In novel and talk, Steele warns of more casinos

KENT — It has been called one of Connecticut’s biggest problems: the emergence of Indian casinos and the potential legalization of online gambling. 

Author and former Congressman Robert Steele spoke on this issue as well as his new book, “The Curse: Big-Time Gambling’s Seduction of a Small New England Town,” at the Kent Memorial Library on Saturday, Oct. 25. 

This issue has become extremely relevant in the town over the last several years with members of the Schaghticoke Indians seeking federal recognition.

The novel is set against the explosion of casino gambling that began in Connecticut during the 1990s, when the Mashantucket Pequot and the Mohegan Indian tribes built the world’s two biggest casinos, Foxwoods and Mohegan Sun, in the southeastern corner of the state.  

Steele’s novel begins with the Pequot War in 1637, then jumps 350 years to the end of the 20th century, when a family becomes embroiled in a struggle to block a third casino that threatens the town and ancestral home where the family lives.

Steele has a distinct vantage point on the subject. He served as a congressman for eastern Connecticut in the 1970s and then was a neighbor to the Mashantucket Pequot Reservation. He developed an appreciation of the political maneuverings that helped bring in the casinos and got a first-hand view of their impact on the surrounding area and the state as a whole.

Steel said the issue of Indian casinos originated in 1988, when the federal government passed the Indian Regulatory Gaming Act, which was designed to help regulate gambling on Indian reservations, as well as help struggling tribes raise money. 

The act allowed federally recognized tribes to legally develop casinos or other gambling operations on reservations as a means of generating income. In the 26 years since the act was passed, roughly 500 Indian casinos have been developed in nearly 29 states across the country.

In Connecticut specifically, the development of Foxwoods and Mohegan Sun was originally believed to be a huge benefit to the state. It was going to bring in roughly 20,000 new jobs and millions of dollars for the state through shared slot revenues. 

However, Steele explained, the development of the casinos has primarily had a negative effect of the state. While new jobs were created at the casinos when they first opened, in recent years both enterprises have begun to significantly cut the number of jobs available as well as downsize full-time jobs into part-time to help reduce their costs and eliminate the need for employment benefits. 

The shared slot revenue has also become a serious issue, reaching as high as $480 million at its peak only to drop to roughly $280 million currently, a number that has decreased over the previous 32 straight months. 

In 2009, Steele said, a study by an independent commission discovered that since the opening of the two casinos, Connecticut has experienced a 400 percent increase in the number of embezzlement charges, a figure roughly 10 times the national average. This discovery led the New London Day to dub the southeastern section of Connecticut the “embezzlement capital of America.” 

Steele believes the casinos have created a pervasive gambling culture within the state and also hurt local economies by creating an excess of low-paying service jobs and forcing small businesses in the surrounding towns to shut down for good.

With the development of restaurants, hotels and shops inside the casinos, customers coming for the casinos have no need to go outside the casino to do business, so there is little or no benefit to local shop owners. 

To emphasize this point, Steele shared a story about a good friend who owned a successful restaurant within a few miles of Mohegan Sun. Originally under the impression that the increased tourism brought about by the casino would help increase customer traffic in the restaurant, the owner quickly found out how wrong his assumption was — and was forced to close the restaurant just 28 months after the casino opened.

Concerned with the impact of these casinos on local as well as national economies, the federal government developed the Institute for American Values to study the impact of the casino explosion, Steele said. They reported that roughly 11 million people in the country suffer from gambling addictions, with another 15 million at risk. Crime rates have gone up as well as debt and bankruptcy rates.

When Foxwoods first opened it was one of 10 casinos in the 12 states that make up the northeast section of the country. Today, it is one of 77 casinos in the area, with a new casino recently developed in Rhode Island and plans for more in New York and Massachusetts. 

These new options are cannibalizing Foxwoods and Mohegan Sun, Steele said. There has been a 32 percent decline in slot revenue. The casinos are beginning to go into debt.

Steele blamed these problems on new legislation from the federal government. Previously, in order to be federally recognized, tribes had to prove they had existed as a distinct social and political group from the Colonial period until the present. 

However, that requirement has now been reduced, and tribes currently only need to prove they existed on reservation land as far back as 1934. This could greatly increase the number of recognized tribes and allow for more casinos to be developed, further exacerbating the problem.