The National Indian Gaming Association (NIGA) is holding its annual convention in Las Vegas next month. It will be the Association’s 35th convention. The conventioneers will eagerly discuss two issues: sports betting in Indian Country and tribally owned casinos in conventional jurisdictions. Indian gaming has come a long way since the Seminole Tribe of Florida won the right to operate high-stakes bingo in 1979; it has grown from $100 million a year in 1988 to $35 billion in 2019. Indian gaming generates as much revenue as conventional casinos and the lines between tribal and commercial gambling are blurring.
In 1989, Professor William R. Eadington of the University of Nevada, Reno, held one of his international gaming conferences in Reno. The International Conference on Gambling and Risk Taking that year was focused on Native American gaming. The Indian Gaming Regulatory Act (IGRA) of 1988 had just been passed, but implementation had not begun.
Professor Eadington was an economist. He thought people ought to study important issues and discuss them in detail, particularly when the subject would have a major impact on the fabric of society. Bill believed that gaming always had an impact on society and that public policy on gaming should be considered and informed. He built his career around the careful study of gaming and sharing his research with public officials, regulators, and operators.
The conferenc
es were unique in their time and without a peer even today. Experts from around the world submitted papers and, when possible, personally presented the papers to the conference.
At that time, there was no road map for the process of launching tribal gaming. However, two things were clear from IGRA. First, tribes could legally conduct gaming. Second, an agreement, also known as a “compact,” between the tribes and the states in which they were located was necessary. No one knew what to expect and there were hundreds of differing opinions as to how the Act would play out in real time.
In general and in a figurative sense, the audience was split down the middle, rather like the French Parliament. On one side of the aisle sat the Native Americans, tribal leaders experienced in operating bingo and federal legal wars. On the other side sat the lawyers. A third potentially interested party, casino operators, was absent. At the time, casino owners and managers did not believe that Indian gaming was significant for them. Of course, anyone paying attention to the growth of bingo on reservations would have realized that Indian gaming was going to be momentous.
American Indian tribes have been struggling with federal legislation for centuries. For some tribes, this has been ongoing since the formation of the federal government. All tribes have a treaty with the federal government that defines tribal membership and territory. In addition, other federal laws were created expressly to define the limits of tribal sovereignty and federal authority over tribal members and governments. IGRA was also created for that purpose, to limit what tribes could do without a state’s approval.
In 1987, the United States Supreme Court ruled in favor of the Cabazon Band of Mission Indians in a dispute with California. Under the decision, the tribes could operate high-stakes bingo without state regulation or interference. That ruling made attorneys general, governors, and law enforcement agencies everywhere very uncomfortable.
The Cabazon and Morongo tribes had been conducting bingo and poker on their reservations in California, just as tribes in Washington, Michigan, Minnesota, Wisconsin, Florida, and Oklahoma were doing. The state of California sought to prevent the gambling, arguing in court that the bingo and poker games the tribes conducted violated state regulations. The Supreme Court ruled that California permitted gaming and did not forbid it; therefore, it could neither forbid nor regulate Cabazon gaming. In theory, the decision opened the door for all tribes to offer gaming — as long as the host state permitted any form of gaming to any person for any purpose and that included charitable games, casino nights, and lotteries.
States rushed to Congress to put some limits on the Supreme Court decision. Congressional debates led to the creation of the compact. Tribes were forced to find common ground with the states before opening a casino, while states were compelled to negotiate in “good faith” and not stonewall the tribes. The Act was brand new when Bill Eadington convened his conference to discuss it. The tribes had high hopes for Indian gaming. The lawyers thought nothing important was likely to result from it. However, they were wrong.
Some states, like Minnesota, believed the Act required them to grant the right to operate all casino games as quickly as possible. Others, like Connecticut, sought to limit tribal gaming to table games only. Connecticut held that only table games were legal in the state. However, within two years, the Mashantucket Pequot tribe negotiated a compact that included slot machines. The tribe has paid 25 percent of its slot revenue to the state ever since.
The Act played out differently in every state; in fact, it’s still evolving. Most recently, Michigan, Connecticut, Washington, Arizona, and Florida negotiated new compacts that allow the tribes to offer sports betting. California is moving down the same path. Sports betting is the latest trend in legislation and it seems every state wants a piece of the action, and of course the taxes.
As sovereign nations, tribes cannot be taxed by a state, but compacts usually include some percentage of gaming revenue to be “shared” with the state. Those shared revenues have become extremely important to some states. Tribes in Oklahoma, Connecticut, and Florida have shared billions of dollars with their states. The importance of tribal contributions to a state’s economy and budget has given tribes a great deal of political power and influence. In its recent negotiations with Florida, the Seminole Tribe promised the state more than $25 billion over the course of the compact. In exchange, the Seminoles control sports betting in Florida and are allowed additional table games not part of the original compact. In Washington, the tribes gained complete control over sports betting, including mobile betting. In Connecticut, the tribes agreed to share sports betting revenues, but blocked the door to any additional non-Indian gaming in the state.
In 1989, no one, not Professor William R. Eadington, I. Nelson Rose, or any of the tribal leaders, could have imagined the size and scope of Indian gaming in 2021. There are 245 federally recognized tribes in 29 states operating over 500 Indian casinos. According to the National Indian Gaming Commission, tribal casinos generated $34.6 billion in gaming revenue in 2019. Some tribes have expanded past casinos on tribal land into other forms of gaming.
Tribes like the Seminole, Pequot, Poarch Creek, and Mohegan have built major national and even international gaming companies with multiple casinos in other jurisdictions. In 2007, the Seminole Tribe purchased a portion of the Hard Rock franchise. It has become a major player in the gaming industry with casinos and hotels in Atlantic City and other key locations; it is said to be considering the purchase of the Cosmopolitan in Las Vegas. Two other tribes are already in Las Vegas. The Mohegan Tribe is operating the casino in the Virgin Hotel and the San Manuel Band of Mission Indians recently purchased the Palms.
As the National Indian Gaming Associated heads to Las Vegas, the attendees will do so with the knowledge that they are part of a significant national industry. In interviews with tribal leaders in Washington after the state approved sports betting for the tribe, the Associated Press asked what leaders thought about gaming. One leader said that for her tribe, “Gaming is good.” Another said providing services for tribal members was always a challenge and every dollar of gaming profit went to help the tribe and its members. Tribes owning casinos in Las Vegas and operating sports betting are the latest chapters in the impact of IGRA.
