Native Americans: Indian Gaming

Tribal government-sponsored gaming is a relatively new phenomenon, dating to the late 1970s when a number of Tribes established bingo operations as a means of raising revenues to fund Tribal government operations. At about the same time, a number of state governments were also exploring the potential for increasing state revenues through state-sponsored gaming.

By the mid-1980s, a number of states had authorized charitable gaming, and some were sponsoring state-operated lotteries. Although government-sponsored gaming was an issue of mutual interest, Tribal and state governments soon found themselves at odds over Indian gaming. The debate centered on the issue of whether Tribal governments possess the authority to conduct gaming independently of state regulation.

Although many lower courts affirmed the Tribal view in the early cases, the matter was not finally resolved until 1987 when the U.S. Supreme Court confirmed the authority of Tribal governments to establish gaming operations independent of state regulation provided that the state in question permits some form of gaming. California v. Cabazon Band of Mission Indians 480 U.S. 202 (1987). Congress took up the issue of Tribal gaming and conducted a series of hearings, ultimately culminating in the passage of the Indian Gaming Regulatory Act of 1988 (Act). Embodied in the Act was a compromise between state and Tribal interests. The states were offered a voice in determining the scope and extent of Tribal gaming by requiring Tribal-State compacts for Class III gaming, but Tribal regulatory authority over Class II gaming was preserved in full. The Act further provided for general regulatory oversight at the federal level and created the National Indian Gaming Commission as the responsible agency.

The Indian Gaming Regulatory Act, enacted in 1988 as Public Law 100-497 and now codified at 25 U.S.C. §2701, establishes the jurisdictional framework that presently governs Indian gaming. The Act establishes three classes of games with a different regulatory scheme for each. Class I gaming is defined as traditional Indian gaming and social gaming for minimal prizes. Regulatory authority over class I gaming is vested exclusively in tribal governments. Class II gaming is defined as the game of chance commonly known as bingo (whether or not electronic, computer, or other technological aids are used in connection therewith) 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 Commission, Tribal governments are responsible for regulating class II gaming with Commission oversight. The definition of class III gaming is extremely broad. It includes all forms of gaming that are neither class I nor II. Games commonly played at casinos, such as slot machines, black jack, craps, and roulette, would 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:

(1) 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;

(2) 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; and

(3) the Tribe must have adopted a Tribal gaming ordinance that has been approved by the Chairman of the Commission. The regulatory scheme for class III gaming is more complex than a casual reading of the statute might suggest.

Although Congress clearly intended regulatory issues to be addressed in Tribal State compacts, it left a number of key function in federal hands, including approval authority over compacts, management contracts, and Tribal gaming ordinances. Congress also vested the Commission with broad authority to issue regulations in furtherance of the purposes of the Act. Accordingly, the Commission plays a key role in the regulation of class II and III gaming. Senator John McCain (R-Arizona), chairman of the Senate Indian Affairs Committee, on which I sit, introduced a bill during the 109th Congress regarding Indian gaming. Generally, it amends IGRA in three principal areas, by: (1) explicitly granting NIGC authority to issue minimum internal control standards (MICS) regarding Class III, casino-like games; (2) expanding the types of contracts over which NIGC has approval authority; and (3) amending the statutory exceptions to the general prohibition against gaming on lands acquired after 1988. The legislation clarifies NIGC authority and approval over gaming-related contracts, which has sparked concern from most tribes who have contacted the office due to the sovereignty issue. It also provided a window until April 15, 2006 for applications under the two part determination.

Contact information for the National Indian Gaming Commission: