Growth of The Tribal Indian Gambling

The result of those two developments was a rapid expansion of Indian gambling. From 1988, when IGRA was passed, to 1997, tribal gambling revenues grew more than 30-fold, from $212 million to $6.7 billion. 4 By comparison, the revenues from commercial casino gambling (hereinafter termed “commercial gambling”) roughly doubled over the same period, from $9.6 billion to $20.5 billion in constant 1997 dollars. 5
Since the passage of IGRA, tribal gambling revenues consistently have grown at a faster rate than commercial gambling revenues, in large part because a relatively small number of the Indian gambling facilities opened in densely populated markets that previously had little, if any, legalized gambling. This trend has continued. For example, from 1996 to 1997, tribal gambling revenues increased by 16.5 percent, whereas commercial gambling revenues increased by 4.8 percent. The growth rates for both, however, have shown signs of slowing over the same period. There is a degree of economic concentration in a relatively small number of gaming tribes. The 20 largest revenue generators in Indian gaming account for 50.5 percent of the total revenue; the next 85 account for 41.2 percent. 6

As was IGRA’s intention, gambling revenues have proven to be a very important source of funding for many tribal governments, providing much-needed improvements in the health, education, and welfare of Native Americans on reservations across the United States. Nevertheless, Indian gambling has not been a panacea for the many economic and social problems that Native Americans continue to face.

Only a minority of Indian tribes operate gambling facilities on their reservations. According to the Bureau of Indian Affairs (BIA), there are 554 federally recognized tribes in the United States, with 1,652,897 members, or less than 1 percent of the U. S. population. In 1988, approximately 70 Indian casinos and bingo halls were operating in a total of 16 states; in 1998, approximately 260 facilities were operating in a total of 31 states. 7 (See Figure 6-1) Of these 554 tribes, 146 have Class III gambling facilities, operating under 196 tribal-state compacts. 8

More than two-thirds of Indian tribes do not participate in Indian gambling at all. Some tribes, such as the Navajo Nation, have rejected Indian gambling in referenda. Other tribal governments are in the midst of policy debates on whether or not to permit gambling and related commercial developments on their reservations. 9

4 See chart entitled “Trends in Tribal Casino Gaming Revenues, 1988-1997.” Amounts are in constant, 1997 dollars based on the CPI-U-X1 index in the Economic Report of the President (February 1999), p. 398. For Indian gaming revenues from 1988 and 1995, see U. S. General Accounting Office, Tax Policy: A Profile of the Indian Gaming Industry (May 1997), p. 6. For Indian gaming revenues in 1996 and 1997, see International Gaming & Wagering Business, The Gross Annual Wager (August Supplements, 1997 and 1998). 5 See chart entitled, “Trends in Commercial Casino Gaming Revenues, 1988-1997.” Amounts are in constant, 1997 dollars based on the CPI-U-X1 index in the Economic Report of the President (February 1999), p. 398. For commercial casino revenues, see International Gaming & Wagering Business, The Gross Annual Wager (August Supplements, 1988 to 1997). 6 Letter from Penny Coleman, Deputy General Counsel, NIGC, to Donna Schwartz, Research Coordinator, Advisory Commission on Intergovernmental Relations, dated December 4, 1998. 7 See charts entitled, “States with Tribal Gaming in 1988” and “States with Tribal Gaming in 1998.” For 1988, there was no centralized information source, and the data was compiled from numerous sources, including the National Indian Gaming Commission; the Bureau of Indian Affairs; newspaper and magazine articles; and the Indian Gaming Magazine, Directory of North American Gaming (1999). For 1998, see National Indian Gaming Commission, “Report to the Secretary of the Interior on Compliance with the Indian Gaming Regulatory Act” (June 30, 1998). 8 Figures obtained by Commission staff in oral communication with the Bureau of Indian Affairs, March 4, 1999. The larger number of compacts is due to some tribes operating more than one gambling facility. 9 “Tribes Weighing Tradition vs. Casino Growth,” Brett Pulley, New York Times, March 16, 1999.