Indian Gaming Regulatory Act

Historic and cultural Gambling is a part of many traditional Indian cultures. Tribal games include dice and shell activities, archery competitions, races, and so on. When Native Americans were moved to Indian Reservations in the mid- to late 1800s, most were left with limited economic opportunity. Today, most of these reservations "are located in remote areas with little indigenous economic activity.... [They] have some of the highest rates of poverty, unemployment, welfare dependency, school dropout, alcoholism, and other indicators of poverty and social distress of any communities in the U.S." The use of gaming to generate profit did not begin until the late 1970s and early 1980s within Indian communities. Several tribes, especially in California and Florida, opened bingo parlors as a way to earn revenue. Their actions were related to the search for new sources of revenue, given the emphasis the Reagan administration placed on economic self-sufficiency for the tribes. Legal While bingo was legal in California and Florida, those states had stringent regulations. Operating on the history of tribal sovereignty, some tribes did not comply with these laws. High-stakes Indian bingo operations soon arose in California, Florida, New York and Wisconsin. The industry grew rapidly. State governments began contending that revenues from their own gaming operations dropped as Native American operations increased the potential stakes. Several laws influenced the creation of the Indian Gaming Regulatory Act (IGRA). Many of these influential laws came from U.S. Supreme Court rulings regarding tribal sovereignty. While a number of court rulings played a significant role in the development of legislation regarding reservation gambling rights, two landmark cases, Bryan v. Itasca County and California v. Cabazon Band of Mission Indians, provided major legal breakthroughs. Bryan v. Itasca County In the early 1970s, Helen and Russell Bryan, members of the Chippewa Tribe, lived on a reservation in Itasca County, Minnesota. In 1972, the county notified them that their mobile home was subject to state property taxes. Unable to pay the tax, they turned to legal services and filed a class action lawsuit against the state, alleging that the state did not have the jurisdiction to tax personal property of Native Americans living on reservations. According to the U.S. Constitution, the federal government possesses the sole right to treat with Native Americans. Case law has since granted Congress jurisdiction over Indian reservations. Yet, Public Law 280, passed by Congress in 1953, transferred criminal jurisdiction over Indian reservations from the federal government to certain states. Although both the district court and Minnesota Supreme Court originally ruled in favor of the state, the U.S. Supreme Court reversed this decision in 1976. The Court interpreted PL 280 more narrowly, designed to address only "crimes and civil disputes, not a unilateral grant of broad authority to states." States began lobbying the federal government to allow states to regulate Indian gaming. States argued that their regulation was needed to stop infiltration by organized crime. They also wanted to be able to tax revenues gained by Indian gaming. Tribes fought the states in an effort both to maintain tribal sovereignty and to protect Indian gaming revenues to support economic development. Congress responded with the set of compromises which evolved into the Indian Gaming Regulatory Act of 1988. The primary legislators involved in drafting the Act were Senator Daniel Inouye of Hawaii, Representative and then (as of 1987) Senator John McCain of Arizona, and Representative Mo Udall of Arizona. Representative Udall had previously sponsored numerous bills regarding Native American issues and rights. At the time, Senator McCain was serving as a member of the Committee on Indian Affairs, of which Senator Inouye was the chairman. As S.555, the bill passed the United States Senate on September 15, 1988. And, in 2009, the Supreme Court ruled in Carcieri v. Salazar that the Department of the Interior could not take land into trust that was acquired by tribes recognized after 1934. ==Three classes==

