Review of The Indian Tribal Gambling Regulations

It was within this new context that large-scale Indian gambling made its appearance. One of IGRA’s purposes was to ensure that the proceeds from tribal gambling were used to fund tribal government operations, including allowing for investment in the infrastructure relating to the promotion of tribal economic development.

Review of Regulations
In its 1987 Cabazon decision, the Supreme Court held that the state of California had no authority to apply its regulatory statutes to gambling activities conducted on the reservation. In essence, this ruling held that unless a state prohibited a certain form of gambling throughout the state (in practice meaning either by means of its constitution or its criminal code), it could not prohibit gambling on reservations on its territory. In the Cabazon case, the Supreme Court concluded that because bingo and card games were permitted in California in some form¾in that case, for charitable purposes¾and were merely regulated by the state, these games could not be considered to be prohibited. The Court stated that “In light of the fact that California permits a substantial amount of gambling activity, including bingo, and actually promotes gambling through its state lottery, we must conclude that California regulates rather than prohibits gambling in general and bingo in particular.” The conclusion was that tribes could operate these games on their reservations and that the authority to regulate them lay with the tribes, not the state.

This decision prompted the passage in 1988 of the Indian Gaming Regulatory Act. 46 IGRA provides a regulatory framework for the conduct of gambling on Indian lands. It divides the gambling into three classes, each with a separate treatment:

legal relationship with Indian tribal governments as set forth in the Constitution of the United States, treaties, statutes, Executive orders, and court decisions. . . . The United States continues to work with Indian tribes on a government-to-government basis to address issues concerning Indian tribal self-government, trust resources, and Indian treaty and other rights.” 46 25 U. S. C. A. §2701-2721.

· Class I consists of traditional tribal games and social games for prizes of nominal value, all of which are subject solely to tribal regulation;

· Class II consists of bingo, instant bingo, lotto, punch cards, and similar games and card games legal anywhere in the state and not played against the house. A tribe may conduct or license and regulate Class II gambling if it occurs in a “state that permits such gaming for any purpose by any person” and is not prohibited by federal law;

· Class III consists of all other games, including electronic facsimiles of games of chance, card games played against the house, casino games, pari-mutuel racing, and jai alai. Class III games may be conducted or licensed by a tribe in a state that permits such gambling for any purpose or any person, subject to a state-tribal compact. The compact may include tribal-state allocations of regulatory authority; terms of criminal justice cooperation and division of labor; payments to the state to cover the costs of enforcement or oversight; tribal taxes equal to those of the state; procedural remedies for breach of the compact; and standards for the operation of gambling, including licensing. 47

Class II Tribal/ Federal (NIGC) Regulation One of IGRA’s provisions was the establishment of the National Indian Gaming Commission (NIGC), which was given certain regulatory and investigative functions regarding Indian gambling. Originally the NIGC’s responsibilities were focused largely on Class II facilities, but the rapid growth in Class III operations has resulted in a shift of its emphases toward this sector of Indian gambling.

NIGC’s regulatory responsibilities regarding Class II gambling are extensive. Prior to the opening of any Class II operation, NIGC must review and approve all related tribal gambling ordinances. If a tribal government is working with an outside investor, the NIGC also is charged with reviewing all contracts with that outside management company.

47 25 U. S. C. §2701( d)( 7).