First Nations have received significant benefits from gambling; however, as discussed below, these benefits have not been evenly distributed, which we argue is directly attributable to the provincial FNGP. As seen in Figure 3, three treaty zones divide the province of Alberta: Treaty 6 signed in 1876, Treaty 7 signed in 1877, and Treaty 8 signed in 1899. (A tiny portion of Treaty 4 negotiated in 1874 overlaps the province's south-eastern corner, whereas a small section of Treaty 10 negotiated in 1906 overlaps the province's eastern-central region) The three principal treaties efficiently divide the province into three geographic zones (south, central, north) for comparative analyses of FNDF revenue distribution. The number of First Nations accessing FNDF revenues from each zone is as follows: five from the south; 17 from the central; and 22 from the north. The following sections establish how the gambling revenues are being distributed and how the benefits can be measured considering that Alberta's First Nations originally proposed a gaming industry that was structured to “increase opportunities for their participation in Alberta's economy” (AGLC 2001) and give them “the means to support economic, social and community development projects as well as use charitable gaming proceeds for initiatives such as infrastructure and life skills training” (AGLC 2011). The five host First Nations (two south, three central) have been omitted from this analysis as the amplified revenues skew overall results (Treaty 7 has two casinos, and Treaty 6 has three casinos, whereas Treaty 8 has none). The purpose for omitting these data was also to provide the context needed to evaluate the non-host casino communities’ outcomes, specifically considering that they were originally intended as equal FNDF beneficiaries.
Viewing aggregate values, the northern Treaty 8 communities appear to be outstripping their Treaty partners in terms of FNDF disbursements. In 2009–2010, when the FNDF increased by 3.1 percent to $104 million, both Treaty 6 and Treaty 8 communities’ FNDF payments levelled off from the previous year (Figure 4). Only the Treaty 7 allocation increased during the same time period. This is partly attributable to the disproportionate number of non-host First Nations sited in Treaty 8 (22) compared with Treaty 6 (14) and Treaty 7 (3). The FNDF funding distribution model also plays an important role: half of the 12.5 percent FNDF non-host allocation is divided equally amongst the 40 communities.
Figure 5 however illustrates that the per community distributions are substantially less in the Treaty 6 and Treaty 8 regions compared to that of Treaty 7. The southern Treaty 7 First Nations (Kainai Nation, Piikani Nation, and the Siksika Nation) receive the highest per community FNDF disbursement. The FNDF revenue model once again partially accounts for the discrepancy: half of the 12.5 percent non-host First Nations FNDF allocations are distributed according to community size, with the largest First Nations, by population, receiving the highest percentage of FNDF disbursements. The lack of host First Nations in the Treaty 8 region means also that charity revenues are not driving local development, unlike Treaty 6 and 7 regions, whose five casinos have generated $104 million in charity revenues since 2006,6 and continue to generate on average $55 million annually for the charities.
Geographic placement of reserves leads to higher regional costs not accounted for in the FNGP. For instance, northern First Nations communities with on average smaller populations experience unique challenges. As an example, Treaty 8 contains nine very isolated communities (i.e., fly-in, non-paved logging roads, or winter roads, which in turn seasonally restricts vehicle access to those First Nations communities). This invariably increases the local cost of living as all materials must be either flown in or trucked in over long distances. Community infrastructure often pales in comparison to southern First Nations (e.g., water treatment, roadways, social capital). Northern health care expenditures are higher due to costs related to housing health care professionals in these isolated communities and for travel to obtain health care in the south. The diversified nature of the central and southern economies permits smaller First Nations to pursue a wider variety of business opportunities that are unavailable in the north. Southern First Nations are also generally better developed because they have higher populations resulting in increased access to education leading to professionally trained staffs that specialize in health, education, social services, or economic development. Based on our analysis of FNDF revenue utilization, we conclude that the Treaty 8 First Nations use the majority of their FNDF revenue to provide for basic infrastructure, whereas the central and southern communities use the FNDF for investment (also Williams, Belanger, and Arthur 2011). Finally, whereas it appears that Treaties 6 and 8 chart similar outcomes, Treaty 6 First Nations benefit from casino employment and as such a higher rate of circulating wealth.
