxes.

“It’s a wealth transfer from our economy to theirs,” he says. “So on one side of the ledger, we’re going to ruin lives. On the other, we’re helping Native Americans. Gambling is an unhealthy culture. I consider it to be a very cruel form of taxation.”

Whether gambling is good or bad for the nation is now being discussed in Congress. A bill to conduct a two-year study of gambling’s social and economic effects just unanimously passed the House. It will likely get voted on by the Senate in the next few months.

In Arizona, the individual stories of addiction are harrowing, but Don Hulen of the Arizona Council on Compulsive Gambling admits there are no real statistics for the state. But based on other state studies, he estimates that roughly 5 per cent of the state’s population has a lifetime predeliction for gambling addiction. He points to an Iowa study where the addiction rate jumped from 1.7 percent to 5.4 percent after riverboat gambling was introduced.

President Pattea’s defense is the industry standard. “In this country, we have freedom of choice to do what we want for entertainment. Self-discipline is something maybe a few of them don’t have.

“We try to believe it’s entertainment,” he says.


Elizabeth Manning is an HCN staff reporter.

The following sidebar articles accompany this feature story:

- Life is a game, but bingo is serious

- The nuts and bolts of Western gambling

- I made $52,000 in 1994 and never bought a pair of shoes that whole year

- Navajos say no - then maybe - to casinos

... as well as another feature story in this issue:

- Deadwood pays dearly for gambling riches