John Wayne and the cavalry are nowhere in sight. The Mashantucket Pequots
have the settlers in Ledyard, Conn., surrounded.
When a group of New Hampshire legislators went by bus for their three-hour
tour of Gilligan's Island to our south shore known as Foxwoods, somehow
they passed right through the battle lines without even noticing the state
of siege in the countryside. With eyes like saucers they went to see big
bucks, and when they returned that's all they talked about.
Foxwoods estimates that five to seven percent of its handle (we all should
learn these Indian words) comes from visitors from New Hampshire. With the
most profitable facility in the gambling industry only 115 miles from our
state border, we can learn some close-up lessons on how the state of Connecticut
has pulled off this modern fiscal miracle.
How did an obscure Indian tribe, with only a few members living on a tiny
forgotten reservation lost in the woods of a sleepy little town, somehow
go big time?
It has nothing to do with free enterprise and the entrepreneurial spirit.
It has everything to do with big government, big payoffs (made legal by
the same government) and a big sellout of local control and local residents.
In return for a piece of the action, Connecticut granted exclusive monopoly
rights to one of its Indian tribes (Native Americans is a poor coinage,
as all of us born in the United States are by definition native Americans)
to operate a gambling operation on Indian reservation land.
These lands are held in trust by the Bureau of Indian Affairs in Washington,
DC and are then governed by local tribal councils.
What did our legislators miss on their visit to Connecticut's Potemkin Village?
They missed the signs on every second tree in Ledyard saying, in big red
letters, "No annexation -- not one acre!" It seems that Foxwoods
is so successful it has run out of Indian land. No problem, because it has
enough money to buy anything it wants.
Well, no problem for them, but big problems for people in surrounding cities
and towns, because when Foxwoods goes land shopping, the tract it buys can
then go into trust and becomes part of the federally administered reservation.
The tribe, in effect, annexes land through open market purchase.
How about a little land. Okay.
How about a neighborhood of houses on a little land? Well, that may cause
a small problem if a few people in the neighborhood like where they live
and, in spite of over-market prices, want to keep their houses. If a half
dozen people on the street sell to the Indians, how do those who don't sell
live in the middle of the Indian reservation growing around them?
One other minor detail is that town zoning and local government have no
jurisdiction on Indian land. The tribe pays no property taxes on its multi-million
dollar facilities.
Slot machines alone were reported to have generated $50 million last month
for the Indians at Foxwoods. It is estimated that annual revenue will exceed
$1 billion, with $150 million going to a most appreciative and cooperative
government in Hartford, 50 miles away.
When New Hampshire became the first in the nation to embark upon the slippery
slope of legalized state lottery gambling, it promised to generate revenue
for education -- and it has.
But a funny thing happened. As education gained funding, the money that
was saved didn't go back to the taxpayers. It merely migrated into other
government spending, so that the net gain to those paying bills and participating
in this form of voluntary taxation was zero.
We now have Tri-State Megabucks and Powerball to make our gambling industry
regionally competitive. Have you ever stood in line waiting for a clerk
who was busy selling lottery tickets? Who would have ever thought that gambling
would be part of every Seven-Eleven in every city and town in New Hampshire?
At the very least, you would expect property taxes to be a thing of the
past once the gambling industry gained unlimited expansion.
A few years ago our friends in Connecticut legalized Jai Alai frontons as
the wave of the future in state funding. Somehow, they needed more. Now
it's the Indians turn to come to the state's rescue.
Surely our state legislators could do a little better research than a bus
trip into this quagmire of wide-open gambling. Could they learn anything
of value from Atlantic City? Maybe they should take another trip to Ledyard,
Conn, while its still there. This time they should look out the windows
of the bus.
Jack Falvey resides in Londonderry, N.H. He is a speaker and columnists
and has appeared on Good Morning, America. He is also regularly featured
in the Wall Street Journal.