The Act establishes three classes of games with a different regulatory scheme for each: Class I Class I gaming is defined as (1) traditional Indian gaming, which may be part of tribal ceremonies and celebrations, and (2) social gaming for minimal prizes. Regulatory authority over class I gaming is vested exclusively in tribal governments and is not subject to IGRA's requirements. Class II Class II gaming is defined as the game of chance commonly known as bingo (whether or not electronic, computer, or other technological aids are used in connection therewith) and, if played in the same location as the bingo, pull tabs, punch board, tip jars, instant bingo, and other games similar to bingo. Class II gaming also includes non-banked card games, that is, games that are played exclusively against other players rather than against the house or a player acting as a bank. The Act specifically excludes slot machines or electronic facsimiles of any game of chance from the definition of class II games. Tribes retain their authority to conduct, license, and regulate class II gaming so long as the state in which the Tribe is located permits such gaming for any purpose, and the Tribal government adopts a gaming ordinance approved by the National Indian Gaming Commission (NIGC). Tribal governments are responsible for regulating class II gaming with Commission oversight. Only Hawaii and Utah continue to prohibit all types of gaming. Class III The definition of class III gaming is broad. It includes all forms of gaming that are neither class I nor II. Games commonly played at casinos, such as slot machines, blackjack, craps, and roulette, clearly fall in the class III category, as well as wagering games and electronic facsimiles of any game of chance. Generally, class III is often referred to as casino-style gaming. As a compromise, the Act restricts Tribal authority to conduct class III gaming. Before a Tribe may lawfully conduct class III gaming, the following conditions must be met: • The Particular form of class III gaming that the Tribe wants to conduct must be permitted in the state in which the tribe is located. • The Tribe and the state must have negotiated a tribal–state compact that has been approved by the Secretary of the Interior, or the Secretary must have approved regulatory procedures. • The Tribe must have adopted a Tribal gaming ordinance that has been approved by the Chairman of the Commission. The regulatory scheme for class III gaming is more complex than a casual reading of the statute might suggest. Although Congress clearly intended regulatory issues to be addressed in Tribal–State compacts, it left a number of key functions in federal hands, including approval authority over compacts, management contracts, and Tribal gaming ordinances. Congress also vested the Commission with broad authority to issue regulations in furtherance of the purposes of the Act. Accordingly, the Commission plays a key role in the regulation of class II and III gaming. == FBI jurisdiction ==

The Act provides the Federal Bureau of Investigation (FBI) with federal criminal jurisdiction over acts directly related to Indian gaming establishments, including those located on reservations under state criminal jurisdiction. Since the inception of IGRA, the FBI has devoted limited investigative resources to Indian gaming violations. ==The industry==

