In the 1980s, when the federal government severely cut funds for Indian tribes, Indian tribes began to turn to high-stakes bingo and other gaming to raise money to fund tribal government operations. Meanwhile, a number of bills were introduced in Congress to regulate the growing Indian gaming industry. In 1987, in California v. Cabazon Band of Mission Indians , the Supreme Court settled that Indian tribes could engage in gaming on tribal land free from state law. The Court held that federal and tribal interests supporting tribal gaming preempted state laws regulating tribal gaming on tribal land. IGRA provides a statutory basis for Indian tribes to conduct gaming on "Indian lands"; establishes a framework for regulating Indian gaming that divides authority between tribes, states, and the federal government; and created the National Indian Gaming Commission (NIGC) with authority to regulate tribal gaming on the federal level. For the purposes of regulation, IGRA divided Indian gaming into three classes: class I gaming includes social or traditional gaming played for prizes of minimal value and is subject to exclusive tribal regulation; class II gaming includes bingo and similar games and non-banked card games, and is subject to regulation by the tribes and NIGC, and may be conducted only in states that allow such gaming; and, class III gaming includes all other games and may be conducted only pursuant to tribal-state compacts approved by the Secretary of the Interior (Secretary) in states that allow such gaming or pursuant to procedures approved by the Secretary under circumstances specified by IGRA. IGRA also created the NIGC. Class III gaming is the most lucrative class of gaming, and a tribal-state compact is the key to a tribe's ability to engage in class III gaming. However, in Seminole Tribe of Florida v. Florida , the Supreme Court held that Congress did not have authority under the Indian Commerce Clause to waive the states' sovereign immunity to lawsuits by tribes to enforce the requirement that states negotiate class III gaming compacts in good faith. The first exception, referred to as the "two part determination," allows gaming on trust land acquired after October 17, 1988, if the Secretary, after consulting with the tribe and appropriate state and local officials, "determines that a gaming establishment on the newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary's determination." A tribe seeking to engage in class III gaming must request the state in which the Indian lands are located to negotiate a class III gaming compact. In order to make sure that states negotiate in good faith, IGRA gave jurisdiction to federal district courts over "any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations with the Indian tribe for the purpose of entering into a Tribal-State compact ... or to conduct such negotiations in good faith." IGRA practically guaranteed that tribes would be able to engage in Class III gaming even over the objections of a state by providing that tribes could sue states in federal district court. Such revenue sharing appears to violate IGRA's prohibition on state taxation of Indian gaming. H.R. 4033 , the Giving Local Communities a Voice in Tribal Gaming Act, has been introduced. This bill would amend IGRA to give local jurisdictions a veto over class III gaming establishments to which the state has agreed in compacts entered after January 1, 2011. IGRA created an incentive for states to negotiate gaming compacts by providing that tribes could take states that did not negotiate in good faith to federal court. In the past five years, several bills have been introduced which would amend IGRA to limit the ability of tribes to game on newly acquired lands.
In the 1980s, a number of Indian tribes developed high-stakes bingo and other gaming operations to raise non-federal revenue to fund their governments. In 1988, after the Supreme Court held, in California v. Cabazon Band of Mission Indians, that federal and tribal interests in Indian gaming preempted state law such that state regulation of gaming did not apply to tribal gaming operations on tribal land, Congress passed the Indian Gaming Regulatory Act (IGRA). IGRA provides a statutory basis for Indian tribes to conduct gaming on "Indian lands" and establishes a regime for regulating Indian gaming. It prohibits gaming on newly acquired land—that is, land acquired in trust after October 17, 1988—subject to two exceptions: the "two part determination"; and, land taken in trust as part of a land settlement, restoration of land for a restored tribe, or the initial reservation of a newly acknowledged tribe. In establishing a framework for regulating Indian gaming, IGRA was intended to balance the interests of the tribes, the states, and the federal government in Indian gaming and apportion responsibility for regulating it accordingly. To do this, IGRA divides Indian gaming into three classes: class I includes traditional or social gaming and is subject to exclusive tribal regulation; class II covers bingo and similar games and is subject to tribal regulation and oversight by the National Indian Gaming Commission (NIGC); and, class III includes all other gaming, including casino gaming or Las Vegas-style gaming, and generally can only be conducted pursuant to tribal-state compacts that must be approved by the Secretary of the Interior. IGRA also created the NIGC to provide regulation of Indian gaming on the federal level.
The tribal-state compact is the key to tribal casino gaming. Recognizing that some states might simply stonewall tribes and refuse to negotiate class III gaming compacts, Congress required that upon a request from a tribe to negotiate a compact, a state must negotiate in good faith. In order to create an incentive for states to negotiate in good faith, IGRA provided that tribes could sue states in federal district court for failing to negotiate in good faith. IGRA prescribes a series of steps to ensure that ultimately a tribe would be able to engage in class III gaming even over the state's objections. However, in Seminole Tribe of Florida v. Florida, the Supreme Court held that Congress did not have authority under the Indian Commerce Clause to waive the states' sovereign immunity to suits by tribes to enforce the good faith negotiation requirement. This decision, therefore, removed IGRA's practical guarantee that tribes would be able to engage in class III gaming over the objections of the state and gave states a veto over tribal class III gaming—a state can simply refuse to negotiate a class III compact to deny a tribe the ability to engage in class III gaming. Increasingly, states have demanded significant revenue sharing and non-gaming concessions in exchange for class III compacts.
In the last five years, there have been several bills introduced in Congress to amend IGRA, primarily to restrict off-reservation gaming. Two bills have been introduced in the 112th Congress to amend IGRA. H.R. 4033, the Giving Local Communities a Voice in Tribal Gaming Act, would give local jurisdictions the right to veto a class III gaming operation that the state has agreed to in a compact. S. 771, the Tribal Gaming Eligibility Act, would restrict the availability of off-reservation land for gaming by requiring that tribes demonstrate, by meeting certain criteria, that they have modern and historical ties to the land on which they propose to game.