To reiterate, those who developed the FNDF did not consider the cost of living and travel by geographic region in the revenue allocation scheme. This oversight has in part created an FNDF-related gross financial disparity between Treaty residents as, depending on a reserve's physical location, the basic necessities of life may cost significantly more on one reserve than what is found on another reserve.
Host vs. non-host First Nations
First Nations casinos are licensed and regulated by the AGLC in the same way as traditional casinos and must conform to the same regulations, including the payback percentages on the various gambling games and regulations respecting labour unions. However, there are some important distinctions. Firstly, as discussed above, First Nations casinos must operate on reserve land. Secondly, casino table game revenue is distributed differently (unfortunately, First Nation table games data is not available). Thirdly, slot revenue is also distributed differently. The host-First Nations receive 75 percent of all FNDF allocations, which have amounted to $207 million of the roughly $276 million generated for the period 2006–2010. However, there is considerable variability within this group of five, with the Enoch Cree First Nation (River Cree Casino and Resort) and the Tsuu T’ina First Nation (Grey Eagle Casino) the main beneficiaries (Figure 6).
The remaining 40 provincial First Nations divide the remaining $70 million, which from 2006 to 2010 amounted to less than $1.75 million per community—or approximately $575 000 yearly. With the exception of the five host communities, gambling represents a relatively small activity, economically adding roughly 2.3 percent to the average First Nation budget. The distribution of revenue as a function of host versus non-host status is displayed in Table 2. All provincial First Nations are direct recipients of FNDF funding but, to reiterate, further evaluation of the FNDF demonstrates that the host communities are entitled to 81.8 percent of available funding, leaving 40 First Nations to divide the remaining 18.2 percent amongst themselves. This is calculated as follows: as shown in Figure 1, 15 percent of slot machine revenues is set aside for the casino operator and 30 percent is allocated to Alberta. Of the remaining 55 percent, 15 percent is assigned to the First Nations charities and 40 percent is allocated to the FNDF. At this stage, three-quarters of the FNDF (which amounts to 30 percent of the total fund) is thus allocated for use by host First Nations, with the remainder set aside for non-host First Nations use. In sum, 45 percent of the 55 percent allocated to the FNDF for First Nations access, or a total of 81.8 percent is assigned for host First Nations utilization.
Table 2. FNDF contributions to host First Nations as a percentage above federal payments, 2006–2009
| || Federal Contribution || FNDF || FNDF as Percent of Federal Contribution |
|Total (4 Host First Nations)||$152 190 628||$126 782 624||83.3%|
| Yearly Average || $12 682 552 || $10 565 219 || |
|Total (21 Non-Host FNs)||$1 056 942 912||$24 235 068|| 2.3%|
| Yearly Average || $16 776 872 || $384 684 || |
Being a host does not necessarily guarantee success, for two of the more expensive casinos brought in minimal returns or experienced revenue drops last year (see Belanger and Williams 2012). The Stoney Casino and Resort appears to be doing better in comparison, but when the original $27 million investment is factored in, it makes less than $4 million in annual FNDF allocations and less than $2 million in annual charity revenues. The Alexis Nakota Sioux Nation lost money in 2009–2010 based on its reduced FNDF payment and its drop in charity revenues (Belanger et al. 2012). The latter metric is a more accurate measure since charity revenues are a reflection of slot machine revenues and gambler spending. The Cold Lake First Nations also lost money from 2008–2009. Tsuu T’ina management maintains that the casino has met anticipated projections and that hotel expansion plans have been approved. Nevertheless, even the struggling host communities are doing quite well compared with their non-host counterparts, an outcome directly attributable to the FNGP.
