Indian Gaming Regulatory Act

The Indian Gaming Regulatory Act (Pub.L. 100-497, 25 U.S.C. § 2701 et seq.) is a 1988 United States federal law that establishes the jurisdictional framework that governs Indian gaming. There was no federal gaming structure before this act. The stated purposes of the act include providing a legislative basis for the operation/regulation of Indian gaming, protecting gaming as a means of generating revenue for the tribes, encouraging economic development of these tribes, and protecting the enterprises from negative influences (such as organized crime). The law established the National Indian Gaming Commission and gave it a regulatory mandate. The law also delegated new authority to the U.S. Department of the Interior and created new federal offenses, giving the U.S. Department of Justice authority to prosecute them.

The law has been the source of extensive controversy and litigation. One of the key questions is whether the National Indian Gaming Commission and Department of Interior can be effective in regulating tribal economic decisions related to Indian gaming. Senator John McCain is in favor of greater regulation, while a prominent professor in the field is skeptical that such regulation is effective. Many of the controversies have produced litigation, some of it reaching the U.S. Supreme Court.

History

In 1976, in a case called Bryan v. Itasca County, the Supreme Court ruled in sowed the legal seeds that would eventually give rise to the Indian gaming industry. In an opinion written by Justice William Brennan, the Supreme Court in Bryan highlighted tribal independence from state regulatory authority. Since regulatory authority is the primary legal mechanism for regulating some forms of gambling, this case would prove relevant to the impending controversy of Indian gaming.

Gambling is a part of many traditional Indian cultures (as well as the larger US society.) Tribal games include dice and shell activities, archery competitions, races, and so on. The use of gaming to generate profit did not begin until the late 1970s and early 1980s within Indian communities. Several tribes, especially in California and Florida, opened bingo places as a way to earn revenue. Their actions were related to search for new sources of revenue, given the emphasis which the Reagan administration placed on economic self-sufficiency for the tribes.

While bingo was legal in California and Florida, the states had stringent regulations. Operating on the history of tribal sovereignty, some tribes did not comply with these laws. High stakes Indian bingo operations soon arose in California, Florida, New York, and Wisconsin. The industry grew rapidly. State governments began contending that revenues from their own gaming operations dropped as Native American operations increased the potential stakes._{Sentence dropped. Please edit.}

Discussions about codifying Indian gaming began in 1983. In 1987, the U.S. Supreme Court ruled in California v Cabazon Band of Mission Indians that as sovereign political entities, tribes could operate facilities free of state regulation. The court also recognized that gaming could be used to encourage tribal self-sufficiency and economic development. This court case can be seen as a victory for the tribes. As the growth in Indian gaming continued in the 1980s (grossing over $110 million in 1988), though, tensions increased.

States began lobbying the federal government to allow state government to regulate Indian gaming. States argued that their regulation was needed to stop infiltration by organized crime. Furthermore, states wanted to be able to tax revenues gained by Indian gaming. Tribes fought the states in an effort both to maintain tribal sovereignty and to protect Indian gaming revenues to support economic development.. Congress responded with the set of compromises which evolved into the Indian Gaming Regulatory Act

The primary legislators involved in drafting the Act were Senator Daniel Inouye of Hawaii, Representative and then (as of 1987) Senator John McCain of Arizona, and Representative Mo Udall of Arizona. As S.555, the bill passed the United States Senate by voice vote on September 15, 1988. The House then passed the same bill, without it going through committee, by a 323–84 margin on September 27. President Ronald Reagan signed it into law on October 17, 1988.

As is often the case, some aspects of the law had to be clarified later through court cases. Whether revenue from the Indian casinos was subject to other governmental taxation was determined in Chicksaw Nation v. United States.

Three classes

The Act establishes three classes of games with a different regulatory scheme for each:

Class I

Class I gaming is defined as traditional Indian gaming and social gaming for minimal prizes. Regulatory authority over class I gaming is vested exclusively in tribal governments and is not subject to IGRA's requirements. .

Class II

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 in connection therewith) and if played in the same location as the bingo, pull tabs, punch board, tip jars, instant bingo, and other games similar to bingo. Class II gaming also includes non-banked card games, that is, games that are played exclusively against other players rather than against the house or a player acting as a bank. The Act specifically excludes slot machines or electronic facsimiles of any game of chance from the definition of class II games. Tribes retain their authority to conduct, license, and regulate class II gaming so long as the state in which the Tribe is located permits such gaming for any purpose and the Tribal government adopts a gaming ordinance approved by the National Indian Gaming Commission. Tribal governments are responsible for regulating class II gaming with Commission oversight. Only Arkansas, Hawaii, Indiana, and Utah continue to prohibit all types of gaming.

Class III

The definition of class III gaming is broad. It includes all forms of gaming that are neither class I nor II. Games commonly played at casinos, such as slot machines, blackjack, craps, and roulette, clearly fall in the class III category, as well as wagering games and electronic facsimiles of any game of chance. Generally, class III is often referred to a casino-style gaming. As a compromise, the Act restricts Tribal authority to conduct class III gaming.

Before a Tribe may lawfully conduct class III gaming, the following conditions must be met: (1) The Particular form of class III gaming that the Tribe wants to conduct must be permitted in the state in which the tribe is located; (2) The Tribe and the state must have negotiated a compact that has been approved by the Secretary of the Interior, or the Secretary must have approved regulatory procedures; and (3) The Tribe must have adopted a Tribal gaming ordinance that has been approved by the Chairman of the Commission.

The regulatory scheme for class III gaming is more complex than a casual reading of the statute might suggest. Although Congress clearly intended regulatory issues to be addressed in Tribal-State compacts, it left a number of key functions in federal hands, including approval authority over compacts, management contracts, and Tribal gaming ordinances. Congress also vested the Commission with broad authority to issue regulations in furtherance of the purposes of the Act. Accordingly, the Commission plays a key role in the regulation of class II and III gaming.

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