Good news for the nation's casino-developing Indian tribes. President Obama has thrown out a directive from former President George W. Bush that crippled off-reservation casino development.

Not so-good news:  Financing for new casino construction remains difficult to obtain, at the same time that unemployment and poverty figures among the tribes are soaring.

The Bush-era directive stated new off-reservation development would be permitted only if the project was within commuting distance.

Now the Bureau of Indian Affairs said it will return to a policy that considers off-reservation casinos on a case-by-case basis.

In a prepared statement, Larry Echo Hawk, assistant secretary for Indian Affairs, said the Bush administration's 2008 directive "was unnecessary and was issued without the benefit of tribal consultation.

"We will proceed to process off-reservation gaming applications in a transparent manner, consistent with existing law."

The policy shift is poised to revive numerous plans for off-reservation casino projects, from the Columbia River Gorge in Oregon to the Catskills in New York.

The "commutability rule" has been the source of great debate in the gambling world, The Wall Street Journal reports.

Existing casinos, as well as some tribes that already have gotten into the gambling business, pressured the Obama administration to keep the rule, fearing off-reservation gambling would increase competition at a time when their revenues were being hurt by the economic downturn.

But off-reservation supporters promoted such development as a tax-free means to stimulate the economy.

New York Sen. Charles Schumer, who lobbied hard to repeal the rule to spark casino development in the economically hard-hit Catskill Mountains, called the Bureau's move a "ground-breaking action" that removes "what was an insurmountable hurdle on the path to a Catskills casino."

The tribes interested in developing casinos in the Catskills include the St. Regis Mohawks, who at one point were looking at a site attached to a racetrack in Monticello, N.Y., and 350 miles away from its reservation.

 Also, the Stockbridge-Munsee tribe, based in Wisconsin, has sought to build a casino in the Catskills.

The Monticello site considered by the St. Regis Mohawks is owned by Empire Resorts Inc.

There is also opposition to the Administration's new directive.

"This is not fair to existing gaming facilities that have invested billions of dollars in New York," said New York Gaming Association President James Featherstonhaugh.

He noted that existing gambling operations in New York contributed more than $520 million last year to state education budgets. He said that is expected to grow to $850 million with the opening later this year of New York City's first casino at Aqueduct racetrack.

The Wall Street Journal reports that, to date, 22 Indian casinos operate on non-reservation land.

About 300 casinos have been built since a U.S. Supreme Court ruling in 1987 significantly loosened state restrictions on Indian gambling. A year later, Congress passed legislation that tribes could build casinos off-reservation that were in the best interest of the tribe and not detrimental to the local community.

But Indian tribes wanting to build off-reservation could still find it challenging to pass muster under the Indian Gaming Regulatory Act and the Interior Department's existing stringent guidelines.

Under these, tribes must satisfy three independent and distinct requirements in order to operate an off-reservation gambling site, including a rule that tribes must have land acquired in trust by the department for the benefit of the tribe.

The gambling industry is slowly recovering from the downturn. The American Gaming Association reports total consumer spending on casinos rose nearly 1% to $34.6 billion in 2010, following two consecutive years of revenue declines.
________________________________________