Gambling success brings controversy for U.S. tribe

By Claudia Parsons

LEDYARD, Connecticut (Reuters) - Most of the past 400 years have been miserable for the Mashantucket Pequot. Almost annihilated by English settlers and the smallpox, the survivors were enslaved and scattered. Reduced to just a few dozen members by the 1970s, they grew lettuce and tapped maple syrup, living in poverty in trailers on a scrap of Connecticut woods.

Gambling has changed all that.

Now, they own Foxwoods, the biggest casino in North America, and the tribe's 800 to 900 members are rich. Last month, they sported fox furs and tuxedos and sipped champagne to celebrate the opening of a $700 million extension to their empire, the MGM Grand tower.

But the tribe has found that with this success comes controversy.

Since the tribe won federal recognition in 1983, critics have questioned the authenticity of their tribal ancestry, saying that many people turned out to be Pequots when the prospect of a casino entered the picture.

Some had considered the tribe to be extinct, wiped out by the settlers and other native tribes, including the Mohegan, the traditional enemies of the Pequot, in the 1636-1637 Pequot War.

Hitting back at these critics, the Mashantucket Pequot Museum opened an exhibition on May 17, the day after the new tower was opened, called "Race: Are We So Different?"

"The American public has this idea of native people that's ingrained and it's based upon a Plains tradition," museum research director Kevin McBride said, alluding to the image of Indians in Western states "with long hair, hunting buffalo, with a teepee."

"That carries into what people expect the Pequots to look like and act like," McBride said. "They are struck by the fact there's a lot of diversity in terms of ethnicity."

One of the first items on display in the museum is a oversized photograph of some 100 tribal members ranging from fair-skinned blondes and red-heads to blacks and people who look more like the classic image of native Americans.

The diversity stems from the many mixed marriages over the last 400 years with people of different ethnicities.

Whatever the controversies over race, the business side is has come a long way since the days of bingo halls on Indian reservations in the 1980s.

With the largest square footage of gambling space of any casino on the continent, Foxwoods is the biggest player in the thriving Indian gaming industry, which was worth more than $27 billion nationwide in gross revenues in 2007.

The 30-story MGM Grand adds another 1,400 slot machines to Foxwoods' existing 7,200, as well as a 4,000-seat theater that hosted Gloria Estefan on Memorial Day Weekend in May, restaurants with celebrity chefs and a luxurious spa.

"This is beginning more and more to look like Las Vegas," Gamal Aziz, president of MGM Mirage , a partner in the development, said at an opening ceremony.

The tribe numbers around 800 to 900 people, around half of them under 18, and they receive payments from the casino profits.

"(The casino) has had such a huge impact on revitalizing our nation as a tribe," said tribe member Jason Guyot, who works for the MGM Grand five years after graduating from college with tuition funded by the tribe.

Guyot, 29, recalls his uncle working in the vegetable business that later made way for a bingo hall which opened in 1986. "Back then nobody had dreams and aspirations," he said.

CAPITAL-INTENSIVE

Since the casino opened in 1992, the Mashantucket Pequots have given some $2.6 billion to the state, 25 percent of slot revenues. As a sovereign nation, the tribe is not required to pay taxes or to make public its financial reports.

Rodney Butler, treasurer of the tribal council, said much of the profits were re-invested in the business and used to fund community services. He declined to say how much tribe members receive in per capita payments.

"It's like any other family owned business," he said. "This is a capital-intensive industry ... there's not like some bank account sitting there with billions inside."

Butler, 31, grew up near the Mohegan reservation across the river from Foxwoods. "We'd come up here and visit our cousins, there was really nothing here so we would just spend time with family and have family picnics," he said.

Now the casino employs 10,000 people directly and the tribe points to studies showing it accounts for another 30,000 jobs in the region. "It brought people back to the reservation, having that economic engine," Butler said.

Joe Smith, spokesman for the Mohegan tribe, which owns the rival Mohegan Sun casino, said his tribe's members receive around $28,000 a year each as a share of the profits.

Smith, who attributes his European-looking features to a Swiss grandfather and the "genetic lottery," said the Mohegans now enjoy a friendly cross-town rivalry with the Mashantucket Pequots, who he said were rumored to get more like six-figure payments, partly because there are fewer tribe members.

He said the Mohegan tribe has used casino profits to renovate a tribal burial ground and a park on the site of a Mohegan fort, to build low income housing and a retirement home for older tribe members and to improve infrastructure.

According to the National Indian Gaming Association, some 225 tribes in 28 states are engaged in gaming out of 562 federally-recognized Indian tribes. Only about a quarter of the gaming tribes distribute per capita payments.

Foxwoods and Mohegan Sun generate combined annual gambling revenues of around $2.5 billion, according to the Indian Gaming Industry Report by Alan Meister, an economist with Analysis Group, based on 2006 data, the latest available.

That compares to $7.7 billion revenues for 54 tribes with gaming outlets in California, or to $12.6 billion combined revenue for commercial casinos in Nevada, home of Las Vegas.

Patrick Mirabal, a musician from the Taos Pueblo in New Mexico who performed at the MGM Grand opening, said despite the growth of gaming, many tribes still have social problems.

"There's still a lot of alcoholism, drugs, domestic violence," Mirabal said. But he said the success of Foxwoods was good both for the Pequots and as a model for others.

"With Foxwoods, people tend to focus on the enormous wealth," said Angela Gonzalez, a Hopi tribe member who teaches American Indian studies at Cornell University.

"What tribal gaming development has done is really reverse this history of poverty that many tribes have confronted for years," she said. But she added that it nonetheless remains controversial, with some arguing that gambling runs counter to tribal traditions and risks making native people too materialistic.

"There's certainly a lot of mixed feelings within all native communities."

(Reporting by Claudia Parsons; Editing by Eddie Evans)

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