A Comparative Analysis of Indian Gaming in the United States

Abstract

A Comparative Analysis of Indian Gaming in the United States William V. Ackerman (bio) and Rick L. Bunch (bio) The United States has witnessed a dramatic increase in legal gaming on Indian reservations since the 1987 landmark decision by the United States Supreme Court in California v. Cabazon Band of Mission Indians.1 Currently there are 240 Indian tribes operating more than 400 casinos and bingo halls in 28 states. Total gaming revenues reached $26.7 billion in 2008.2 Following the Cabazon decision, various states and the Nevada gaming interests strongly encouraged Congress to take legislative action to limit and regulate Indian gaming. In 1988, after a major legislative battle between Indian tribes, states, and the non-Indian gaming industry, Congress passed the Indian Gaming Regulatory Act (IGRA). Since the passage of that legislation, Indian gaming has been carried out under the rules and regulations incorporated in the Federal Indian Gaming Regulatory Act.3 Section 2701 sets out congressional findings regarding the need for the IGRA, in particular, the need for clear standards and regulations for the conduct of gaming on Indian lands and the promotion of tribal economic development, tribal self-sufficiency, and strong tribal government. Section 2701(5) provides tribes with “the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by federal law and is conducted within a state which does not as a matter of criminal law and public policy prohibit such gaming activity.” The IGRA requires Indian tribes to negotiate tribal-state compacts with the state in which they are located to govern the conduct of Class III gaming (section 2710[d]). Previous research on Indian gaming in South Dakota discovered very restrictive and unfavorable tribal-state compacts that appear to border [End Page 50] on economic racism.4 This article expands this previous research by exploring the influence of tribal-state Indian gaming compacts for the Indian casinos located in the contiguous United States. The purpose is to describe the current state of the Indian gaming industry. For the states that have Class III Indian gaming we document the number of casinos, numbers of gaming devices, and gaming revenues. We also provide an in-depth analysis of common practices in compact negotiation and how tribal-state compacts vary geographically. States are ranked based on the degree of control that they attempt to exercise over sovereign Native American tribes. Concern is raised over the growing interest by certain states to require greater revenue sharing from the tribes’ gaming operations. We find that the IGRA does not fairly regulate Indian gaming and does not protect Native American sovereignty, and we suggest changes to provide a more equitable policy to deal with Native American gaming operations. The Growth and Diffusion of Indian Gaming In 1989 only Nevada and Atlantic City allowed casino gambling. Following the Cabazon decision, Congress passed the IGRA in 1988, and by 1994 ten states allowed casino gaming and twenty-five others had some form of tribal gaming.5 Revenues from tribal gaming have demonstrated continuous increase. In 1988 tribal gaming generated $121 million. By 1998 this figure had increased to $8.5 billion and has increased continuously since to reach $26.7 billion in 2008 (fig. 1). These data have been compiled from gaming operation audited financial statements received by the National Indian Gaming Commission through May 11, 2009, and adjusted to reflect final annual revenues published in the Indian Gaming Industry Report: 2009–2010.6 In 2008 there were estimated to be more than 440 Indian casino operations in 28 states. Twenty-four of these states operate Class III gaming and are the subject of this research. The Location and Economic Impact of Indian Gaming Prior to California v. Cabazon the United States witnessed an increase in gaming, especially high-stakes bingo operations on Indian reservations. This increased activity began to attract the attention of the states and led to attempts to prohibit or control Indian gaming. The Seminole [End Page 51] Tribe in Florida and the Oneida Tribe in Wisconsin sought to open high-stakes bingo operations on their reservations. The states of Florida and Wisconsin attempted to block such activity on...