It's been a couple of decades since I worked with the Indian Health Service but from my experiences there in the 80s, it was as bad as Africa (only with lots of alcoholism). From what I'm hearing from counterparts in public health is that the casinos have significantly improved conditions since the 80s- financial and otherwise- for the tribes. One of the problems that they're having to deal with is that they've never had to run businesses and manage money, so they've had a learning curve of how to manage too much money.
My experience on the subject goes back a ways also. I used to do a lot of work for Native Orgs that were studying exactly that, the effect of gaming on Tribal communities. It was mostly funded BY Casino Tribes in California. What we basically found was (wait for it) that the effect was not uniform, and that it depends on who you're talking about, where they are, and how any profits are distributed. There are more tribes by far without casinos than there are with them, and although all of us tend to think of Native Americans as kind of a monolithic thing, those Morongos aren't interested in sharing with the Navajos. Plus not all Casinos are the big profitable ones, and a bunch of them did fold because of bad management or lack of customers.
It also depends on what kind of casino the Tribe built, were they the sole shareholder, or did they take investment from some outside entity for a share of the profit - in which case they may own the casino, but they don't run it and they don't unilaterally control the profit. Some Casinos are managed by management firms that are hirelings and not Native.
As far as effect on things like healthcare - first of all, if your Tribe doesn't have a profitable casino, things are no different for you than what you found in the 80's. That said, effects on social expenditures depended on how casino profits were handled. There are two basic models, the state (Tribe) manages the revenue and centrally decides on spending priorities, and the Per Capita model, under which all profits are divided between each Tribal member.
The PerCap tribes did not see a general improvement in Tribal social services - and you have to understand that we are
not talking about large numbers of people, but then they didn't really need that since they had the cash to outright purchase whatever they wanted, which wasn't always healthcare and schools. This model seemed to be corrosive on the Tribe, instigating feuds about who got on the rolls and who didn't, there were no uniform Tribal spending priorities, plus they tended to throw up stringent membership requirements for future membership so as not to dilute each individual's PerCap dividend. The highest PerCap I ever saw was ~$80,000.00, per month, per person.
The State model tribes did much better and are probably the kinds that your friend is talking about. They did invest in education and healthcare and sent all their kids off to law school, they also hired lawyers and enacted laws like a ban on Tribal Members gambling in their own casinos, and requiring that all employees be Tribal members - with some exceptions based on skilled labor. The individual Tribal members did not get a stipend or a dividend. They did get schools and hospitals. However, unless something has changed pretty radically, the effect of casino money on Native Americans across the board has been largely incidental. Hospitals the rich ones pay for, are not open to the poor ones from elsewhere.
There are variation on these, but it just gets even more arcane.
The most interesting reaction to Casino money I ever saw though was what happened when White neighbors began seeing large amounts of
political donations coming from the Casino Tribes. That got visceral and ugly.
In addition to the treaty obligations for things like education and healthcare, there's a big budget allocated under BIA for land and water management. It's incredibly complicated but apparently there's a large amount land in trust that the Feds manage but that's a different budget from the budget subsidies that we were originally discussing before this latest Benvolio derail.
The Fed is trustee to all lands owned by the tribes (except in Texas), and their
revenues, there was a huge lawsuit about that just recently, since it came out that $19 billion dollars owed to Tribes seemed to be missing. Imagine that.
Correct me if I'm wrong since you know more about Indian financing than I- but the assumption that Indians are paupers supported by the Feds is a stereotype and because of casinos and other tribal investments, they're not as socially subsidized as other populations.
It runs the gamut, if you have a PerCap chances are you can buy both of us before lunch and aren't going to bother with getting and keeping any form of welfare. Then there are Reservations that are so poor and destitute it's literally the third world.
With regards to social services, the biggest misconception is that White people generally think that providing schools and healthcare to Natives IS welfare, but it's not, it's the agreement the Fed made for their land. We agreed to provide these things
in perpetuity for the land we parked our big lily behinds upon. If a rich tribe wants to take Federal money, they are entitled to do so, if they don't, that is probably the biggest contribution they make to all the others.
There was some talk of "Pan-Indian" identity and causes, awhile ago, but I have no idea how popular that was or if it ever went anywhere.