In addition to a Treaty disparity and a regional disparity, an urban-rural disparity is evident in the placement of the casinos in the chosen host communities. This is almost certainly due to the fact that the River Cree Casino is just outside of Edmonton and the Grey Eagle Casino is just outside of Calgary, whereas the remaining three casinos are located in rural areas. Reserves were originally established to segregate First Nations from Canadian society and most were located sizeable distances from urban areas (Dockstator 1993; Mawhinney 1994). Once assimilation occurred, it was assumed that the reserves would be abandoned, decommissioned, and the lands turned over to provincial jurisdiction (e.g., Dickason 1992). This outcome did not unfold as expected and today most reserves are still geographically removed from mainstream Canadian society and likewise still in need of considerable economic stimulus. The lack of local development and the distance from potential customers suggests that Alberta's decision to demand First Nations casinos be built on reserve land jeopardizes the success of casino operations. Furthermore, no consideration was given to potentially erecting First Nation casinos in any provincial city.7
There are specific reasons for these disparities. Both the Tsuu T’ina and Enoch Cree Nations were at one time located at measurable distances from Calgary and Edmonton, respectively, but local municipal growth combined with urban sprawl has closed that gap significantly in recent years. The remaining three casino sites offer unique challenges, specifically as they relate to potential customer catchment. For example, based on the expertise of the managers operating First Nations casinos with whom we communicated, a casino needs 40 000 potential customers within a 50 km drive to maintain profitable long-term operations. The casino located on the Cold Lake First Nation reserve near the City of Cold Lake draws its customer base from an inadequate number of potential patrons (n = 24 982), as does the Eagle River casino (n = 34 164) operated by the Alexis Nakota Sioux Nation, which is located 100 km west of the First Nation (Statistics Canada 2006).8 The Stoney Casino and Resort, located between Calgary and Banff on Hwy 1 (TransCanada Highway), boasts a catchment population of 77 000, thereby appearing to operate with an adequate customer base. The casino is located a 30 minute drive from Calgary and a minimum 20 minute drive from Banff and Canmore. But the facilities are not easily visible from the main thoroughfare travelling east (the TransCanada Highway), and the advertising signage in both directions along the roadway fails to clearly offer motorists, who are targeted potential customers, adequate notice of the upcoming casino and hotel.
An important feature of the urban-rural disparity identified above in the host/non-host section becomes evident when the casino employment figures are evaluated. In fiscal 2009/2010, the five First Nation casinos had a total of 1030 employees. Of this number, 800 (77.6 percent) were employed at what would be classified as urban casinos (Enoch and Tsuu T’ina). It is difficult to obtain precise payroll information, although it is known that the Grey Eagle Casino employs 500 for an annual payroll of $15 million and the Stoney Nakoda Casino employs 35 individuals for a payroll of $1.025 million per year. The average wage in both cases was slightly under $30 000 per individual. Precise data was not available for the Enoch Cree Nation, the Alexis Nakota Sioux Nation, or the Cold Lake First Nations. However, if a similar average wage is assumed, then an estimated projection total payroll is conceivable, as seen in Table 3. Collectively, it is estimated that in fiscal 2009/2010 the five First Nations’ casinos payroll was $31 025 000, of which 77.3 percent is attributable to the two urban casinos. The total number of employees and total payroll fell below initial expectations. Current employee numbers represent 78 percent of initial projections, whereas the $31 025 000 payroll represents 82 percent of original projections (Belanger et al. 2012). The River Cree Casino is the only facility that exceeded expectations. The percentage of employees who are First Nation is also largely below expectations. The River Cree Casino and Resort employs a total of 800 people, 300 at the casino and 500 at the accompanying resort/hotel complex. Collected data indicate that 25 percent of resort employees are First Nations, a total of 125 people, of which an estimated 100 reside at the Enoch Cree Nation (see Williams, Belanger, and Arthur 2011). Extrapolating for casino employment, 75 employees (25 percent) would be Aboriginal descent. An estimated 16 percent of the 500 Grey Eagle Casino workers are Aboriginal individuals. The majority of these are from the Tsuu T’ina Nation, residing both on reserve and in Calgary.
