The dispute, which pits several dozen tribes against the state government, has reached crisis point in California. But it is replicated in many other parts of the United States, where gambling practices and the disposal of profits are upsetting the always delicate three-cornered relationship between Washington, the states, and the Native Americans.
In a highly unusual development, the California Indians, representing some 30 tribes in the state, were granted a meeting with the US administration's chief law officer, Janet Reno. Equally unusually, Ms Reno held the meeting in public, in the justice ministry, giving the Indians a nationwide forum for their grievance against the Republican governor of California, Pete Wilson.
At the session, six tribal chiefs presented their case. "What is this sovereignty thing you folks always talk about if it is not the right [for the reservation] to determine for itself its economy and its own way of life within its borders?" asked Mark Macarro of the Pechanga tribe.
"Indians have always been shortchanged," said Mary Ann Martin Andreas, chairwoman of the Morongo Indians. "There were virtually no jobs on the reservation before gaming; the county provided only welfare ... Now we are being called to account for the crime of capitalism and free enterprise." What the state government proposed, she said, was little short of "economic genocide".
The meeting heard a heart-rending plea from Maria Figueroa to Ms Reno for help to keep her job in the casino run by the San Miguel Mission Band of California Indians. This, she said, let her support her children and stay off state welfare.
The immediate cause of the dispute is a demand by Mr Wilson that tribes cease using video slot machines as a condition of a deal that would make their casinos legal. He has threatened to raid the reservations and seize the machines unless the tribes shut them down.
The tribes maintain that the governor has no right to set preconditions for talks which they see as government to government negotiations. They insist that slot machines are essential to the casinos' profitability and suspect California is being pressurised by the neighbouring state of Nevada, where the machines are legal and gambling is a major source of revenue.
Under federal legislation, passed in 1988, Indian reservations may run gambling operations, but only if they reach agreement on the terms with the state government. Each state also has the right to prevent Indians providing forms of gambling that are prohibited by its law. In California, video slot machines are illegal.
Indians in California were among the first to take advantage of the legislation. A decade later, these tribes, along with dozens of others across the US, have grown rich on the profits.
The California Indian chiefs in Washington yesterday said their casinos provided 32,000 jobs and had passed on $160m (pounds 100m) to the state and county governments in taxes and health and emergency service levies. The state has also saved more than $31m in welfare payments.
While the change in Indian fortunes has been hailed by Indians and non- Indians alike, it presents a big challenge to the authorities. When reservations were poor, unattractive places, gambling could remain a pariah activity, out of sight and out of mind. As profits grew and hundreds of outsiders flocked to the casinos, the ethical aspect could no longer be ignored; nor could the dollars which the reservations were shovelling in, without paying a cent in tax.
Now, there are 184 tribes running 281 legal casinos across the US. They produce more than $4.5bn in profits, some of which is remitted to state authorities. As in California, however, there are operations that have not been legalised and which the state governments may have the authority to close down.
The lawyer for the California tribes, Lanny Davies, said after yesterday's meeting that Ms Reno had given hope on two points.
She had accepted, in effect, that the Indians could negotiate without shutting down their machines first, and that they had the right to sue the state government if negotiations were refused.
Whether or not the governor of California agrees, the dispute looks set to continue - not, as some had feared, with violent sieges of the reservations, but peacefully in the courts.Reuse content