THE RETURN OF legalized gambling—state lotteries and casinos, especially—has been prompted largely in response to floundering state and local economies. It is not surprising that the various Indian reservations in the United States became interested, too.

After all, reasoned many Indian officials, most reservations have been places of poverty and despair since they were established by the U.S. government. Unemployment is rampant, often as high as 75 percent. The rate of suicide is more than twice the national average, alcoholism seven times more prevalent than in the general population. The incidence of tuberculosis and the infant mortality rate matches those of some of the most abject Third World countries.

Why not"

Conditions worsened considerably in the 1980s because both the Reagan and Bush administrations cut programs that had benefited Indians. Budgets for Housing and Urban Development, the Community Services Administration...