Table 3. Employment in Alberta First Nations casinos
| First Nation || Casino || # First Nation Employees || Total Casino Employees || Known or Estimated Payroll |
|Enoch Cree||River Cree||75 (25%)a||300b|| $9 000 000|
|Tsuu T’ina||Grey Eagle||80 (16%)a||500||$15 000 000|
|Alexis||Eagle River||21 (18%)||120|| $3 600 000|
|Cold Lake||Casino Dene||N/A||80|| $2 400 000|
|Stoney||Stoney Nakoda||30 (100%)a||30|| $1 025 000|
|TOTAL|| ||206||1030||$31 025 000|
Similar to most casinos, 70 percent of the Eagle River Casino (Alexis Nakota Sioux Nation) staff is full-time and 30 percent part-time. Only 18 percent of the Eagle River Casino employees are Aboriginal. This may be due to the 100 km distance between the reserve community and the reserve casino site, which is located adjacent to Whitecourt. However, the Alexis Nakota Sioux Nation does have a bus shuttling employees twice daily to the casino. The percentage of Aboriginal employees in the Casino Dene is unknown. Only the Stoney Nakoda casino has a preponderance of Aboriginal employees, which is estimated to be 100 percent. This example demonstrates that it is unnecessary to hire non-Aboriginal individuals for the majority of casino positions.
Overall, however, if the majority of employees are non-Aboriginal, most of the casino wages then leave the First Nations communities, which is a principal point of concern. Conceding the lack of Cold Lake First Nations data, the four host-First Nations identified draw an estimated $5 321 000 in earnings out of a total payroll of $31 025 000, which is 17.2 percent of the aggregate annual payrolls. Although 84.4 percent of First Nations employee wages is estimated to return to the host-First Nations (i.e., a percentage of First Nation employees live off-reserve), an estimated $25 704 000 in wages annually leaves host-First Nation communities, the majority into the municipal Edmonton and Calgary economies (Williams, Belanger, and Arthur 2011). However, a significant percentage of the five First Nation casino charities do employ First Nations people, with approximately 170 employees, 90 percent (n = 155) of which are Aboriginal. With the exception of the Northern Isga Foundation at the Alexis Nakota Sioux Nation, information is not available documenting charity full-time versus part-time employment, and the percentage of First Nations employees who were also residents of the local First Nation community. The Northern Isga Foundation (NIF) currently employs 19 First Nations and two non-First Nations individuals (Alexis 2009, 6) with an annual payroll estimated at over $400 000 (Alexis 2009, 3). Using $20 000 as an average wage, it is projected that the total payroll for the First Nations charities is roughly $3.4 million, with the First Nations themselves retaining $3.1 million of these wages.9
In total, in recent years, it is estimated that upwards of 155 (charity casino employees) plus 206 (casino employees) plus 200 resort employees are of Aboriginal heritage, for an estimated total of 561 employees. These positions represent jobs that did not exist prior to the casino and resort openings. Although the prior employment status of these individuals is not known, it can be expected that a portion of these individuals were unemployed or underemployed prior to their casino-related employment. Anecdotally, informal interviews with First Nations officials and community members suggest that many of these people were said to represent the better skilled individuals in the communities who had been employed prior to the casino, thus potentially cannibalizing band administrations and local reserve businesses. More research is required examining these trends.
Finally, the FNGP generally ignores urban Aboriginal peoples (Belanger and Williams 2011). In 2001, the FNGP's ratification year, nearly half of the national population who self-identified as Native lived in urban areas. According to the Alberta government (Alberta 2012), 63 percent of Aboriginal people in Alberta live in major urban areas. The Alberta government and First Nations all the same excluded urban Aboriginal peoples from direct FNDF access, and First Nations have chosen to restrict urban band members’ access to gaming revenues (Belanger 2011a; Williams, Belanger, and Arthur 2011). Despite federal acknowledgement of the need for coordination and collaboration between different levels of government to mitigate the difficulties experienced by urban Aboriginal populations, there remains no discernible indication that “basic issues of jurisdiction and responsibility are being addressed” (Graham and Peters 2002, 18). Urban émigrés are deemed to have voluntarily abdicated their rights to federal programming (Belanger forthcoming), and conventional political orthodoxy presumes that a Native person's “home” cannot be sited in multiple centres (Borrows 2000). With regard to urban Aboriginal band members and the general non-status urban Aboriginal community, the Alberta-First Nations gaming agreement does not dictate how a First Nation is to utilize gaming revenues, saying “dollars distributed from [the FNDF] would be available for economic and community development, addictions programs, education, health and infrastructure projects” (Alberta 2004, 15).