Indian gaming and beyond: tribal economic development and diversification

South Dakota Law Review, Fall, 2009 by Alan P. Meister, Kathryn R.L. Rand, Steven Andrew Light

In conducting an economic contribution analysis, a study area must be defined. The study area is the geographic region in which one wishes to measure economic contribution. It can be defined as one or more states, counties, cities, or zip codes. The stud area used in the economic impact analyses cited herein was the United States. States. (61)

An input-output analysis yields three standard measures of economic activity: output, wages, and jobs. Output equals the dollar value of production or sales. Wages consist of income earned by households, including self employed individuals. Wages include tips and benefits, such as health insurance and retirement payments. Jobs are person-years of employment.

The input-output analysis cited herein was conducted using the IMPLAN economic impact modeling system. (62) IMPLAN was originally developed by the U.S. Department of Agriculture's Forest Service in cooperation with the Federal Emergency Management Agency and the U.S. Department of the Interior's Bureau of Land Management. (63) IMPLAN has been in use since 1979 and is widely used and accepted for conducting economic impact and economic contribution analyses. (64) The data and accounts underlying IMPLAN closely follow the accounting conventions used in the "Input-Output Study of the U.S. Economy" by the U.S. Bureau of Economic Analysis and the rectangular format recommended by the United Nations. (65)

Because of Indian gaming's unique situation, namely that gaming facilities are operated by tribal governments rather than commercial enterprises, the standard IMPLAN model and underlying data were customized in the cited analyses to reflect the average wage per employee and average output (i.e., revenue) per employee at Indian gaming facilities; transfers of profits from Indian gaming operations to tribes and the uses of such profits by tribal governments; and direct payments made by tribes to federal, state, and local governments. (66)

2. Fiscal Benefits Analysis (67)

Fiscal benefits generally refer to the financial gains to governmental bodies from a project, business, or industry. These benefits may accrue to federal, state, and local governments. In terms of Indian gaming, significant fiscal benefits are generated for each of these types of governments. First and foremost, however, Indian gaming directly benefits tribal governments. As intended by IGRA, tribal governments are the primary beneficiaries of Indian gaming. (68) Tribes may use gaming revenue to fund tribal government operations and programs, provide for the general welfare of their constituents, and promote tribal economic development. (69) Since 1988, tribes have historically used gaming profit to support a variety of social and economic programs and services, including health care, housing development, educational programs, elderly care, vocational training, environmental services, loans, scholarships, and business development. (70)

Indian gaming also generates significant fiscal benefits for non-tribal governments. In the cited research, (71) two types of non-tribal fiscal benefits were identified and quantified: tax revenue and direct payments by tribes.