The economic impact in Southern California by the Indian gaming industry
In the United States of America, statistics by the National Indian Gaming Commission indicates that approximately 360 Indian gaming establishments are in operation. The establishments are managed and operated by 220 tribes that are recognized by the federal government. The gaming establishments offer Class 1, 2, and 3 gaming opportunities to their customers (Akee, 2015). The gaming establishment, therefore, generates substantial revenue. The Indian gaming establishments located in the eastern part of the United States make roughly 3.8 billion dollars annually. Those found in the central USA record gross income of 5.9 billion dollars annually, while those on the western part of the USA generate 4.8 billion dollars in revenue annually. The most significant segment of the revenue generated by Indian Gaming industries is from casinos located near large metropolitan areas (Akee, 2015).
Additionally, 12% of the Indian gaming operators generate 65% of revenue from Indian gaming. Indian gaming operating in areas that are densely populated, such as the West Coast, primarily California, represents the fastest-growing sector of the Indian gaming industry (Akee, 2015). Indian gaming in south California has increased the number of young adults moving back to the reservations, fueled an increase in population in the location, increased adult employment by 26 percent, and decreased people working poor by 14 percent. In southern California, the employment to population has increased, and mortality decreased considerably (Akee, 2015). Don't use plagiarised sources.Get your custom essay just from $11/page
Indian gaming industry uses its revenues from different sectors. Some of the utilization of the gross income is paying off capital facilities such as construction, buying of goods and services for operations and maintenance, on labor and employment of the workforce to work in the casinos. Additionally, many of the Indian gaming industry players make payments to the California state for reimbursement for regulatory oversight and the cost of infrastructure. In the Indian gaming industry, the casinos transfer the income after deduction of expenses to the tribe owning the casino (Klepeis, 2016). The income is then spending on according to the priorities of the owning tribes that result from the operation of its political institutions. This expenditure, therefore, cut across various services responsibilities of the government and programs such as civil protection, public works, and the health sector, Management of natural resources including land, education sector, housing, and other economic developments (Klepeis, 2016).
In California, tribal Indian gaming operations generated 7.8 billion dollars in the output according to the reports of 2014. Approximately 4 billion dollars of the revenue represented the spending the casinos on goods and services. On the other hand, 3.8 billion dollars represented the expenditure on secondary functions by firms that supplied services and products to the casinos, the individuals who reported increased income as a result of spending by the casinos and the firms that received increased revenue as a result of increased income (Klepeis, 2016). The Indian gaming casinos and the connected operational have much staff attached to offer services. Notably, the resources and materials used in this casinos source many of the resources and materials they use in their operations locally, therefore, having a substantial impact on the local economy, which then reverberates throughout the economies of the region and to a large extent, the entire State of California (Klepeis, 2016).
The Indian tribal gaming and the non-gaming operations related to the Indian gaming combined directly support an estimated 51,300 jobs in California. Across California State, the Indian gaming industries employ as many people like the cut and sew apparel manufacturing industry, more workers than the pharmaceutical and medical manufacturing industry, and the commercial aviation industry (Kodish, 2016). The gaming industry has approximately 51,000 people working directly for the casino and about 30,000 jobs from industries that supply goods and services to the casinos. The Indian gaming and non-gaming activities, when combined, generate approximately 472 million dollars in state and local tax employees revenues. Furthermore, the working for the Indian gaming casinos pay state taxes in addition to the payroll, sales taxes, and use taxes for purchases (Kodish, 2016). In general Indian gaming industry contributes a significant percentage of California state taxes and south California local taxes. The contribution is obtained through the gaming or compact fees and also through direct taxes generated by the gaming companies spending at the business in the state (Kodish, 2016).
A good number of Indian gaming operators in California State have within their workforce a significant number of former welfare recipients. Therefore translates to the reduction of the number of persons on welfare rolls. The employment of welfare recipient individuals thus reduces the burden on taxpayers both in the state and the federal government. Furthermore, the revenue and earnings from the Indian gaming industry spend in southern California on services such as college, building houses, construct other infrastructures, and invest in enterprise activities (Kodish, 2016).
Under the Indian Gaming Regulation Act, the state cannot tax reservations. However, the state can negotiate a compact payment. Therefore tribes in many cases pay approximately 10 percent of their profits from gaming to the state. The act requires that the gaming industry players agree with the state compact if one is requested (Kodish, 2016). Therefore the Indian gaming industry players can negotiate with the state of the local governments. The compact is settled on the basis that the gaming industry puts a strain on the traffic and the emergency services sector in the state. Using the proceeds from Indian gaming, some of the players have build hospitals that are staffed with doctors and nurses. Other gaming tribes have established health clinics, specialized clinics such as dialysis centers, and fattiness centers, among others. Additionally, many of the tribes involved in Indian gaming try to increase the hope of the local communities by improving schools in the areas (Kodish, 2016).
