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US RESERVATION GAMING by Sharon Harris
Commercial enterprises, plus the introduction of racinos in several states that may compete
with tribal casinos, have impacted their profits.
For centuries, millions of Native Americans have lived their lives on reservations in the United Approximately 228 tribes use gaming revenues to pay for social services such as healthcare,
States. Historically, the stormy and often controversial relationship between the federal govern- housing and education. Some state tribal associations have developed specific funds to share
ment in Washington D.C. and the hundreds of tribes has been a battle for sovereignty and tribal revenues with non-gaming tribes. Almost 34 percent of tribes distribute money directly to
rights. From coast to coast and on the American frontier, violence and the ultimate segregation bonafide tribal members, regardless of their residence either on reservation lands or elsewhere.
of tribes on reservation lands has blemished America’s history of freedom and liberty. Indian gaming was meant to create and sustain self-sufficient tribal governments. After
Favorable tribal legislation during the 20th century often failed to be followed. However, the almost 20 years, most goals have been achieved. However, some venues, including
1988 passage of the Indian Gaming Regulatory Act (IGRA) forever changed tribal operations. Connecticut’s Foxwoods and Mohegan Sun or southern California’s venues, have profited by
One lawsuit – California v. Cabazon – ended up in the United States Supreme Court in 1987. The hundreds of millions. Others have more marginally benefited. Of those that have lost money,
decision ruled that states had no regulatory control over gaming conducted on Indian lands. operating a casino remains a vehicle to encourage work and boost the morale of the tribe.
Following one year of negotiations, IGRA proved that it not only permitted gaming, but As sovereign governments, tribes are exempt from corporate income taxes on tribal rev-
also provided individual states specific regulatory control. IGRA stated that tribes could enue or property tax on reservation land. Tribal members who live and work on reservations
conduct a similar gaming operation to any other type of gaming permitted in that state. are also exempt from state income, property taxes or sales taxes on purchases made on
In order to do that, tribes and states had to negotiate a compact agreement that states Indian lands. Secondary economic activity, after initial spending at gaming facilities is
the conditions, regulations and any financial arrangements between the two entities for spent and redistributed, generate tax revenues.
operating Class III, or Las Vegas-style casinos.
Indian gaming in America is categorized in three ways - Class I, Class II and Class III.
IGRA regulations only affect Class III gaming. Not long after, the National Indian Gaming
Association (NIGA) was established in Washington, D.C. to serve and protect the interests of
member tribes conducting gaming.
Class I gaming, regulated solely by the individual tribes, involves social, traditional or cul-
tural forms of gaming for minimal prizes or tribal ceremonies. Class II includes bingo and
other non-banking card games. It may be electronic, and is regulated by the National
Indian Gaming Commission (NIGC) and one of almost 200 Tribal Gaming Commissions
(TGC) operating throughout the US. A Class III category describes other types of gaming, as
negotiated by state compact.
To address state governments who do not negotiate “in good faith”, the tribes have legal
remedies in federal court. If the state ignores a mediator’s recommendations, the United
States Secretary of the Interior will step in to establish the parameters.
In the 19 years since legalization, Indian gaming has exploded. The federal government
has recognized 562 tribes, but less than half conduct gaming. Some tribes reject gaming
because of religious and cultural prohibitions, geographic limitations (including mountain-
ous or remote locations), insufficient labor or other issues.
However, external competition has curtailed the explosive growth of Indian gaming.
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