Indian Gaming Regulatory Act of 1988

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Indian Gaming Regulatory Act (1988)

Steven J. Gunn

Congress adopted the Indian Gaming Regulatory Act (IGRA) (P.L. 100-497, 102 Stat. 2475) in 1988 and established a complex system to authorize and regulate the gaming and gambling enterprises of American Indian tribes. The act divides Indian gaming into three classesI, II, and IIIand provides a different set of regulations for each class.

Class I gaming is defined by the act to include "social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or celebrations." The operation and regulation of class I gaming activities is left to "the exclusive jurisdiction of the Indian tribes."

Class II gaming includes bingo, games similar to bingo (such as pull tabs, lotto, punch boards, tip jars, and instant bingo), and non-banking card games (such as poker and other card games in which players bet against each other rather than against the house). Expressly excluded from the scope of class II gaming are banking card games (such as blackjack, baccarat, and chemin de fer), electronic games of chance, and slot machines.

The IGRA allows an Indian tribe to engage in class II gaming only if the state in which the tribe is located "permits such gaming for any purpose by any person, organization or entity," and the "governing body of the Indian tribe adopts an ordinance or resolution which is approved by the Chairman" of the National Indian Gaming Commission (NIGC). This Commission, a government agency consisting of three members, was created by the Act to monitor the class II and class III gaming activities of tribes throughout the country. Under the act, tribes are primarily responsible for regulating their own class II gaming activities, with oversight by the commission.

Class III gaming includes all forms of gaming that are not included in classes I and II. Games commonly played at casinos, such as slot machines, black jack (and other banking card games), craps, and roulette, fall within the scope of class III. For this reason, class III gaming is often referred to as casino-style gaming. Wagering and electronic games of chance are also included in class III.

In order for a tribe to conduct class III gaming, three conditions must be met. First, the type of class III gaming that the tribe wants to conduct must be permitted, "for any purpose by any person, organization or entity," in the state in which the tribe is located. Second, the tribe and the state must have negotiated a compact, or agreement, concerning the nature and extent of the class III gaming the tribe may conduct and the manner in which that gaming will be regulated, and that compact must have been approved by the secretary of the interior. Third, the tribe must have adopted a tribal gaming ordinance that has been approved by the Chairman of the NIGC.

The IGRA imposes upon states a duty to negotiate in good faith with Indian tribes to form class III gaming compacts. The Act originally contained a provision allowing tribes to sue noncompliant states in federal court to force the states to negotiate in good faith. However, the U.S. Supreme Court struck down that provision in the case of Seminole Tribe v. Florida (1996), finding that Congress did not have the authority, in this context, to allow tribes to sue states in federal court without the states' consent. Now, if states do not negotiate in good faith, tribes must resort to other remedies, including petitioning the secretary of the interior to approve special regulations authorizing the tribes' class III gaming activities.

The IGRA represents a compromise between the competing interests and powers of Indian tribes, states, and the federal government. Before Congress adopted the act, tribes generally had the right to engage in all forms of gaming, including casino-style gaming, with little regard for state laws regulating the permissible types of gambling or the size of prizes. The U.S. Supreme Court affirmed this right in the case of California v. Cabazon Band of Mission Indians (1987). However, Congress has the power to outlaw all forms of American Indian gaming, and was under considerable pressure from several states to do so in the mid-1980s. These states believed, among other things, that tribal gaming enterprises would become infiltrated by organized crime. Congress weighed the states' concerns against the tribes' interests in using gaming to promote economic development on their reservations. The IGRA, as adopted by Congress, allows tribes to engage in gaming, but it imposes restrictions on their ability to do so and it also gives the state and federal governments substantial authority to regulate tribal gaming activities.

Only federally recognized tribes have the right to operate casinos and to conduct other gaming activities under the IGRA. Indian groups that are not officially recognized by the United States government do not have rights under the IGRA, nor do individual Indians.

There are 562 federally recognized Indian tribes in the United States. Only 201 of these tribes operated class II or class III gaming enterprises in 2001, according to data from the NIGC. These tribes operated a total of 290 enterprises in twentynine states in 2001, generating over $12.7 billion in annual revenues. That amount, while significant for the tribes involved, was less than ten percent of the total revenues generated by the U.S. gaming industry in 2001.

Tribes may use the revenues generated by their class II and III gaming enterprises only for purposes designated in the IGRA. The act states that such revenues must be used to fund tribal government operations and programs (such as hospitals, schools, police and fire departments, tribal courts, and the like), to provide for the general welfare of the tribe, to promote tribal economic development, to make donations to charitable organizations, and to help fund the operations of neighboring cities and counties. Once these obligations have been met, a tribe may petition the secretary of the interior to approve a Revenue Allocation Plan under which the tribe may make per capita payments to individual tribal members. Approximately one-third of the tribes engaged in class II and III gaming distribute per capita payments to their members. The size of these payments varies considerably from tribe to tribe, depending on the profitability of the gaming enterprises.

Not all tribes have benefited from Indian gaming. Some refuse to engage in gaming on the grounds that it is inconsistent with their traditional cultures and values. Other tribes are located in sparsely populated sections of the country in which it is not possible to operate lucrative bingo halls or casinos. A limited number of successful gaming tribes, located primarily along the east and west coasts, generate the vast majority of all Indian gaming revenues, and there is no requirement in the IGRA that these tribes share their wealth with the poorer tribes in the middle of the country.

See also: Indian Civil Rights Act; Indian General Allotment Act (Dawes ACT); Indian Removal Act; Indian Reorganization act of 1934.


Eisler, Kim Isaac. Revenge of the Pequots: How a Small Native American Tribe Created the World's Most Profitable Casino. New York: Simon and Schuster, 2000.

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AMERICAN INDIAN GAMING REGULATORY ACT (1988), an attempt by Congress to find a compromise between the rights of tribes to engage in gaming activities and the ability of the states to control gambling within their borders. Neither group was pleased with the act, and several lawsuits have been filed over statutory interpretation. Many tribes want the definition of tribal land to include any property under control of the tribe; many states feel tribal land should be restricted to mean historic reservation land. Many tribes assert that they are federally recognized, self-governing units that can decide their own gaming policies; many states believe gaming policy should be defined in a state's constitution.

The act defines three categories of gaming: Class I encompasses social and traditional games solely within the Indian tribe's jurisdiction; Class II includes bingo and similar games authorized by tribal resolution in states where private gambling is not prohibited by law; Class III includes casinos and operates under the same restrictions as Class II, but in addition, a compact between the state and the Indian tribe must define how the gaming will be conducted and must be approved by the Secretary of the Department of the Interior. In the early twenty-first century over half the states had some form of Indian gambling.

Unlike profits from non-Indian gambling activities, tribal gambling profits, as stipulated by the act, must be used for the welfare of the tribe, such as for education and housing. A loophole in the law allows individuals to profit after the social issues have been addressed.

As the number of Indian casinos has grown, problems have arisen. Some casinos are successful and raise a tribe's standard of living, while others have gone bankrupt. In their search for investors to bankroll startup costs, tribes have become targets for organized crime. Additionally, states cannot regulate whether jackpots are awarded or if low-payout machines are used. In some cases where compacts negotiated in good faith have not been reached, tribes have operated casinos without signed compacts. The National Indian Gaming Commission acts as a watchdog for the act.


Riconda, Andrew, ed. Gambling. New York: H. W. Wilson Company, 1995.

Veda BoydJones

See alsoGambling ; Indian Economic Life .