Could Marijuana Follow The Tribal Gambling Route?

[ Posted Tuesday, February 3rd, 2015 – 18:22 UTC ]

As any longtime reader of this column (or, at the very least, as any reader from the last year or so) knows, I have been following the legalization of marijuana debate fairly closely, and indeed consider it to be one of the defining social issues of our age. I say this not to measure it by how important legalization is in the grand scheme of politics, but rather as one of the two issues (marriage equality being the other) which have experienced dramatic public perception turnarounds in the past decade or so. In all honesty, I've written about the subject so often in the past two years I had convinced myself that I had already written this article. When I searched my site for it, however, I found I had only mentioned the subject in passing in my year-end link dump (which consisted of "here are some other interesting stories that happened in 2014" links).

My interest was piqued because of the wide-ranging possible repercussions of a decision by the Justice Department last year that got little attention in the media. A few Native American tribes -- including one in Washington state, where recreational adult use had just been legalized -- asked the Justice Department for legal guidance on the issue of marijuana sales on tribal lands. The Justice Department, surprisingly, not only endorsed the idea but also seemed to throw the gates wide open for any other Native American tribe to grow and sell marijuana as well -- even in states that hadn't already legalized it. They essentially said tribes would have to adhere to the same set of federal legal guidelines that were created after Colorado and Washington legalized recreational marijuana sales.

My immediate reaction was that this could have far-reaching outcomes that few were bothering to point out. Which brings me (three paragraphs in, sorry about the digression) to the title of this article. Could marijuana legalization travel a similar route as legalized gambling, with Native American reservations taking a prominent lead? To put this in slightly more direct terms: Would casinos on tribal lands begin selling joints to the gamblers? And what impact would that have on the nationwide and state-level marijuana reform efforts?

These seem to be pretty basic questions to me, but then I fully remember some pretty contentious political battles over legalized gambling, which not everyone today can claim to have lived through. After all, those who grew up in an era where legalized gambling was almost ubiquitous (and, in the case of lotteries, state-run) might scratch their heads and wonder why such a concept would ever have caused a political fuss.

As late as 1977, there was really only one place in America where people could legally gamble: Nevada. That year, legalized gambling was allowed in New Jersey, adding Atlantic City as competition to Las Vegas and other Nevada gambling towns. At the time, very few states had legal lottery tickets (the first state to legalize a lottery was New Hampshire, in 1964). Gambling was seen by many as not only a vice but a downright sinful vice (church Bingo games notwithstanding). It was a political, social, and religious issue, to put this another way. Government (as the argument always goes when dealing with regulating vices) could not legalize gambling because gambling was evil and thus government certainly could not condone it -- much less profit off it). It was an early social hot-button issue, and even predated much of the Moral Majority social conservative surge in the 1980s. Because, at heart, it was a religious battle (gambling being defined as "sinful"), the political fights were intense and nasty, at times. When state lotteries began to be more accepted, as more and more states jealously eyed the revenue stream other states were raking in from lotteries, the "sinful" argument was countered with a "benevolent" argument: all revenues (for instance) from gambling would go to schools, and how could anybody be against funding our children's future? By 1985, states with legalized lotteries even began banding together in multistate lottery systems, to increase the size of the jackpots (and, thus, spur more people to buy tickets). Today, state lotteries exist in 44 states.

Alongside this change in mores among state governments was a parallel rise in tribal gambling. The first reservation to open a gambling casino (such as it was, the only game it initially offered was Bingo) was on Seminole land in Florida, in 1979. By 1985, the year of the first multistate lottery, "seventy-five to eighty of the three hundred federally recognized tribes" had commercial gambling of some sort or another. This figure would continue to grow, as more and more tribes saw the monetary benefits from exploiting this vice.

Tribal gambling (and tribal marijuana operations) are possible because tribal reservations have a strange limited immunity from some state and federal laws. They are "sovereign nations" completely contained within the sovereign states which make up the federal Union. But tribes still have to get the state's permission (in "Tribal-State compacts") to set up casinos. States which were leery of legalizing casinos statewide (due to the moral outlook of their voters, and how contentious the political arguments were, at the time) chose one of two routes to attempt to have things both ways. The first was to allow the casinos to be on tribal lands, or other heavily-restricted areas within the states. The second was to create a legal fiction, that of "riverboat casinos." The entire purpose of legalized riverboat gambling is to maintain this fiction: gambling is not legal on state land, but somehow is morally allowable on state waterways. Most riverboat casinos never move, they are simply giant barges which are permanently moored. This was, somehow, supposed to maintain the purity of the non-legal-gambling state, while still allowing the tax bonanza to roll in. The mere existence of the legal fiction of riverboat gambling stands as a reminder as to how contentious the issue of legalizing gambling was, in fact.

Legalized gambling still doesn't exist everywhere in America. Thirty states allow some form of tribal gambling (out of a possible total of 34, since 16 states have no federally-recognized tribes), but only 20 states allow non-tribal casinos. But in every state but two (Hawai'i and Utah), some form of legalized gambling is now legal (be it lottery, commercial non-tribal, tribal, or racetrack).

