American Tribal Gaming

The 1934 Indian Reorganization Act of June 18, 1934 (IRA) established policies to reduce federal involvement in Indian affairs and to promote self-government and economic independence for all Native Americans, a large part of which includes the restoration, conservation and development of Indian lands. The right to self-government and land possession set the foundation for Indian tribes to capitalize on the opportunity to develop gaming enterprises within their boundaries.

However, it was not until the 1980s, following several court rulings clarifying tribal sovereignty, that bingo parlors and card clubs began to emerge. With the growth of a gaming industry, and under the IRA, tribes could apply for land to be taken into trust, and therefore expand their territories. For tribes seeking to open casinos, the increase in territory meant an increased opportunity for economic development.

The Indian Gaming Regulatory Act (IGRA) was signed into law on 17 October 1988, in response to the rapid growth in gaming interests. It established the jurisdictional framework, including the National Indian Gaming Commission (NIGC), which presently governs Indian gaming, which ranges from bingo parlors to casinos across 31 states.

In 2009, the U.S. Supreme Court decided that the term "now under federal jurisdiction" in regard to land taken into trust applied only to tribes that were federally recognized up until 1934, when the IRA was enacted. Therefore, the government is prohibited from taking land into trust for any tribe that gained federal recognition after 1934.

The decision was delivered in the case of Donald L. Carcieri, Governor of Rhode Island v. Ken L. Salazar, Secretary of the Interior, et al. The Narragansett tribe of Rhode Island purchased a 31-acre parcel of land in 1991 and petitioned to have it taken into trust. The Bureau of Indian Affairs (BIA) approved the petition in 1998, and the state appealed. Following a series of rulings in favor of the federal government, the state appealed to the U.S. Supreme Court, which made its decision on 27 February 2009.

In February 2007, the DOI proposed a new rule to restrict off-reservation development of casinos. By January 2008, the Assistant Secretary - Indian Affairs Carl Artman published a memorandum that stipulated casinos should be located within a "commutable distance" (40 miles) of a reservation, and following its release, a number of land-to-trust applications were instantly rejected.

In June 2011 under a new administration, Assistant Secretary - Indian Affairs Larry Echo Hawk rescinded the 2008 guidelines regarding the off-reservation development of casinos. Deeming the guidelines unnecessary and established without tribal consultation, Echo Hawk affirmed that adherence to existing laws, with transparency, is sufficient in processing off-reservation gaming applications.

The IGRA 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. 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) and, if played in the same location as the bingo, pull-tabs, punchboards, tip jars, instant bingo and other games similar to bingo. Class II gaming also includes non-banked card games. Class III gaming is extremely broad and includes all forms of gaming that are neither Class I nor Class II. Games commonly played at casinos, such as slot machines, blackjack, craps and roulette, are in the Class III category.

Following an attempt by an Alaskan tribe to legitimize one-touch bingo machines as Class II machines, NIGC chairman Phil Hogen announced in April 2008 his intent to reclassify electronic bingo. One-touch bingo machines only require players to press a button once to wager and play. The reclassification would mean the one-touch machines would be regulated like Las Vegas-style slot machines, requiring tribes to form a compact with the State.

On 5 June 2010, Hogen denied allowance of one-touch bingo machines for Class II gaming tribes, and determined those machines to be Class III electronic games of chance.

In July 2013, the NIGC reversed its position on one-touch bingo machines and classified them as Class II machines.

Since the passage of IGRA in 1988, tribal gaming has grown from a $121 million segment of the U.S. gaming industry, consisting of small bingo halls and gaming facilities, to a more than $32 billion segment in 28 states in 2017.