Indian Gaming Laws
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Many states have small casinos associated with a Native American tribe. This often leads one to wonder why casinos are legal when associated with an Indian Tribe, but not under other circumstances. Which laws apply to these Indian casinos, as they are often called, and how are they regulated?
Native American tribes are unique in American law. They are considered domestic sovereign nations. That means that while still subject to many federal and state laws, others do not apply, particularly at the tribal level. As a result, Native Americans are often able to take advantage of this policy to build gambling establishments on their reservation lands, even though such gaming would otherwise be illegal in that jurisdiction.
However, Indian casinos are not without regulation. Tribal gaming is regulated by the respective tribal governments of the land upon which the casino is built, federal statutes, the Interior Department, the National Indian Gaming Commission, and, to some extent, by the states under the terms of negotiated tribal-state gaming compacts. Tribal gaming is also regulated by other federal agencies that regulate all casinos (and Americans in general), like the U.S. Department of Justice, the IRS and the FBI.
To be a legal Indian Casino, subject to all of the carve-outs afforded these institutions, the Indian Gaming Regulatory Act requires that tribal gaming net revenues be used in five specific areas: (1) to fund tribal government operations or programs, (2) to provide for the general welfare of the tribe and its members, (3) to promote tribal economic development, (4) to donate to charitable organizations, or (5) to help fund operations of local government agencies providing services to tribes. Most casinos devote their revenues to tribal government services, economic and community development, charitable donations and contributions to local governments.
One of the primary sources of regulation for Indian Gaming is the Indian Gaming Regulatory Act (IGRA). The IGRA created an economic justification for Indian gaming, citing the financial contribution such organizations could provide to the economic development and self-sufficiency of tribes. The IGRA also ensures that tribal governments are the sole owners and beneficiaries of reservation gaming programs, provides federal regulatory authority and gaming standards, and establishes the National Indian Gaming Commission to assure the integrity of tribal gaming.
The IGRA established three separate classifications of Indian gaming. The first, social gaming, includes traditional Indian games played as part of tribal ceremonies and celebrations. The individual tribes have exclusive authority over these types of games. The second type is the ubiquitous gambling favorite: Bingo. Bingo, pull-tabs, and similar games, that are not expressly prohibited by the laws of the state in which the activity is taking place are allowed. But, so called “banking” card games, such as blackjack, and slot machines of any kind are excluded from this class of gaming. Tribes have authority to regulate this class of gaming under the jurisdiction of the National Indian Gaming Commission, though these self-imposed regulations must be approved by the Commission. Finally, the third class of gaming includes all other forms of gaming that are not included under Class I or Class II. This includes blackjack and slot machines. Class III games are legal on tribal lands only if the games are authorized by the tribe; the games are located in a state that allows any kind of gaming for any purpose by any person, organization or entity; and the games comply with the requirements of a tribal-state compact. Class III gaming compacts negotiated pursuant to the IGRA include strict provisions related to application of criminal and civil laws regarding licensing and regulation of gaming, standards for the operation of games, and financial assessments (i.e., taxes and regulatory fees) to defray the costs of background investigations or other expenses associated with enforcement of the tribal-state compact.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.