Native American gaming comprises casinos, bingo halls, and other gambling operations on Indian reservations or other tribal land 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 2011, there were 460 gambling operations run by 240 tribes, with a total annual revenue of $27 billion.
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 in the United States Supreme Court. 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. As Gaming Law Professor Kevin K. Washburn has explained, the stage was now set for Native gaming. 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 (Seminole Tribe v. Butterworth), 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. Here began the legal war of Native gaming with a win for the Seminoles.
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 Court addressed the potential gambling had for organized crime through the Organized Crime Control Act of 1970. 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
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. As Stuart Banner states, 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 (California v. Cabazon Band) and won, as did the Seminole Tribe in Florida. Although the tribe won in the lower courts, 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.
In 1988 Congress passed the Indian Gaming Regulatory Act (IGRA) (signed by President Ronald Reagan) 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.
After President Reagan signed the IGRA, Native gaming revenue skyrocketed from $100 million in 1988 to $16.7 billion in 2006. Following the IGRA, the National Indian Gaming Commission was created as a federal agency in 1988 to regulate high-stakes Native gaming.
The Commission consists of three members: a chairman who is appointed by the US President with 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, Jr., 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.
In 2006, Congress introduced legislation to protect their own casino interests from those tribes that are outside reservations. Further, the Bureau of Indian Affairs (BIA) 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.
Statistics provided by the National Indian Gaming Commission (NIGC), 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. Class I and Class II are traditional Native gaming such as bingo halls, poker halls, and lotteries, and requires no license. Class III gambling has high jackpots and high-stake games such as casinos, jai alai, and racetracks, and states feared that organized crime would infiltrate the Class III gaming on their reservations. 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 ($6.9 billion) and Washington State ($6.7 billion). The Native American gaming industry has been described as "recession-resistant", although tribes in many states (including Arizona, California, Connecticut and New Mexico) 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 (primarily California) 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 game.
The largest casino in the state of California is the Pechanga Resort and Casino in Temecula, with 3,000+ slot machines and approximately 200,000 sq ft (19,000 m2) of gaming space. Other notable gaming operations in California include the Morongo Casino, Resort & Spa, and the Chumash Casino.
Native gaming revenues in Oklahoma rose to $3.23 billion in 2010, representing 44 percent of all U.S. casinos. Oklahoma surpassed Connecticut as second in the United States for gaming revenue, according to Alan Meister, an economist with Nathan Associates Inc. Oklahoma has 113 tribal casinos, more than any other state in the U.S. A 2015 report on U.S. Gaming says that Oklahoma has the most gaming machines. WinStar World Casino in Thackerville, Oklahoma, is the third largest casino in North America with more than 500,000 square feet of gaming floor. The Indian Gaming Regulatory Act of 1988 mandates that net revenues of such gaming be directed to tribes for government, economic development and general welfare use; to charitable organizations and to help fund local governments. Approved by voters in 2004, Oklahoma’s State-Tribal Gaming Act created a tribal gaming compact allowing federally recognized American Indian tribes to operate, electronic bonanza-style bingo games, electronic amusement games, electronic instant bingo games and non house-banked card games. The current compact expires Jan. 1, 2020. The Oklahoma Indian Welfare Act allowed any recognized tribe in Oklahoma to be federally incorporated, have the right to self-determination and make their own bylaws.
The Foxwoods Resort Casino opened in 1992 in Ledyard, Connecticut. Operated by the Mashantucket Pequot Tribe and earning $1.5 billion, it was more profitable than any one casino in Las Vegas or Atlantic City. With 7,200 slot machines and 380 table games, making the 314,000-square-foot (29,200 m2) Foxwoods Resort Casino is the largest casino in the USA and second largest in the world after Venetian Macao. Today, the property spans 1.5 miles from end to end, with 6 casinos, four hotels, more than 30 restaurants, two theaters, two spas, and more than one hundred retailers. The agreement between the Mashantucket Pequot Tribal Nation and the State of Connecticut promises the state $80 million or 25% of their annual slot revenue. Since Foxwoods opened in 1992, the state of Connecticut has received more than $4 billion in slot revenue from Foxwoods alone.
The Mohegan Sun Resort & Casino is also located in Connecticut, and is owned and operated by the Mohegan Tribe. The Mohegan Tribe approached the Mashantucket Pequots in the early 1990s for permission to pursue gaming. Although doing so would relinquish their gaming monopoly in Connecticut, the Mashantuckets granted the Mohegans their request, who then opened Mohegan Sun in 1996. This enterprise is 580,000 square feet (54,000 m2) and consists of 6,500 slot machines and 180 table games. It is the second largest casino in the United States, located 7 miles away from Foxwoods in Uncasville, Connecticut. Since opening in 1996, the state of Connecticut has received more than $3 billion in slot revenue from Mohegan Sun alone.
