SANTA FE, N.M. (AP) — Tribal casino revenues and taxes from racetrack gambling in New Mexico suggest the industry is in the doldrums or contracting in areas, according to an analysis.
The answer is yes, but the good thing about gambling tax law for big winners is that, unlike income taxes, gambling taxes are not progressive. Whether you win $1,500 at the slot machine or $1. Tribes are Tax Exempt. Gaming on Native American lands earned $26.5 billion in 2011. 236 Native American tribes operate 422 facilities across 28 states. Yet Native American tribes and their.
A brief from the Legislature’s nonpartisan watchdog agency shows a 10% decline from 2012-2018 in annual revenues that are shared by tribal casinos with the state, shrinking from $69.7 million to $62.8 million.
State tax income from nontribal gambling — dominated by racetrack casinos — declined by 3% for the same period to $61.6 million, down from $63.4 million.
Officials at the state Gaming Control Board declined immediate comment Thursday on the statistics.
The briefing from the Legislative Finance Committee notes that growth in the online gambling industry — which is not authorized in New Mexico — may be drawing a share of the market away from New Mexico casinos.
Population demographics also rein in the industry: New Mexico saw just 1% population growth during the six-year period, trailing its fast-growing neighbors Colorado, Texas and Arizona.
The state’s 24 tribal casinos share revenues with the state under complex terms of a compact renegotiated in 2015. Shared revenues are one indication of how busy casinos are, but don’t include money from table-based games and bingo-style slots that appear to be gaining ground in the industry.
Net winnings by five racetrack casinos that operate slot machines are taxed at a 26% rate.
Recently, three tribal casinos have initiated or announced sportsbooks for wagering on sporting events after the U.S. Supreme Court last year lifted a ban outside of Nevada.
Sports betting operations are illegal by statute in New Mexico, but the tribal-state gambling compacts don’t specifically prohibit it — leaving an opening for Native American casino operators.
Any move by legislators to fully legalize sports betting runs the risk of nullifying New Mexico’s revenue sharing compact with tribes that channels more than $60 million a year into the state’s general fund to help pay for state services and public schools.
Across the country, the allure of sports betting is prompting state lawmakers to sort through complex business interests and weigh opposition from some tribe-operated casinos.
It’s unlikely New Mexico would be able raise as much money from taxes on non-tribal sportsbooks as it does through current revenue sharing.
Last year, state taxation officials estimated sports betting at racetrack casinos could bring in $21 million at a 26% tax rate.
5 NATIVE AMERICAN FUNDING FACTS
Many people believe the U.S. government meets the needs of Native Americans through treaty benefits and entitlements. They perceive Native Americans receive free housing, healthcare, education, and food; government checks each month, and income without the burden of taxes. Reality is that federal treaty obligations are often unmet and almost always underfunded, and many Native families are struggling. Here are five facts to know about Native funding in the U.S.
Fact 1: Free Housing
Although the BIA has a large budget to serve the 573 federally recognized tribes (a proposed $2.4 billion for 2019), it has been cited as the least effective government agency and the most mismanaged. About 68% of BIA funding is directly used in behalf of the tribes, most of it in the form of contracts, grants or compacts involving social services, job training, school facilities, some housing improvement, and other land and management concerns. And tribal self-determination and self-governance programs have eclipsed direct services being provided by the BIA and BIE, which is good news. Still, 32% of BIA funding goes to operate the Office of Indian Services for disaster relief, child welfare, education, tribal government, reservation roads, general assistance and Indian Self-Determination; the Office of Justice Services for law enforcement, tribal courts and detention facilities on tribal lands; the Office of Trust Services for management of trust lands, assets and resources; and the Office of Field Operations with 12 regional offices and 83 agencies that carry out the BIA’s mission at the tribal level. At least 80% of their nearly 7,000 employees are Native or Alaskan Indian.
