AIRWAY HEIGHTS, Wash. — A glittering casino that has brought financial success to a tiny Indian tribe is drawing covetous eyes from a larger neighbor.
The Kalispel Tribe's off-reservation Northern Quest Casino has been so successful in tapping the lucrative Spokane, Wash., market that the Spokane Tribe of Indians is seeking rare federal approval to build a similar Vegas-style resort nearby.
The quiet but intense conflict is enmeshed in a larger federal study of Indian gambling that critics fear could lead to a boom of off-reservation casinos in cities around the country.
The Spokanes believe having two casinos will increase business for both tribes, just like clusters of casinos are a draw in Las Vegas and Reno, tribal chairman Greg Abrahamson said.
"We are not trying to fight with them," Abrahamson said. "We're trying to be good partners and make it a win-win for them."
The Kalispels disagree.
"It would be a competing business" and likely cut revenues, said Nick Pierre, director of the Kalispel Tribal Gaming Agency.
Approving an off-reservation casino strictly on the grounds of generating higher revenues for a tribe could lead to an explosion of Indian gambling sites near large cities, Pierre said.
"It would open the flood gates," Pierre said. "You could have casinos in downtown Seattle."
Indian gambling is big business, and many tribes want in on the action. In 2009, the 238 tribal casinos nationwide brought in $26.2 billion, according to the National Indian Gaming Association.
The Obama administration last summer launched a review of Bush-era rules that dramatically limited off-reservation gambling. The U.S. Department of Interior conducted six hearings around the country to take testimony on whether it should be easier for tribes to build off-reservation casinos. Only five such casinos, including the Northern Quest, have been approved in more than 20 years.
Other tribes that got off-reservation casinos were the Forest County Potawatomi of Wisconsin, the Keweenaw Bay of Michigan, the Fort Mojave of California and the Northern Cheyenne of Montana.
The Interior Department has been tightlipped about its review of the rules, and it's not clear when any decisions will be made.
The prospect of more off-reservation gambling provokes strong feelings and has plenty of opponents, including the private casino industry, labor unions and Senate Majority Leader Harry Reid, D-Nev.
But there is "no question that gaming has provided important economic opportunities for some tribes," Interior Secretary Ken Salazar wrote in a memo calling for the review.
Few tribes have benefited as much as the Kalispels, a band with 416 members and a reservation that is just 8 miles long and 1 mile wide. The tiny reservation sits mostly on a floodplain near Usk, 50 miles north of Spokane.
With few options for generating money, the Kalispels in the early 1990s bought land in the Spokane suburb of Airway Heights and launched a seven-year effort to get it designated as part of their reservation to allow gambling. The effort required the approval of both the federal government and former Washington Gov. Gary Locke, who is now the U.S. secretary of commerce.
Locke's successor, Democratic Gov. Chris Gregoire, is not prepared to say if she would approve the Spokane Tribe's request, spokeswoman Karina Shagren said.
"If Interior grants permission, the governor will certainly work in good faith with the tribe," Shagren said.
The lack of development opportunities on their remote reservation was the main reason the Kalispel got permission, Pierre said.
The Northern Quest Casino, near Spokane's airport, opened in 2000 and has been continually expanded since. It features a 250-room hotel, more than a dozen restaurants, a spa, sports bar and cigar bar and 46,000 square feet of gambling space with 2,000 slot machines and table games.
It is the Kalispel's only casino, but Pierre said its success has allowed the tribe to provide clean drinking water, medical and dental care, a wellness center, fire and ambulance service, higher education scholarships and jobs in various fields for every member who wants one. The casino employs about 2,000 people, but most of them are non-Indians.
"Our standard of living is way up," Pierre said. He declined to reveal how much money the casino generates.
By contrast, gambling has not been so good to the Spokane Tribe, which has 2,655 members and a much larger reservation about 30 miles northwest of Spokane. The Spokanes at one time operated five modest casinos on their reservation, but only two are left.
The opening of the Kalispel casino cut revenues at the Spokane Tribe's venues by 80 percent, Abrahamson said.
Their biggest remaining casino is in Chewelah, a town of 2,000 people in an impoverished area 40 miles north of Spokane. It has 400 slot machines in a glitz-deprived building that offers no hint of Vegas.
The revenue drop forced the Spokanes to reduce their social programs, aid to elders and youth and education programs, Abrahamson said. Yet gambling remains the tribe's second largest business, after timber, Abrahamson said.
"We want to go back into taking care of the health and welfare of our people," he said.
Unemployment among the Spokanes is around 50 percent, a number that would instantly drop if the proposed casino with at least 800 permanent jobs is allowed, he said. The tribe expects a decision from the Interior Department next year.
One of the Spokane's key arguments is that the Kalispel casino is within the ancestral lands of the Spokane Tribe, which lent its name to the region's largest city.
"The Spokane Tribe should be allowed the same playing field to achieve its self-sufficiency goals as a neighboring tribe was allowed within the aboriginal lands of the Spokane Tribe of Indians," Abrahamson said.
Pierre argued that many tribes can claim they had ancestral lands in the Spokane area, and all tribes lost those lands to whites.
State Sen. Margarita Prentice, a longtime member of the state Gambling Commission, thinks the Spokane's proposal should be denied, because the tribe has plenty of other ways to make money, including improving its existing casinos.
"It's not as if the Kalispels had any other options, and it's not as if the Spokane's don't have options," Prentice said.