According to a recent working paper co-authored by UCLA Luskin’s Randall Akee, a professor of public policy and American Indian studies, tribal casino operations increase wages for American Indians, and per-capita distributions of casino profits may have helped raise living standards for tribal members residing on reservations.
Tribal Casinos Improve Local Economic Conditions, According to New Study
American Indians living on reservation lands, whether or not their tribe operated a casino or offered cash transfers, experienced a 46.5% increase in real per capita income, compared with 7.8% for the United States overall, the study finds. Casino revenues enabled tribes to strengthen their economic foundations by investing in infrastructure and expanding employment opportunities. In addition, some tribal nations distributed unconditional cash transfers funded by casino profits to support tribal development and improve citizen well-being.
When a casino-owning tribal nation implemented a cash-transfer policy, its citizens received a substantial financial boost. If the nation chose to provide unconditional transfers, all tribal citizens were eligible to receive them, regardless of whether they resided on the reservation. Interestingly, such programs represent some of the earliest and longest-running examples of universal basic income in the United States.
IGRA Played a Major Role in the Increase of the Standard of Living in Indian Reservations
Tribal lands in the United States have historically faced some of the most severe economic challenges in the country. Before 1988, tribal gaming was limited to small-scale bingo halls and card games on reservations in states such as California and Florida, while high-stakes casinos were only permitted to operate in Nevada and New Jersey.
However, after Congress enacted the Indian Gaming Regulatory Act (IGRA) in 1988, the number of US census tracts with Tribal casino operations grew dramatically – from almost none in 1989 to nearly 600 by 2019. The IGRA requires that Tribal casino revenues be used to support tribal economic development and community welfare, including contributions to local charities.
In the first twenty years following IGRA’s passage, American Indians living on reservations saw an approximately 11% decline in childhood poverty. Additionally, 7% more American Indian women started participating in the workforce, compared with a 3% increase nationally.
Furthermore, Indian communities saw a 4% drop in overall unemployment, in contrast to little to no change for the country as a whole. Today, tribal casinos make up an industry that emerged in the early 1990s and now generates more than $40 billion each year. However, there’s more progress to be done as the American Indian poverty rate was 19.6% in 2024, which is greater than that year’s national average of 12.1%.