The Native American casinos drove a lot of this. All of a sudden, certain tribes were making a goodly amount of money separating the tourists from their cash. This was a stunning turnaround for many tribes. Today, almost exactly half of all federally-recognized tribes have casinos. It's a multi-billion-dollar industry now. It is, in fact, pretty much the only growth industry on tribal lands. A "National Gaming Impact Study" found that "no... economic development other than gaming has been found" on reservations -- which is a pretty stark and brutal assessment.

There is one other industry on reservations which bears mentioning: avoiding state taxes. On tribal lands, no state taxes are paid, meaning such things as gasoline and cigarettes are much cheaper than on non-tribal land. This is the economic niche where marijuana would fit. But it would have a much bigger impact than just cheap cigarettes, since cigarettes are still legal in the surrounding state -- they're just cheaper to buy on tribal land.

The Justice Department has now opened the door to a future tribal marijuana industry. The headline today which prompted me to write this article stated that over 100 tribes are now expressing some degree of interest in the commercial possibilities of marijuana. There will be many legal hurdles still ahead for the concept, aside from the favorable Justice Department opinion. The tribes are to be held to the same standards as the states which have now legalized recreational marijuana (which includes not allowing it to be transported to other jurisdictions), and that is going to cause problems with states that have only allowed medical use, and especially in states which have no legalized marijuana at all. Perhaps tribes will only allow for sales when the marijuana is immediately consumed in their establishment (much as liquor is served at a bar). Perhaps the threat of state cops parked at the tribal lands border will be a convincing motivator for people not to try to sneak the weed off the reservation. Perhaps the tribes will enter into agreements with the state, with some sort of revenue-sharing (the way most state-tribal gambling agreements do).

But, just as happened with legalized gambling, it's easy to see that tribal marijuana could be a spur for states to attempt to walk some sort of "have your cake and eat it too" moral line on marijuana legalization, in the same way tribal gambling or riverboat gambling does. The state could profit from the vice, while still maintaining a politically-acceptable "hands-off" policy on non-tribal lands within the state. Perhaps some states would consider legalizing (or severely decriminalizing, at least) simple possession of marijuana, while still maintaining an absolute ban on sales. This would allow citizens to travel to the tribal lands, purchase marijuana, and then return home without fear of arrest, while the state remains "pure" by not allowing sales anywhere else (and while also profiting from the sales).

Whatever happens in the realm of politics and the law in each state, the impetus towards reforming marijuana laws may become hard to resist when neighboring states are raking in millions through tribal sales. Especially on the East Coast, where states (and state budgets) are smaller and travel times to other jurisdictions are shorter. While still flying under most people's radar, tribal marijuana may become the route that overwhelming acceptance of marijuana takes in state legislatures. In the next few years, this may have even more of an impact than voter initiatives which legalize adult recreational use. Not every state even has the possibility of voter referenda, and the movement to sell marijuana on tribal lands may advance quicker -- and in more places -- than the push for full legalization. Right now, the tribal marijuana industry is not just in its infancy, it's actually in an embryonic state. But once fully birthed, it may grow faster than anyone now imagines, taking the same basic pathway to acceptance as tribal gambling did three decades ago.

-- Chris Weigant


Follow Chris on Twitter: @ChrisWeigant


4 Comments on “Could Marijuana Follow The Tribal Gambling Route?”

  1. [1] 
    TheStig wrote:

    Interesting parallels between gambling and pot. Gambling is often justified as aiding (and abetting?) education, but at least where I live, it looks more like a form of tax redistribution, with (inflation adjusted) dollars going to the school systems remaining fairly constant. The real winners (and promoters) seem to be the industries running the casinos, plus the restaurants, hotels and advertising campaigns associated with the casinos.

    Would lawmakers go so bold as trying to promote marijuana as a means to fund education? The mind boggles on that one!

  2. [2] 
    dsws wrote:

    I think the idea with "riverboat" casinos is that the rivers in question are on the border between two states, so both can pretend the boat isn't really in their state.

    I suspect the casinos won't want to be involved with marijuana, at least initially. A lot of their business depends on keeping the idea of vice at bay, and passing themselves off as relatively wholesome entertainment.

  3. [3] 
    Chris Weigant wrote:

    TheStig -

    It shouldn't. The initiative in CO (not as sure about WA) passed specifically on the promise that the tax dollars would go to the schools. In other words, it's already happened.

    And it's going to happen again. This is a winning formula for the pro-reform forces, so it'll be a recurring theme, the same way it was in the legalization of gambling (lotteries, mostly) political fight.

    The problem, as with the gambling promises, is that state governments are absolutely shameless. They get a bonanza of millions of bucks for education, and they immediately react by pulling the same amount of money out of the education budget and spending it on other things in the general budget fund. This has already happened in many states with lotteries, and I expect it will happen for weed revenues as well.


  4. [4] 
    TheStig wrote:

    The really shameless part is that selling weed within a specified distance from a school currently exacts extra penalties!!! I can handle a lot of irony, but that pushes my limits.

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