Indian Gaming and Buying Local

The Mashpee Wampanoag gaming compact discussion (whether 21 percent is too high; whether Massachusetts gaming law is constitutionally valid) should, I think, take an additional factor into consideration. Massachusetts is, for lack of a better term, buying local. Massachusetts had no legal obligation to enter into a gaming compact with an Indian tribe. Leaving moral obligations aside, what did Massachusetts do? It bought local.

Compare the tribe to KG Urban, an equity development boutique whose address is Park Avenue, New York. I assuming without knowing for sure that profits from the Massachusetts casino they would propose would largely leave the state. Profits from a tribal casino would largely stay in the state. It is possible that KG Urban would pay more in taxes than a tribal casino would (this is usually the case in other states) but the large gaming corporations that run non-Indian gaming operations take their profits elsewhere (maybe where Mitt Romney puts his profits). I’d like to know if the increase in taxes on a non-Indian gaming operation offset the locality of Indian gaming profits, but I bet it’s on the side of tribal gaming. Going with a corporate gaming entity will generate those “lost revenues” state tax officials are always taking about more than tribal gaming, in other words. The state and tribe will be more significant commercial partners — both have the same interests at stake. Under our Morton v. Mancari/political status analysis of Massachusetts gaming law, local tribal control is a rational, political reason for sticking with tribal gaming (as opposed to just doing it because they like Indians, which trends toward a race-based reason).

For the tribe, this is significant as well. Massachusetts going with a tribal compact instead of a corporate (non-Indian) deal seems to be a meaningful concession, maybe on taxes, maybe on other things. It’s a tax-for-commercial partnership swap. Maybe that’s not what Congress meant in 1988, but it’s something that takes into consideration real-world economic interests.