The most recent Indian gaming statistics, provided by the National Indian Gaming Commission (NIGC), indicate there are approximately 360 Indian gaming establishments in the United States. These casinos are operated by approximately 220 federally recognized tribes, and they offer Class I, Class II and Class III gaming opportunities. The revenues generated in these establishments can be substantial. Tribal casinos located in the eastern United States generated roughly $3.8 billion in FY02. Those located in the Central United States recorded gross revenues of approximately $5.9 billion, while those located in the Western United States generated close to $4.8 billion. Most of the revenues generated in the Indian gaming industry are from Indian casinos located in, or near, large metropolitan areas. Currently, 12% of Indian gaming establishments generate 65% of Indian gaming revenues. Indian gaming operations located in the populous areas of the West Coast (primarily California) represent the fastest growing sector of the Indian gaming industry. There are 565 federally recognized tribes in the United States. While not all tribes will seek to establish tribal gaming establishments, it is likely that more may do so. Additionally, many of the non-federally recognized tribes are seeking federal recognition to gain access to Indian gaming opportunities and other benefits of the federal relationship. Regulations The Act's purpose is to provide a statutory basis for the operation of gaming by tribes to promote tribal economic development, self-sufficiency, and strong tribal governments. IGRA provides a basis for the regulation of Indian gaming adequate to: shield it from organized crime and corrupting influences; ensure that the tribe is the primary beneficiary of gaming revenues; and ensure Indian gaming operations are fair and honest for the operator and the players. Indian gaming revenues grew from $100 million in 1988 to $16.7 billion in 2003. Since 2009, over $26.5 billion has been generated yearly. Over 220 tribes in 29 states currently conduct 350 Indian gaming operations. NIGC auditors and investigators ensure that Indian gaming establishments are complying with the minimum gaming standards outlined in IGRA. To accomplish this, NIGC auditors conduct yearly audits of gaming records maintained by Indian gaming establishments and, when appropriate, investigate regulatory matters. The NIGC has a major responsibility in the growing Indian gaming industry. Based on its congressional mandate, it is dependent on the FBI and/or other federal agencies to investigate allegations of criminal activity in Indian gaming establishments. The National Indian Gaming Association (NIGA) The National Indian Gaming Association (NIGA) is a nonprofit organization founded in 1985 made up of 184 Indian Nations, with additional nonvoting associate members. The purpose of the NIGA is "to protect and preserve the general welfare of tribes striving for self-sufficiency through gaming enterprises in Indian country," and to "maintain and protect Indian sovereign governmental authority in Indian Country." The NIGA seeks to advance the lives of Indian people economically, socially, and politically. To fulfill its mission, the NIGA works with the federal government and members of congress to develop sound policies and practices and to provide technical assistance and advocacy on gaming issues. The Indian Gaming Working Group (IGWG) In February 2003, in an effort to identify and direct resources to Indian gaming matters, the FBI and NIGC created the Indian Gaming Work Group (IGWG). The IGWG's purpose is to identify resources needed to address the most pressing criminal violations in the area of Indian gaming. This group consists of representatives from a variety of FBI subprograms (i.e. Economic Crimes Unit, Money Laundering Unit, LCN/Organized Crime Unit, Asian Organized Crime Unit, Public Corruption/Government Fraud Unit, Cryptographic Racketeering Analysis Unit, and Indian Country Special Jurisdiction Unit) and other federal agencies, which include Department of Interior Office of Inspector General (DOI-OIG), NIGC, Internal Revenue Service Tribal Government Section (IRS-TGS), Department of Treasure Financial Crimes Enforcement Network (FINCEN), Department of Justice (DOJ), Office of Foreign Assets Control (OFAC), US Department of the Treasury, and Bureau of Indian Affairs Office of Law Enforcement Services (BIA-OLES). The IGWG meets monthly to review Indian gaming cases deemed to have a significant impact on the Indian gaming industry. As a result of these meetings, several investigations have been initiated. The IGWG through its member agencies has provided financial resources, travel funds, liaison assistance, personnel resources, coordination assistance and consultation. The IGWG works as follows: • If suspected criminal activities are taking place in the Indian gaming industry and the interested office/agency does not have adequate resources to investigate this matter, the office/agency contacts the Indian Country Special Jurisdiction Unit, FBIHQ, at 202-324-3666. This contact may come from the FBI or an outside source or agency. • A small group of IGWG members will convene to determine if the alleged criminal violation is a matter of "national importance" in its effect(s) on the Indian gaming industry. If so, the IGWG will invite representatives from the affected FBI division, other federal agencies (if appropriate), the affected United States Attorney's office, and IGWG member agencies to meet and further review the case. • During this review, the agency eliciting the support of the IGWG will make a case presentation. Following a full review, the IGWG will assist the requesting office/agency to identify and obtain resources to assist in the investigation. • Throughout the investigation, the IGWG will assist by providing "experts" to assist in the investigation; allocating special funding (i.e., facilitating TDY travel, Title III support, special forensic examination, etc.); conducting liaison with other federal agencies; facilitating the establishment of Indian gaming task forces, and/or providing consultation. To properly detect the presence of illegal activity in the Indian gaming industry law enforcement offices with jurisdiction in Indian gaming violations should: • Identify the Indian gaming establishments in their territory. • Establish appropriate liaison with Tribal Gaming Commission (TGC) members, State Gaming Commission Representatives, State Gaming Regulatory Agency Representatives, and Casino Security Personnel. • Establish liaison with representatives from the NIGC and regional Indian gaming intelligence committees. Both will provide valuable information on scams, allegations of criminal wrongdoing, and other patterns of illegal activity. • Make proactive attempts during crime surveys to identify criminal activity in Indian gaming establishments. • Send investigators and financial analysts to training which provides them with the knowledge and skills they need to effectively investigate criminal activity in Indian gaming establishments. ==Economic and social impacts==

