Fiscal Impact of American Indian Gaming on Non-Indian Local Governments

Intense growth in American Indian gaming over the past two and a half decades has resulted in suggestions of impact on non-Indian communities with a resulting growth in tribal-local government interaction. Although there is mounting evidence of both positive and negative socio-economic impacts on non-Indian communities as a result of Indian gaming operations, to date, there has been very little exploration of the actual fiscal impact on non-Indian governments as a result of these operations. This thesis serves to examine this impact. This study uses a combination of an extensive literature review, tribal-local government survey, GIS techniques and a quantitative examination of data ranging from casino factors to the Census of Governments to explore this topic. The primary method of this examination includes a longitudinal difference in difference model looking at the impact of the opening of an American Indian gaming operation between the years of 1983 and 1997 on non-Indian government revenues and expenditures within a 50 mile radius of the operation. The results of this research indicate that at an aggregate level there is no significant correlation between revenues and/or expenditures in non-Indian governments (within a 50 mile radius of an American Indian gaming operation) and the opening of American Indian gaming operation. There is, however, evidence to support increased sales and property taxes as well as decreased local welfare expenditures correlated to the opening of an American Indian gaming operation. The model also demonstrates a correlation between the opening of an American Indian gaming operation and decreased State intergovernmental revenue transfers.