11.1 The Indian Gaming Regulatory Act of 1988

The Indian Gaming Regulatory Act of 1988 was a game-changer for tribal economies. It set up rules for Native American casinos, creating a framework for tribes to run gaming operations and generate much-needed revenue.

IGRA established three classes of gaming with different levels of oversight. It also created the National Indian Gaming Commission to regulate tribal gaming, balancing federal supervision with tribal self-governance in this booming industry.

Regulatory Framework of IGRA

Establishment of the Indian Gaming Regulatory Act

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• Indian Gaming Regulatory Act (IGRA) enacted by Congress in 1988 to provide a statutory basis for the operation and regulation of gaming by Indian tribes
• IGRA established the jurisdictional framework governing Indian gaming, mandating that tribes have the sole proprietary interest in and responsibility for the conduct of gaming activities
• Created three classes of gaming (Class I, II, and III) subject to different levels of tribal, state, and federal jurisdiction

National Indian Gaming Commission and Regulatory Oversight

• National Indian Gaming Commission (NIGC) established as an independent federal regulatory agency within the Department of the Interior to monitor and inspect tribal gaming operations
• NIGC responsible for approving tribal gaming ordinances, ensuring compliance with IGRA, and issuing regulations and guidelines
• Regulatory framework under IGRA includes background checks and licensing of key employees and primary management officials, as well as ongoing oversight and audits of gaming operations

Tribal Gaming Ordinances and Self-Regulation

• Under IGRA, tribes must adopt gaming ordinances that are approved by the NIGC Chair before conducting Class II or III gaming
• Gaming ordinances must include provisions for the use of gaming revenues, audits, contract requirements, and background checks
• IGRA encourages tribal self-regulation by requiring tribes to establish their own regulatory bodies and develop internal control systems to ensure the integrity of gaming operations

Classes of Indian Gaming

Class I Gaming: Traditional and Social Games

• Class I gaming includes traditional games played in connection with tribal ceremonies or celebrations (ceremonial dances, powwows)
• Class I gaming also encompasses social games played solely for prizes of minimal value
• Class I gaming is within the exclusive jurisdiction of Indian tribes and is not subject to IGRA regulations

Class II Gaming: Bingo and Non-Banking Card Games

• Class II gaming primarily includes bingo (including electronic, computer, or other technologic aids) and non-banking card games (poker)
• Non-banking card games must be explicitly authorized or not explicitly prohibited by state law and played according to state regulations regarding hours of operation and pot limits
• Tribes have the authority to regulate Class II gaming, subject to NIGC oversight and approval of gaming ordinances

Class III Gaming: Casino-Style Games and Tribal-State Compacts

• Class III gaming encompasses all forms of gaming that are not Class I or II, including slot machines, blackjack, craps, and other casino-style games
• Class III gaming activities are lawful on Indian lands only if authorized by a tribal ordinance, located in a state that permits such gaming, and conducted in conformance with a tribal-state compact
• Tribal-state compacts are negotiated agreements between a tribe and state government that establish the terms and conditions under which Class III gaming may be conducted (revenue sharing, licensing, game types)

Tribal Sovereignty and Economic Development

Tribal Sovereignty and Federal Indian Law

• Tribal sovereignty refers to the inherent authority of Indian tribes to govern themselves and their members
• Federal Indian law, developed through treaties, statutes, and court decisions, recognizes tribes as "domestic dependent nations" with inherent powers of self-government
• The U.S. Supreme Court's Cabazon decision in 1987 affirmed that Indian tribes have the authority to establish gaming operations on their reservations if not prohibited by federal law and in states where gaming is legal

Indian Gaming and Tribal Economic Development

• Indian gaming has become a significant source of revenue for many tribal governments, providing funds for essential services, infrastructure, and economic development projects (schools, healthcare facilities, roads)
• Gaming revenues have enabled tribes to diversify their economies and invest in other businesses, such as renewable energy, manufacturing, and tourism
• Revenue sharing agreements in tribal-state compacts often require tribes to share a portion of their gaming revenues with the state or local governments to offset the impacts of gaming operations (infrastructure costs, social services)