The overall economic impact of the IGRA on American Indian communities remains unclear. According to Census Bureau data, the inflation-adjusted income of Native Americans living on reservations grew by 83 percent from 1970 to 2000. Although much of this growth was stimulated by federal support in the 1970s, such support faded in the 1980s and 90s. Similarly, the 2010 Census estimated that 26.6 percent of American Indians were below poverty level, the highest of any ethnicity. In 2011, the Government Accountability Office (GAO) reported that of over 4 million Native American citizens, nearly 30 percent are living in poverty, often lacking basic infrastructure. Likewise, Native Americans continue to have the highest unemployment rates of any ethnicity in the U.S. According to the earliest report by the Bureau of Indian Affairs in 1982, the unemployment level of American Indians living on or near a reservation was about 31 percent. In 1987, just prior to the IGRA, unemployment was 38 percent. By 1989, the year following the enactment of the IGRA, it had increased to 40 percent. The most recent BIA report from 2005 found American Indian unemployment at a staggering 49 percent. The 2010 U.S. Census reported unemployment of Native Americans (including those living both on and off reservations) and Alaskan Natives to be 17.9 percent, tied with African American unemployment as the highest of any race in the U.S. ==Tribal sovereignty==

The issue of Native American sovereignty has been debated for over 200 years. Chief Justice John Marshall stated that Native American tribes are "domestic dependent nations under the umbrella of U.S. government protection." The IGRA's goals—strong tribal government, self-sufficiency, and economic development—greatly affect sovereignty issues today. Tribes, state governments, the federal government, and businesses disagree about who should be given regulatory power over the thriving Indian gaming industry. To understand the issues of gaming regulatory power and sovereignty, both state and tribal rights must be considered. State rights Wayne Stein, professor of Native American Studies at Montana State University, says that the purpose of states is to benefit their citizens, especially in economic matters. According to his article titled "Gaming: The Apex of a Long Struggle", states are likely the largest "opponent of Indian nations, their governments, and their new efforts in the gaming world." States, likely concerned about their own interests, receive criticism for taking a stance that opposes tribal sovereignty. Stein argues that Native Americans are still state citizens, regardless of tribal affiliation, and therefore, like any other state citizen should be benefitted by the state. Recognizing that they are missing out on untaxed revenue, states often try to gain more control over Indian gaming. ==Opposition==

The IGRA has proven to be a major focus of the controversy surrounding Indian gambling. The controversy and concerns come from the following three main areas: (1) tribal–state compacts (2) negative public reaction, and (3) gambling competition. Tribal–State Compact is a form of cooperation commonly used in Class III gambling. These compacts affect the balance of power between states, federal, and tribal governments. Although the compact must receive final approval from the U.S. Secretary of the Interior, the compact demonstrates a state's ability to regulate and even tax Class III tribal gaming within its borders. In addition, compacts often include language relating to a state's right to enforce criminal and civil law and prosecution for gambling-related crimes. This right may conflict with tribal law enforcement jurisdictions and legal procedures. Since enforcing gambling-related laws requires resources, states ensure the compact includes language requiring tribes to financially compensate the state for regulation and law enforcement. Another complaint from other U.S. citizens is the negative effects casinos have on nearby neighborhoods. They argue that casinos increase traffic, pollution, and crime. As a result, cities find themselves bearing the cost of addressing these issues. ==Proposed changes==

Since its passage, a variety of changes and proposals have been considered, and changes are still being considered. Congress has discussed proposals to impose a moratorium on any new tribal–state compacts or on new Indian gaming operations. The Indian Trust Lands Reform Act was introduced in 1995 and 1997, marking an attempt to deny the Secretary of the Interior the power to take additional lands in trust for Native American tribes if it were for "commercial" purposes (such as gaming). Several Congressional members have expressed concern about the lack of regulation related to revenue sharing from funds generated by gaming. It is important to note that the regulations and methods of Indian gaming are still evolving and changing. == See also ==