The success of both casinos is due in no small part to their location roughly halfway between New York City and Boston.
The economic recession that began in 2007 took a heavy toll of receipts, and by 2012 both Foxwoods in Connecticut and its nearby rival the Mohegan Sun were deeply in debt. The New York Times said "Foxwoods is fighting for its life," with debts of $2.3 billion. In August 2012, the tribe owning the Foxwoods Casino restructured over a billion dollars in debt in an attempt to remain profitable.
The Coeur d’Alene Casino is located in Idaho, US. Founded in 1993, the establishment consists the Circling Raven Golf Club, two luxury hotels, 100,000 square feet of casino space, and various restaurants. The Coeur d’Alene Casino currently employs an average of 1000 local residents, making it one of the largest employers in the region. A part of the casino’s profits are invested back to the Coeur d'Alene people in education and various investment projects.
In March 1994 the Mohawk people created a joint venture with Alpha Hospitality to develop and operate a gaming facility on tribal lands. In January 1996 they entered into a memorandum with Robert A. Berman's Catskill Development, L.L.C. regarding the development and management of a casino adjacent to the Monticello Raceway. The project received approval from the National Indian Gaming Commission.
In 1999, however, the Mohawk tribe signed an agreement to build the casino with Park Place Entertainment (now Caesars Entertainment) instead. The Akwesasne Mohawk Casino (AMC) was inaugurated that same year in Hogansburg, New York. The facility comprises 140,000 square feet of casino floor space that includes over 1,800 slot machines and 30 table games, as well as a luxury hotel, spas, restaurants, and a number of entertainment venues. The casino is managed by the Mohawk Nation.
The state of Indiana's first tribal casino was opened on the 16th of January 2017. The 175,000-square-foot Four Winds Casino is located in South Bend and is operated by the Pokagon Band of Potawatomi Indians.
Native American gaming has, in some instances, changed the face of tribal economies, but it has also proven to be very ineffective in other situations. Although tribal victories over the governmental and cultural oppression in the 1950s yielded a dynamic transformation, economic success fell short in comparison. Unemployment was down and personal income had increased, but only a handful of tribes had made economic changes. Their strides were spotty and fluctuated greatly from each Native reservation. This was happening because, for most tribes, their lands were not economically productive, infrastructure was poor, and they were far away from prospering markets of large populations. In order to address the issue of poverty, Native tribes were required to fuel some type of economic development. Natives sold some of their tribal land to prospecting non-Natives in order to stimulate economic growth, but tribal gaming has proved to be the single largest amount of income in the Native community. However, the United States government intervened in tribal affairs throughout the rise of Native gaming.
Many tribal governments have seen substantial improvements in their ability to provide public services to their members, such as building schools, improving infrastructure, and shoring up the loss of native traditions. Tribal gaming operations have not been without controversy, however. A small number of tribes have been able to distribute large per-capita payments, generating considerable public attention. Additionally, the national expansion of Native Gaming has led to a practice critics call reservation shopping. This term describes tribes that, with the backing of casino investors, attempt to locate a casino off their reservation, usually near a large urban center. However, although authorized by the Indian Gaming Regulatory Act, only three "off-reservation" casinos have been built to date.
In June 2004, in an effort to identify and direct resources to Native gaming matters, the FBI and NIGC created the Indian Gaming Working Group (IGWG). The IGWG's purpose is to identify resources to address the most pressing criminal violations in the area of Native gaming. This group consists of representatives from a variety of FBI subprograms (i.e. Economic Crimes Unit, Money Laundering Unit, LCN/Organized Crime Unit, Asian Organized Crime Unit, Public Corruption/Government Fraud Unit, Cryptographic Racketeering Analysis Unit, and Indian Country Special Jurisdiction Unit) and other federal agencies, which include Department of Interior Office of Inspector General (DOI-OIG), NIGC, Internal Revenue Service Tribal Government Section (IRS-TGS), Department of Treasure Financial Crimes Enforcement Network (FINCEN), Department of Justice (DOJ), and Bureau of Indian Affairs Office of Law Enforcement Services (BIA-OLES). The IGWG meets monthly to review Native gaming cases deemed to have a significant impact on the Native gaming industry. As a result of these meetings, several investigations have been initiated and the IGWG, through its member agencies, has provided financial resources, travel funds, liaison assistance, personnel resources, coordination assistance and consultation.
The IGWG works in the following manner:
In order to properly detect the presence of illegal activity in the Native gaming industry law enforcement offices with jurisdiction in Native gaming violations should: