Native American gaming
Native American gaming comprises casinos, bingo halls, slots halls and other gambling operations on Indian reservations or other tribal lands in the United States. Because these areas have tribal sovereignty, states have limited ability to forbid gambling there, as codified by the Indian Gaming Regulatory Act of 1988. As of 2024, there were 532 gambling operations run by 243 tribes, with a total annual revenue of $43.9 billion.
History
In the early 1970s, Russell and Helen Bryan, a married Chippewa couple living in a mobile home on Indian lands in northern Minnesota, received a property tax bill from the local county, Itasca County. The Bryans had never received a property tax bill from the county before. Unwilling to pay it, they took the tax notice to local legal aid attorneys at Leech Lake Legal Services, who brought suit to challenge the tax in the state courts. The Bryans lost their case in the state district court, and they lost again on appeal in a unanimous decision by the Minnesota Supreme Court. They then sought review at the Supreme Court of the United States. The Supreme Court granted review, and in a sweeping and unanimous decision authored by Justice Brennan, the Supreme Court held not only that states do not have authority to tax Natives on their reservations, but that they also lack the authority to regulate Native activities on their reservations. Within a few years, enterprising Natives and tribes began to operate Indian bingo operations in numerous different locations around the United States.Under the leadership of Howard Tommie, the Seminole Tribe of Florida built a large high-stakes bingo building on their reservation near Fort Lauderdale, Florida. The tribe planned for the bingo hall to be open six days a week, contrary to Florida state law which only allows two days a week for bingo halls to be open, as well as going over the maximum limit of $100 jackpots. The law was enacted from the charity bingo limits set by Catholic Churches. The sheriff of Broward County, where the Native reservation lies, made arrests the minute the bingo hall opened, and the tribe sued the county, stating that Native tribes have sovereignty rights that are protected by the federal government from interference by state government. A District Court ruled in favor of the Natives, citing Chief Justice John Marshall in Worcester v. Georgia.
Controversy arose when Natives began putting private casinos, bingo rooms, and lotteries on reservation lands and began setting gaming prizes which were above the maximum legal limit of the state. The Natives argued for sovereignty over their reservations to make them immune from state laws such as Public Law 280, which granted states to have criminal jurisdiction over Native reservations. States were afraid that Natives would have a significant competitive advantage over other gambling establishments in the state which were regulated, which would thus generate a vast amount of income for tribes.
In the late 1970s and continuing into the next decade, the delicate question concerning the legality of tribal gaming and immunity from state law hovered over the Supreme Court. The Organized Crime Control Act of 1970 made it illegal to conduct gaming on tribal lands if said gaming would violate state laws, although the federal government did not take steps to enforce this statute. A report by the Department of Justice presented to the Senate Select Committee on Indian Affairs on March 18, 1992, concluded that through several years of FBI investigation, organized crime had failed to infiltrate Native gaming and that there was no link between criminal activity in Native gaming and organized crime.
A Supreme Court ruling issued on July 9, 2020, which expanded tribal jurisdiction for the Muscogee Nation in Oklahoma also opened the possibility for Native Americans to have more power to regulate casino gambling.
Cabazon Band, 1980
In the early 1960s, the Cabazon Band of Mission Indians, near Indio, California, were extremely poor and did not have much land because of neglected treaties in the 1850s by state senators. Historian Stuart Banner stated that the Cabazon Band and the neighboring Morongo Reservation had "some HUD buildings and a few trailers, but that was about it. There was nothing really there. The people simply didn't have a lot." The Cabazon Band turned to casino operations, opening bingo and poker halls in 1980. Shortly thereafter, the Indio police and the Riverside County Sheriff shut down the gambling halls and arrested numerous Natives while seizing any cash and merchandise held in the tribe's possession. The Cabazon Band sued in federal court and won, as did the Seminole Tribe in Florida.The Supreme Court reviewed the case in 1986 to reach a decision over whether Native reservations are controlled by state law. The Court again ruled that Native gaming was to be regulated exclusively by Congress and the federal government, not state government. With tribal sovereignty upheld, the benefits of gaming became available to many tribes.
Indian Gaming Regulatory Act
In 1988, Congress passed the Indian Gaming Regulatory Act which kept tribal sovereignty to create casino-like halls, but the states and Natives must be in Tribal-State compacts and the federal government has the power to regulate the gaming. These compacts have been used by state officials to confiscate Native casino revenue which serves as a "special" tax on Native reservations. Essentially, the tribes still have "exclusive right" to all classes of gaming except when states do not accept that class or it clashes with federal law.Class III Native gaming became a large issue for the states and federal government, because of these court cases, as Congress debated over a bill for Native gaming called the Indian Gaming Regulatory Act.
Currently, all attempts to challenge the Indian Gaming Regulatory Act on constitutional grounds have failed.
