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Friday, April 20, 2012

Indian Gaming: Legal Background and the Indian Gaming Regulatory Act (IGRA)

Jane M. Smith
Legislative Attorney

In the 1980s, a number of Indian tribes developed high-stakes bingo and other gaming operations to raise non-federal revenue to fund their governments. In 1988, after the Supreme Court held, in California v. Cabazon Band of Mission Indians, that federal and tribal interests in Indian gaming preempted state law such that state regulation of gaming did not apply to tribal gaming operations on tribal land, Congress passed the Indian Gaming Regulatory Act (IGRA). IGRA provides a statutory basis for Indian tribes to conduct gaming on “Indian lands” and establishes a regime for regulating Indian gaming. It prohibits gaming on newly acquired land—that is, land acquired in trust after October 17, 1988—subject to two exceptions: the “two part determination”; and, land taken in trust as part of a land settlement, restoration of land for a restored tribe, or the initial reservation of a newly acknowledged tribe. In establishing a framework for regulating Indian gaming, IGRA was intended to balance the interests of the tribes, the states, and the federal government in Indian gaming and apportion responsibility for regulating it accordingly. To do this, IGRA divides Indian gaming into three classes: class I includes traditional or social gaming and is subject to exclusive tribal regulation; class II covers bingo and similar games and is subject to tribal regulation and oversight by the National Indian Gaming Commission (NIGC); and, class III includes all other gaming, including casino gaming or Las Vegas-style gaming, and generally can only be conducted pursuant to tribal-state compacts that must be approved by the Secretary of the Interior. IGRA also created the NIGC to provide regulation of Indian gaming on the federal level.

The tribal-state compact is the key to tribal casino gaming. Recognizing that some states might simply stonewall tribes and refuse to negotiate class III gaming compacts, Congress required that upon a request from a tribe to negotiate a compact, a state must negotiate in good faith. In order to create an incentive for states to negotiate in good faith, IGRA provided that tribes could sue states in federal district court for failing to negotiate in good faith. IGRA prescribes a series of steps to ensure that ultimately a tribe would be able to engage in class III gaming even over the state’s objections. However, in Seminole Tribe of Florida v. Florida, the Supreme Court held that Congress did not have authority under the Indian Commerce Clause to waive the states’ sovereign immunity to suits by tribes to enforce the good faith negotiation requirement. This decision, therefore, removed IGRA’s practical guarantee that tribes would be able to engage in class III gaming over the objections of the state and gave states a veto over tribal class III gaming—a state can simply refuse to negotiate a class III compact to deny a tribe the ability to engage in class III gaming. Increasingly, states have demanded significant revenue sharing and non-gaming concessions in exchange for class III compacts.

In the last five years, there have been several bills introduced in Congress to amend IGRA, primarily to restrict off-reservation gaming. Two bills have been introduced in the 112th Congress to amend IGRA. H.R. 4033, the Giving Local Communities a Voice in Tribal Gaming Act, would give local jurisdictions the right to veto a class III gaming operation that the state has agreed to in a compact. S. 771, the Tribal Gaming Eligibility Act, would restrict the availability of offreservation land for gaming by requiring that tribes demonstrate, by meeting certain criteria, that they have modern and historical ties to the land on which they propose to game.

Date of Report: April 9, 2012
Number of Pages: 27
Order Number: R42471
Price: $29.95

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