J. Anthony Cookson has published “Institutions and Casinos on American Indian Reservations: An Empirical Analysis of the Location of Indian Casinos” in the Journal of Law & Economics. Here is the abstract:

This paper empirically investigates the institutional determinants of whether a tribal government invests in a casino. I find that the presence of Indian casinos is strongly related to plausibly exogenous variation in reservations’ legal and political institutions. Tribal governments that can negotiate gaming compacts with multiple state governments, because tribal lands span state borders, had more than twice the estimated probability (.77 versus .32) of operating an Indian casino in 1999. Tribal governments of reservations where contracts are adjudicated in state courts, rather than tribal courts, have more than twice the estimated probability (.76 versus .34) of investing in an Indian casino, ceteris paribus. These findings suggest that states’ political pressures and predictable judiciaries affect incentives to invest in casinos. This study contributes, more generally, to the empirical literature on the effects of institutions by providing new evidence that low-cost contracting is important for taking advantage of substantial investment opportunities.

“Ceteris paribus” by the way means “all things being equal.”

Interestingly, this paper builds on Anderson et al. from a few years back suggesting that Indians living in PL280 states are richer because of state jurisdiction:

Building on Anderson and Parker (2008), this paper provides empirical evidence that Public Law 280 state court jurisdiction engenders Indian casino investment, which may itself lead to per capita income growth (see regression results in Anderson and Parker [2008], as well as Evans and Topoleski [2002]). Narrowing the scope of the response variable to a single important segment of the reservation economy enhances the validity of the estimates of my regressions. Instead of using broad measures of economic progress (for example, Anderson and Parker [2008] use per capita income) as the dependent variable, I use the presence of a casino investment by 1999.

But Carole Goldberg’s response to the Anderson paper (In Theory, In Practice: Judging State Jurisdiction in Indian Country, 81 University of Colorado Law Review 1027 (2010), sadly is not discussed in Cookson’s paper. Prof. Goldberg writes in one passage I find particularly important:

For purposes of empirical research, this statutory assignment of tribes to one category or another raises the possibility of selection bias. In other words, if Congress selected the mandatory states and their tribes because these tribes were the most assimilated or because they were otherwise the best positioned to achieve economic success, then that very selection would determine the outcome of higher per capita income and not whether the reservation was subject to state jurisdiction as opposed to tribal jurisdiction. There is, in fact, reason to believe that Congress chose tribes for inclusion and exclusion from Public Law 280 based on their inclination to participate in the market economy and to strive for economic success as measured by per capita income.

Ultimately, for me, it doesn’t seem to make any real sense to conclude that anything except location and economics markets force us to reach the conclusion PL280-state Indians are richer (or have greater casino investment opportunity) than non-PL280-state Indians. State jurisdiction is a red herring. If the states studied included South Dakota, North Dakota, and Montana (bad gaming markets) instead of California, Minnesota, and Wisconsin (better gaming markets), and the studies reached the same conclusion, then I’d be more persuaded.

If anyone wants the Cookson, Anderson & Parker, or Goldberg papers, let me know.