In 1988, when President Reagan signed the IGRA, Native gaming revenue stood at $100 million. By 1995, revenues had risen to $5.4 billion, and by 2004 they reached $19.4 billion. The National Indian Gaming Commission was created in 1988 following the IGRA's enactment to regulate Native gaming.
The Commission consists of three members: a chairman who is appointed by the US president with the consent of the Senate, and two associate members appointed by the Secretary of the Interior. Each member serves a three-year term and must pass a detailed background check by the US Attorney General.
The NIGC withholds certain powers over Class II and Class III gaming. These include budget approval, civil fines, fees, subpoenas, and permanent orders. The NIGC monitors Class II gaming on Native lands on a continuing basis through inspection, investigation, access to records, and contracts. As for Class III gaming, all contracts must be approved by the chairman of the NIGC. 200 of the 562 federally recognized tribes created Class III gaming of large casinos and high jackpots.
This rise of gaming not only brought great revenue but also corruption. In January 2006, a court case involving lobbyists convicted of felonies such as conspiracy, fraud, and tax evasion. This was known as the Jack Abramoff Indian lobbying scandal. These lobbyists, Jack Abramoff, Ralph Reed, Grover Norquist, and Michael Scanlon, bribed members of Congress when lobbying for Native casinos, then overcharged their Native clients; this generated around $90 million in fees from the Natives.
2006 legislation
In 2006, Congress introduced legislation to protect their own casino interests from those tribes that are outside reservations. Further, the Bureau of Indian Affairs has faced increasing pressure to tighten regulatory policy and oversight of casino approvals. In particular, the BIA has been instructed by Congress to implement new procedures after two decades of IGRA's existence. These procedures would allow local communities to have more influence in the siting of casinos in their community and would make the process of casino approval more transparent. To many tribes, however, the proposed regulations will further encroach on tribal sovereignty.Regulatory schemes
Statistics provided by the National Indian Gaming Commission, indicate that there are 460 Native gaming establishments in the US. These casinos are operated by 240 federally recognized tribes and offer Class I, Class II and Class III gaming. Gaming is divided into 3 classes with a different regulatory scheme for each:Class I
Class I gaming is defined as traditional Indian gaming, which may be part of tribal ceremonies and celebrations, and social gaming for minimal prizes. Regulatory authority over class I gaming is vested exclusively in tribal governments and is not subject to IGRA's requirements.Class II
Class II gaming is defined as the game of chance commonly known as bingo and, if played in the same location as the bingo, pull tabs, punch board, tip jars, instant bingo, and other games similar to bingo. Class II gaming also includes non-banked card games, that is, games that are played exclusively against other players rather than against the house or a player acting as a bank. The Act specifically excludes slot machines or electronic facsimiles of any game of chance from the definition of class II games.Tribes retain their authority to conduct, license, and regulate class II gaming so long as the state in which the Tribe is located permits such gaming for any purpose, and the Tribal government adopts a gaming ordinance approved by the National Indian Gaming Commission. Tribal governments are responsible for regulating class II gaming with Commission oversight. Only Hawaii and Utah continue to prohibit all types of gaming.
Class III
The definition of class III gaming is broad. It includes all forms of gaming that are neither class I nor II. Games commonly played at casinos, such as slot machines, blackjack, craps, and roulette, clearly fall in the class III category, as well as wagering games and electronic facsimiles of any game of chance. Generally, class III is often referred to as casino-style gaming. As a compromise, the Act restricts Tribal authority to conduct class III gaming.Before a Tribe may lawfully conduct class III gaming, the following conditions must be met:
- The Particular form of class III gaming that the Tribe wants to conduct must be permitted in the state in which the tribe is located.
- The Tribe and the state must have negotiated a compact that has been approved by the Secretary of the Interior, or the Secretary must have approved regulatory procedures.
- The Tribe must have adopted a Tribal gaming ordinance that has been approved by the chairman of the commission.
The revenue generated in these establishments was close to $27.1 billion in 2011 up from $12.8 billion in 2001. The regions with largest revenues in 2011 were Sacramento and Washington State. The Native American gaming industry has been described as "recession-resistant", although tribes in many states saw revenues fall at a similar rate to commercial casinos during the Great Recession of 2007–2009.
Tribal casinos in the eastern US generated roughly $3.8 billion in FY02. Those in the Central US recorded gross revenues of approximately $5.9 billion, while those in the Western US generated nearly $4.8 billion. Most of the revenues generated in the Native gaming are from casinos located in or near large metropolitan areas. Currently, 12% of Native gaming establishments generate 65% of Native gaming revenues. Native gaming operations located in the populous areas of the West Coast represent the fastest growing sector of the Native gaming industry. As suggested by the above figures, the vast majority of tribal casinos are much less financially successful, particularly those in the Midwest and Great Plains. Many tribes see this limited financial success as being tempered by decreases in reservation unemployment and poverty rates, although socioeconomic deficits remain.
As of 2008 there are 562 federally recognized tribes in the United States, many of which have chosen not to enter the gambling industry.