Gambling is a staple of Indian Reservation economies dating back to 1979. The sovereignty of Native American tribes affords them immunity from many federal gambling regulations, and despite having to still operate within the framework of the Indian Gaming Regulatory Act of 1988 and several other statutes, makes it much easier for Native Americans to operate casinos, bingo halls and other gambling venues.
The first casino, a high stakes bingo hall, in fact, was built by the Seminole Tribe of Florida in 1979. When the state of Florida threatened to close down the casino, the Seminole tribe sued in the federal courts. The courts recognized their right to operate by stating that unless the gaming is a criminally regulated in the state, the tribes can continue to operate. Tribes in California were met with a similar challenge, but they, too, won their case.
The Indian Gaming Regulatory Act, passed in response to those legal challenges, had 3 main concerns:
- Establish a legal framework for the tribes to operate within.
- Protect and encourage gaming as a means of revenue and economic development.
- Protect Indian gaming from organized crime and other negative influences.
The Act continues to protect and foster entrepreneurship for Native Americans to this day despite ongoing disputes with the states.
Gambling on casinos exploded in the years that followed; by the year 2000, over 150 tribes across the U.S. had begun operating a casino. The beginning of the 21st century was no different. By 2005, annual revenue of Indian gaming exceeded $22 billion and, as of 2017-2018, has jumped to over $32 billion, roughly 25% of all the gambling revenue in the US.
Despite all this growth, there are still several problems that have sprung up across Indian reservations. Revenue for each individual casino varies greatly and is dependant upon a variety of factors, one being the location of the casino. Whereas casinos close to large cities rack up revenue, those further away, the majority of reservations and casinos, make less. For those casinos closer to cities, economic development has progressed significantly faster, but simply pointing to revenue numbers is not indicative of economic growth on all Indian reservations; Native Americans remain the most impoverished minority in the United States.
Regardless, no one would have predicted the amount of growth that has actually occurred since the enactment of the Indian Gaming Regulatory Act in 1988. So then, what does the future of gambling on Indian Reservations look like?
Of the 573 federally recognized tribes, only 240 operate the 450 casinos across the US. More tribes will continue to attempt to collect their share of the growth.
More casinos, including those on Indian Reservations, will continue to turn to online gambling in the coming years as well. When the Indian Gaming Regulatory Act was put in place, the government did not foresee the internet and online gambling, so only traditional gambling settings fall under its jurisdiction. Currently, online gambling falls under the jurisdiction of the states where much debate is taking place on how to divvy up the market. However, some tribes can set up their own license to regulate their own online gambling venture: “any tribe which has successfully and honestly conducted class II gaming for three years can apply to become self-regulating. And most of them have.” ¹ The problem involves the types of games tribes will be able to administer online under their own authority. Class I and II games, traditional games of chance, are acceptable, but class III gaming require state approval.
The other major hurdle regards who the online gaming should be available for. Traditional casinos have an exact location, but what happens when players try to join from around the world. The accepted doctrine is that the location of online gambling actually takes place in the server of the business that hosts. This is the accepted doctrine in several US states and other locations that have legalized online gambling. Essentially this means that tribes could host class I and II online gaming for players around the world.²
The future of gambling for Indian Reservations has become a major point of concern for the online gambling community at large as well as Native American tribes across the US.
Richard James Grellner, attorney at law and owner of RJG Law, PLLC, specializes in tribal law in Oklahoma. RJG Law specializes in intra-tribal relationships as well as those existing between tribes and the federal government, state governments, and non-Indian corporations.
Property rights and business contracts are popular areas of dispute, but our Oklahoma tribal law firm has worked with several tribes including the Otoe-Missouria, Apache Tribe of Oklahoma, Comanche Nation, Eastern Shawnee Tribe and more on a wide variety of legal concerns.
Interested in learning more about how Richard Grellner and the team at RJG Law can help you?
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- Owens, Martin. “Could US Indian Tribes Set up Their Own Internet Gambling?,” CalvinAyre, 1 July 2015.