A Short Piece on the Indian Gaming Regulatory Act of 1988

The stated purpose of the Indian Gaming Regulatory Act was to regulate the operation of Indian gaming
as a means to promote tribal economic development, self-sufficiency, and strong tribal governments.
The act was intended to be a compromise between the states and the Indian tribes within their borders.
When Congress passed the Indian Gaming Act, they had the following goals in mind (Eade and Eade,
1997, 17):

GOAL 1. To provide a legal and statutory foundation for sovereign tribes to be involved in
gambling/gaming.

Congress formally recognized that gambling could be an effective tool for economic development on
Indian reservations.

GOAL 2. To ensure that the tribes would be the beneficiaries of gambling/gaming revenues and ensure
their right to sole ownership of gambling/ gaming operations.

The IGRA dictates that tribes and not individual members can have gambling operations. Indian
gambling is tribe-sponsored gambling, just as lotteries are state-sponsored gambling. Decisions about
profits must be made by the tribes. Decisions about profits from privately owned casinos are made by
the individuals or corporations that own them. However, IGRA rules said that an outside company that
invested in reservation casinos could receive up to 40 percent of its profits for seven years.

The act established the National Indian Gaming Commission (NIGC) to regulate and oversee tribal
gaming operations. Two of the NIGC’s responsibilities were to assess the fairness of casino management
contracts and judge the suitability of casino managers. The NIGC had to give final approval to all Indian
casino management contracts.

GOAL 3. To provide a framework to prevent organized crime’s potential infiltration into tribal
gambling/gaming.

Congress was fearful that organized crime would move on to the reservations.

They hoped that the IGRA and the National Indian Gaming Commission would prevent this. In spite of
unsubstantiated claims that organized crime has moved into Indian gambling, the act appears to have
been successful in preventing this.

GOAL 4. To establish a framework for state-negotiated compacts that define thetypes of games played,
payoff percentages, internal control procedures, and other enforcement concerns.

The states lobbied extensively for IGRA and the compacting provisions.

A compact is an agreement between sovereigns similar to a treaty. The states argued that compacts
were a way for the states to have some control over Indian gambling, particularly casino-style gambling.
Under the act, a tribe would advise the state of their intentions to offer casino gambling on Indian lands
and enter into a compact with the state. The tribe and the state would then negotiate the terms of the
compact (contract).

The intent of the act was to force the two parties to come to some compromise between opposing
views: Tribes—the states have no regulatory power on Indian lands; states—all state and local laws
should apply on Indian lands. Since 1990, 147 tribes have entered into 158 compacts with 24 states
(www.legislate.com/ftdir/tribes1.htm).

The compacts may include the laws (criminal and civil) and regula64 Jokers Wild tions covering the
gambling activity; the allocations of criminal jurisdictions between the state and the tribe for the
enforcement of such laws and regulations; the state’s revenue assessment necessary to defray the
regulation costs; taxation by the tribe in amounts comparable to amounts assessed by the state on
similar gambling activities; remedies for breach of contract; and the standards for the licensing,
operation, and maintenance of the gambling facility. Many tribes have complained the compact areas
infringe on their sovereignty and right to self-govern. As often happens, when the federal government
gets involved, things don’t work out as planned. Often, the states have been uncooperative, feeling that
IGRA infringes on states’ rights and further demonstrates “big brother’s” (federal government)
assumption of powers over local issues. The IGRA created a battleground where three distinct
sovereigns— federal, state, and tribal communities—renewed their centuriesold conflict.