PrintIs Gambling Good for American Indians?


American Indian-owned casinos are a familiar feature of contemporary life in the U.S. They’re advertised on billboards, satirized in TV comedies, and debated in the pages of tabloids and scholarly journals. They’ve encouraged at least one false stereotype: the crazy idea that Indian tribes nowadays are rolling in money because of blackjack and slot machines. That’s just not happening.


But a growing body of research suggests that profits from tribally-owned casinos have positive effects on tribal communities.


Our previous post in Native Health News highlighted the role of casino profits in improving the mental health of youth in the Eastern Band of Cherokee Indians. Researchers from Duke University found that profit-sharing among all tribal members dramatically reduced poverty, while improving educational and behavioral outcomes for young Cherokee.


Now the Journal of the American Medical Association has published a study about the relationship between casinos, poverty, and obesity in Native communities across the state of California. Led by Dr. Jessica Jones-Smith of the Johns Hopkins Bloomberg School of Public Health, this project analyzed massive amounts of publicly available data.


Their conclusions: Native children in school districts with American Indian-owned casinos were significantly less likely to be obese than Native children in other school districts. In addition, their parents were significantly less likely to be poor.


To conduct the study, Jones-Smith and colleagues collected state-level data on regularly mandated fitness testing of children aged 7-18 years in 117 California school districts with American Indian families. Data on American Indian children were sampled for the period between 2001 and 2012. For the analysis, school districts were organized into four groups: those where a new casino opened, those where an existing casino expanded, those with an existing casino that did not expand, and those that never had a casino.


A dose of slot machines cuts obesity


When the investigators crunched the numbers, they found a classic “dose-response” relationship linking casinos, poverty, and childhood obesity. Districts with new or expanded casinos reported positive outcomes regarding poverty and obesity, while other districts did not. To quantify their results, the researchers expressed the “dosage” associated with casinos in terms of slot machines. This measure makes sense, because the number of slot machines per casino is used by the state of California to determine the amount of tax revenue that each casino pays.


According to Jones-Smith and colleagues, every new slot machine in a school district was associated with an average gain in annual income of $541 per capita, as well as with a reduction in community poverty by 0.6%. In addition, every new slot machine was associated with a reduction of 0.19% in the probability that any given child in the community would be overweight or obese.


These benefits would be substantial for any population group in the United States, but they are extremely important for Native Americans. Native people have the highest rates of poverty and the highest rates of obesity of any U.S. population. And these two rates are linked: poor people of any race are more likely to be obese than people in better financial circumstances.


The study by Jones-Smith and her collaborators, who include Dr. Kristal Chichlowska (née Raymond), a member of the Colville Confederated Tribes, adds to the ongoing debate about the effect of casinos on the tribes that operate them. Surprisingly little scientific research has addressed this question.


Tribal casinos yield mixed benefits . . .


The most extensive examination conducted so far is more than 10 years old. This is a report by William Evans and Julie Topoleski, published by the National Bureau of Economic Research in 2002. They found that the effects of American Indian-owned casinos were mixed. Overall, the advent of casinos brought increases in income, population, and employment to the tribes that operated them. Along with reductions in poverty and unemployment came a drop in mortality: a welcome result indeed! However, these benefits were partly offset by increases in bankruptcy, violent crime, and car theft.


The authors inferred that the rise in bankruptcy among Native people was related to an increase in addiction to gambling and its associated financial problems. However, the rise in individual bankruptcies appeared to be outweighed by community-wide increases in income.


Nevertheless, more recent work has uncovered more problems. The long-term Cherokee study, noted above, returned negative as well as positive findings. Contrary to Jones-Smith and colleagues, Randall Akee and his collaborators found that after the Eastern Band of Cherokee Indians began sharing casino profits, the poorest children in the community tended to become obese. The disagreement between these two studies has not yet been explained.


Another analysis of the Cherokee data by Tim Bruckner and colleagues found that, when profit shares were disbursed in a lump sum (typically once or twice a year), deaths by unintentional injury more than doubled among Cherokee men. Bruckner’s group described the profit disbursement as a “positive income shock” and detailed its association with a rise in risk-taking and substance abuse. In practical terms, the sudden infusion of cash meant more purchases of cars, motorcycles, and all-terrain vehicles, along with more alcohol and drug abuse, more vehicular crashes, and more deaths.


Bruckner and colleagues suggested two remedies for the bad effects of “positive income shocks.” First, profits could be distributed more regularly so that individual payouts were smaller and closer together. Second, attendance at financial management courses or wellness seminars could be required to help recipients handle their new incomes better. Finally, the authors observed that the “acute bumps in risky behavior” identified in their analyses should be understood in the context of “long-term aggregate improvement in health” in the Cherokee community.


. . . but the big problem is still poverty


It’s clear that casinos are no silver bullet, no magic potion capable of fixing the disparities faced by Native people today. True, casinos often bring more money into the communities that own them. Yet for some tribal members, that financial success can amplify existing problems, such as substance abuse and propensity for unintentional injury. It can also bring new harms, such as addiction to gambling.


In addition, not all tribal casinos have been profitable or beneficial to their communities. As Evans and Topoleski reported in 2002, casinos in Connecticut, California, and New York were generating huge profits, and casinos in Minnesota and Wisconsin had already reduced unemployment among tribal members. Yet the Sioux Nation had seen no profits from its gambling facilities in North and South Dakota, which include a casino on the Pine Ridge Reservation. A news article from 2007 reported that the Pine Ridge facility was still unprofitable.


Some tribes, meanwhile, continue to oppose the idea of Indian-owned casinos. In testimony before the U.S. Congress, Wayne Taylor, Chairman of the Hopi Tribe, has stated:


“The ultimate negative effect of Indian gaming is not an individual doing drugs, or becoming addicted to gambling; it is the destruction of a culture, a people, a tribe. Nations may become corporate enterprises existing only to produce a profit. . . . Producing a profit, as opposed to providing a rich cultural and comfortable life, may become the norm. That would be the worst negative consequence of all.”


Among the biggest problems that all tribes face is poverty. According to the studies just reviewed, casinos benefit tribes only when they reduce poverty. Some other mechanism might serve this purpose just as well.


Most tribal members need more and better job opportunities to bring them living wages. Most tribal governments need more revenue to build resources that will benefit their communities. For now, and for some tribes, casinos represent a way to reach those goals.


But wouldn’t it be great if we had more alternatives?




Akee R, Simeonova E, Copeland W, Angold A, Costello EJ. (2013) Young adult obesity and household income: Effects of unconditional cash transfers. American Economic Journal: Applied Economics 5(2):1-28.


Bruckner TA, Brown RA, Margerison-Zilko C. (2011) Positive income shocks and accidental deaths among Cherokee Indians: a natural experiment. International Journal of Epidemiology 40(4):1083-1090. Abstract at :


Costello EJ, Compton SN, Keeler G, Angold A. (2003) Relationships between poverty and psychopathology: a natural experiment. Journal of the American Medical Association. 290(15):2023-2029. Abstract:


Costello EJ, Erkanli A, Copeland W, Angold A. (2010) Association of family income supplements in adolescence with development of psychiatric and substance use disorders in adulthood among an American Indian population. Journal of the American Medical Association. 303(19):1954-1960. Free full text available here:


Evans WH, Topoleski JH. (2002) The social and economic impact of Native American casinos: Working Paper 9198. Cambridge, MA: National Bureau of Economic Research. PDF available at


Jones-Smith J, Dow WH, Chichlowska K. (2014) Association between casino opening or expansion and risk of childhood overweight and obesity. Journal of the American Medical Association 311(9):929-936. Abstract at