The crushing defeat of Proposition 48 in California is negative way to end the year for proponents of off-reservation casino expansion, but we’ve yet to see the last of battles over tribes seeking to take land into trust for the purpose of building casinos. Despite the increasing number of such developments in the past few years, they have not gotten many national headlines because the big casino industry players have largely been uninvolved. Instead, a majority of the battles have been fought among Indian tribes and smaller casino companies.

A resounding 60 per cent of California voters opposed the state ballot proposal to allow the North Fork Rancheria Band of Mono Indians to erect a Vegas-style casino an hour’s drive from the tribe’s reservation, near a major highway near Fresno. A well-funded opposition, led by the casino-owning Table Mountain Rancheria; Senator Dianne Feinstein’s fierce opposition to “reservation shopping”; and the armed takeover at the Chukchansi Gold casino, in October, were factors that convinced voters to oppose Prop 48. The matter will likely end up in litigation, because the casino had already been approved by the Department of the Interior, the state legislature, and the governor of California, but it offers a glimpse of how prevalent and contentious the off-reservation issue has become across the country.

Earlier this fall, the Tohono O’odham tribe of Arizona broke ground on a controversial 250,000 square foot casino in the middle of Glendale, amidst an uproar from the local community, culminating in what is perhaps the strangest off-reservation case to date. Though the Tohono O’odham’s historic lands are located 160 miles to the south, along the Mexican border, the Obama Administration ruled that, pursuant to a seemingly innocuous 30 year old law, suburban land could be taken into federal trust and used for gambling by the tribe.

Local opponents such as the Gila River tribe, which spent $10 million lobbying against the project, were outraged to learn they could do nothing to prevent a Vegas-style casino from being built almost literally in their back yard, just across the street from a local high school. Many in Washington were also furious, most notably Arizona Senator John McCain. McCain was one of the original architects of the 1988 Indian Gaming Regulatory Act, the first law to authorize casino gambling as a means of economic development for impoverished Native Americans. McCain lashed out at Indian Affairs Secretary Kevin Washburn several times this summer in congressional hearings for approving the Glendale casino.

Indian gaming, now a $19 billion industry in the U.S., was originally limited to existing sovereign tribal reservations. But as revenues have flattened due to the recession and new competition, many tribes have gotten the blessing of the Obama Administration to build casinos on cherry-picked sites near major population centers, sometimes hundreds of miles from their historic lands.

Only three off-reservation casinos were approved from 1988 to 2011, under narrow circumstances. By contrast, in the past three years a flood of new projects have been approved by the Department of the Interior, after the scrapping of the so-called “commutability standard” that requires that casinos be located within commuting distance of a tribe’s reservation.

The proliferation of off-reservation proposals can be linked back to President Obama, who is probably the most sympathetic to Native Americans of any modern president. The Obama’s administration’s support for these projects stems from his goal of expanding opportunities for Native Americans, by far the most economically disadvantaged people group in the U.S. Earlier this summer he made the first presidential visit in 15 years to an Indian reservation, and his administration has increased funding for tribal development initiatives.

Critics say Mr. Obama is overstepping Congress’s original intent by approving controversial off-reservation casinos. “It’s basically changing the law by executive action”, said June DeHart, an attorney with the law firm Manatt, Phelps & Phillips who represents interests opposed to off-reservation gaming, harping on a familiar complaint against the president by Republicans. “Their goal is to provide more casinos to tribes, and if they have to approve off-reservation casinos to do it, then that’s what they will do”.

The goal of the expansion was to provide jobs and economic opportunity for tribes, but the trend is causing uproar among local politicians who feel powerless to stop unwanted casinos from parachuting into their communities. Also at issue is the fact that when land for a casino is taken into trust and granted reservation status, there are accompanying privileges. Commercial casino operators say that such tribal casinos have an unfair competitive advantages because of lower tax rates and looser regulation, and that they risk oversaturation of U.S. gaming markets.

“We would characterize it as a circumventing of process, or even a loophole, especially as it relates to taking of lands into trust that are nowhere near the ancestral lands”, said Alan Feldman, a Senior VP with MGM Resorts. Other casinos companies, such as Penn National Gaming and Boyd Gaming, have also opposed off-reservation casino proposals.

Under normal procedures, states have the final authorization over such projects. But since states negotiate what share of tribal revenues they get, approving such casinos, despite the objection of locals, is often seen as a quick way to improve state finances.

California has been the epicenter of Indian gaming generally, with 70 tribal gaming facilities built in the last 15 years that bring in roughly $7 billion annually – nearing the size of Nevada’s $10 billion market. The resulting saturation has spurred a frantic pursuit of off-reservation casinos near the state’s major cities. Last November, an $800 million facility, backed by Station Casinos of Nevada, opened just north of San Francisco, and several other applications are pending in California. That’s the environment in which Prop 48 failed.

Elsewhere? In Michigan a rural tribe has been approved to build a casino near the Detroit metro area. A tribe in Massachusetts last summer announced its intention to build a casino on Martha’s Vineyard, much to the dismay of the elites that live and holiday there. A Wisconsin tribe sought to build a casino in New York, over 1000 miles away from Wisconsin, before withdrawing its bid earlier this year.

The next landmark decision is likely to be in Wisconsin itself, where re-elected Governor Scott Walker must approve or veto an off-reservation casino in Kenosha proposed by the Menominee tribe. Stiff resistance to the project has come from the Potawatomi tribe, which operates an off-reservation casino in Milwaukee, less than 40 miles away.