In the local communities living in southern California, economic and labor impacts are extensive. In the more significant California state, 90 percent of the people employed by the Indian gaming industry are from local communities. Some of the gaming facilities in southern California are in very remote and economically depressed areas making the casinos the biggest employers in these areas (Kodish, 2016). The wages and other benefits provided to employees by the industry is more than the market wages from the same labor pool in the state. Furthermore, the economic power that the gaming industry brings in the location they operate in significantly benefits the communities. The gaming industry also works tirelessly in the provision of services that generate economic benefits to the tribal government and the local communities (Akee, 2015).
The growth of the Indian gaming industry has increased the demand for skilled personnel, therefore, increasing vocational and professional training for casino workers. Universities and colleges in southern California offer gaming management courses that include instruction in gaming operations, marketing, hospitality, security, and regulations. In university, students have the opportunity to choose from several programs that last between one to four years. The programs include a bachelor’s degree in casino management. The Indian gaming industry has expanded the education sectors in the state (Akee, 2015). The expansion of the education sector has created jobs for trainers and staff working in institutions that offer programs in gaming and casino management.
Majority of the customers visiting the Indian gaming businesses operated in south California come from other states. Therefore the activities of the Indian gaming industry have increased the number of tourists arriving in the state for gaming and other events. The high rate of tourism has increased the region’s hotels and dining industry (Akee, 2015).
On the other hand, the Indian gaming industry has negative impacts on the economy of southern California. The adverse effects include an increase in auto theft, violent crime, and bankruptcy in the locations where the gaming operations take place. The Indian gaming industry operates as monopolies and has fewer or no tax obligations to the state, therefore possibly diverting funds from a taxable activity (Wu, 2015). Other negative impacts of Indian gaming in southern California are a dependency on the tribal governments, low school attendance among students, and decreased willingness to work. The Indian gaming operators sell gasoline and cigarettes for a much lower price compared to the general population. The tribes can sell products and services at lower prices because they are not obliged to pay taxes to the government. However, low rates of services and goods offered by Indian gaming industry players have created a monopoly by driving other non-Indian gaming players off the markets (Wu, 2015).
One of the main concerns attributed to gaming and casino activities is an addiction and economic losses caused by compulsive gamblers. The compulsive gamblers are likely to play with money meant for food or mortgage, use the credit card and be in debt they are unable to pay, engage in illegal activities such as stealing or embezzling to keep up with their gambling habits (Wu, 2015). In some cases, gamblers have resorted to suicide due to losses at the casino. Furthermore, the Indian gaming industry player has lost homes and cars while engaging in the game; therefore, suffering economic losses as a result of gaming (Wu, 2015).
Research conducted indicates that the Indian gaming industry, with the cheap food and drinks that are not taxed, creates a monopoly, therefore, bringing unfair competition to the local hoteliers and restaurants in southern California. Many of the lottery and Para mutual operators in south California reported that they could not compete with the players operating under the Indian gaming umbrella (Wu, 2015). Furthermore, the Indian gaming industry has exported the burden of addicted and pathological gamblers to south California. Therefore the business created room for organized money laundering, organized crime, and disrupted cultural integrity occasioned by the political instability of the tribes (Wu, 2015).
In conclusion, the Indian gaming industry has both positive and negative economic impacts in south California. The positive effects include creating employment opportunities for the local communities, improving infrastructure and services such as health care and education in southern California. Furthermore, the Indian gaming industry has increased taxes for the state and local government by providing salary tax to the government. Some of the negative impacts of the Indian gaming industry in south California include an addition to gaming, money laundering, creation of a monopoly because of tax pardon of the Indian gaming industry players, therefore, driving local non-Indian gaming players out of the market.
References
Akee, R. K., Spilde, K. A., & Taylor, J. B. (2015). The Indian gaming regulatory act and its effects on American Indian economic development. Journal of Economic Perspectives, 29(3), 185-208.
Klepeis, N., Dhaliwal, N., Hayward, G., Acevedo-Bolton, V., Ott, W., Read, N., … & Repace, J. (2016). Measuring indoor air quality and engaging California Indian stakeholders at the Win-River Resort and Casino: collaborative smoke-free policy development. International journal of environmental research and public health, 13(1), 143.
Kodish, S. R., Gittelsohn, J., Oddo, V. M., & Jones-Smith, J. C. (2016). Impacts of casinos on key pathways to health: qualitative findings from American Indian gaming communities in California. BMC public health, 16(1), 621.
Wu, S. T., & Chen, Y. S. (2015). The social, economic, and environmental impacts of casino gambling on the residents of Macau and Singapore. Tourism Management, 48, 285-298.