Although the BIA has assisted Native American families with housing, these homes are not free. It is common for Native families on the reservations to make housing payments to the BIA. Housing and Urban Development (HUD) has also funded some Native housing and home repairs. Still, according to the National American Indian Housing Council, some 90,000 American Indian families are homeless or underhoused, and 40% of on-reservation housing is inadequate
Fact 2: American Indian Education
Under the treaties, the federal government promised an education for all Native Americans. Some treaties spell out the promise of an education system essentially meaning secondary schools, not a free ride to college. As such, the Bureau of Indian Education operates 33 colleges as well as 216 schools and dorms serving 47,000 Native American students. Although the BIE’s mission is to provide quality education opportunities to Indian students, BIE schools are notoriously underfunded and underperforming, with their educational outcomes and graduation rates significantly lower than public schools.
At the college level, Native American students must compete for scholarships along with other Americans. Today more Native American students hope to attend college, but only 17% start college and only 13% have a college degree.
Fact 3: Casino Riches
A “casino payout” occurs when tribes disburse unused profits from Indian gaming to individual tribal members for their personal use. However, simply operating a casino does not guarantee tribal riches or mean that tribal members receive such payouts. Contrary to popular belief, fewer than 15% of Indian tribes operate prosperous casinos. In addition, only the 573 federally recognized tribes are eligible to operate casinos more than 400 tribes in the U.S. are not federally recognized.
The National Indian Gaming Commission reports only 242 tribes in 28 states operate casinos (as of 2014). Of these 242, about 88 have less than $3 million in revenue, and 96 have $10-25 million in revenue (enough to give per capita payouts, depending on the needs of each tribe and federal approval). Research shows that casinos need to be within 50 miles of a metro area (with 10,000 or more residents) to be highly profitable such as the few mentioned here. In PWNA’s experience, the rural and remote casinos do not have enough traffic to generate large profits — they do create a few tribal jobs. We also see some tribes that are prospering from gaming assisting other tribes that are struggling economically, but it’s important to remember that even this use of gaming profit is regulated by the federal government.
Fact 4: Government Checks
The Bureau of Indian Affairs (BIA) does not disburse cash to individuals, and contrary to popular belief, the U.S. government does not mail out basic assistance checks to people simply because they are Native American. Many tribal members are veterans or disabled or retired after years of serving as railroad workers, artists and educators, in tribal jobs, or in general labor. These people receive V.A. or disability or social security checks from the government, as would any other American.
Taxes Money Native American Casinos
Throughout PWNA’s service area, the main forms of governmental aid seem to be energy assistance and food commodities (arising from treaties and connected with loss of reservation lands and natural food sources). TANF is also available for single mothers but often requires them to volunteer for 40 hours a week in a supervised work program leading to job placement. Other social programs such as WIC and SNAP (food stamps) are available on the reservations; these are the same programs available to all Americans, with allocations made based on demonstrated need.
Fact 5: Native Americans and Taxes
Like all Americans, Native Americans pay federal income tax on any income they earn, including casino earnings. They do not pay state tax for income earned within reservation boundaries.
Taxes Money Native American Casino Ceo California
It is also important to understand that the lack of available jobs on the reservations fuel joblessness at 35% to 85% (varies by reservation) and that 29% of employed Native Americans live below poverty level. It is not for lack of exuberance or effort on the part of Native Americans that these conditions exist. Many of the hardest working folks we know are Native American. Rather, outside business is reluctant to invest in small, remote, and rugged reservation communities and doing so is complex given that tribal land is held in trust for the tribes but owned by the federal government, and all businesses and investors must comply with federal, state and tribal regulations. As a result, most jobs on the reservations are tribal, government, or state jobs with restrictive and historic budget cuts that limit opportunities for growth.
Sources:
BIA budget: https://www.bia.gov/sites/bia.gov/files/assets/as-ia/obpm/pdf/fy2019_bib_bh081.pdf
BIA employees: https://www.bia.gov/sites/bia.gov/files/assets/as-ia/obpm/pdf/fy2019_bib_bh081.pdf
BIA appropriations: https://www.doi.gov/ocl/hearings/114/fy16budgetbiabie_022715
BIE students: https://www.bia.gov/sites/bia.gov/files/assets/as-ia/obpm/pdf/fy2019_bib_bh081.pdf
NIGC report: https://www.nigc.gov/news/detail/2014-indian-gaming-revenues-increase