Courtesy Seminole Tribe of Florida
Members of the Seminole Tribe of Florida hold a signing ceremony March 5, 2007, in Hollywood, Florida, to mark the tribe’s $965 million purchase of the Hard Rock cafes, hotels, casinos and music memorabilia.

The Great Compromise: 25th Anniversary of IGRA Is a Chance to Reflect

Gale Courey Toensing
September 27, 2013

 In the decade before Congress passed the 1988 Indian Gaming Regulatory Act, approximately 80 Indian tribes were engaged in some form of gaming, mostly bingo and card games, generating an estimated $100 million to $500 million a year in revenue. Fast forward to a recent press release from the National Indian Gaming Commission (NIGC), which reports that in 2012 more than 420 gaming establishments operated by nearly 240 tribes in 28 states generated gross gaming revenues of $27.9 billion.

That’s phenomenal growth in an industry that will mark the 25th anniversary of the Indian Gaming Regulatory Act on October 17. IGRA’s stated purpose was “to provide statutory basis for the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.” The law also aimed at protecting tribes from falling prey to organized crime.

The law established the National Indian Gaming Commission as a regulatory body. It categorized three classes of gaming. Class I includes all manner of traditional and ceremonial games and is under total tribal authority.

Class II includes games of chance such as bingo and other games that are played against other players rather than against the house or a player acting as a bank. Tribes maintain authority over Class II gaming, but they have to adopt an ordinance approved by the NIGC, which has oversight of the gaming operation.
Class III gaming includes all other forms of “casino style” gaming such as blackjack, roulette, and slots, the most profitable of all casino games and the type of gaming a tribe wants to do must be allowed in the state where the tribe is located. Class III gaming requires a tribal-state compact—a legal mechanism by which the federal law enables states to get a cut of tribal gaming profits.

Three important legal battles took place in the 1970s and 1980s leading up to IGRA. The first, Bryan v. Itasca County, was a property tax case that set the foundation for the gaming cases to follow. In June 1972, Russell and Helen Bryan, a Chippewa couple, challenged a $147.95 personal property tax bill from Itasca County in Minnesota on their trailer home on the Leech Lake Indian Reservation. The case went all the way to the U.S. Supreme Court, which issued a landmark ruling in June 1976 that states do not have authority to tax Indians on Indian reservations or to regulate Indian activities on reservations. It was a huge victory for Indian country.

By the time Bryan was won, Indian gaming was taking place in almost all regions of the country, sparked by the proliferation of state lotteries, according to the Santa Ynez Band of Chumash Indians’ report on the history of Native American gaming. “[Several] tribes in Florida and California began raising revenues by operating bingo games offering larger prizes than those allowed under state law. When the states threatened to close the operations, the tribes sued in federal court,” the report says.

In Florida, for instance, the Seminoles sued Broward County in Seminole Tribe v. Butterworth for threatening to shut down their bingo operation. In California, the state and Riverside County’s attempt to regulate the Cabazon and Morongo Bands of Mission Indians’ reservation bingo games resulted in California v. Cabazon Band of Mission Indians. In both the Seminole and Cabazon cases, the courts ruled that Indian tribes could conduct whatever level of gaming was allowed within the state free of all state control. Cabazon was an enormous victory for tribal sovereignty and self-determination. That’s why it didn’t stand for very long. IGRA was a way to limit the freedom of Indian nations that Cabazon affirmed—and states lobbied long and hard for it.

In a House debate in September 1988, on S. 555—the Senate version of the Indian Gaming Regulatory Act that would be signed into law on October 17, 1988—Representative Morris Udall (D-Arizona) talked about the “compromise” in the law. “I stated [on July 6] that I could not support the unilateral imposition of state jurisdiction over Indian tribal governments,” Udall said. “I did state, however, that I remained open to reasonable compromise on the issue. S. 555 is such a compromise.… It is a solution that is minimally acceptable to me, and I support its enactment. The core of the compromise…is that Class III gaming activities…will hereafter be legal on Indian reservations only if conducted under a compact between the tribe and the state.”

So, while some casino tribes have become spectacularly wealthy under IGRA, most Indian leaders agree that the act imposed a jurisdictional framework of restriction that allowed federal and state encroachments on what had been unrestrained tribal jurisdiction on gaming in Indian country. IGRA’s 25th anniversary, it turns out, is worth recognizing, but not everyone thinks it’s worth celebrating.

The Seminole Hard Rock Hotel and Casino in Hollywood, Florida, erected in 2007. (Courtesy Seminole Tribe)

“Rather than look back at what we could have or what we should have done, I’m just like my grandma—I say we’ve got to look forward,” Ernie Stevens Jr., the chairman and national spokesman of the National Indian Gaming Association, told Indian Country Today Media Network. “But if I do look backwards, I see that the bottom line is our teachers and our elders, most of whom have gone on, didn’t appreciate where that law went. It restricted our sovereignty, so there are a lot of things that we would have changed. I don’t celebrate IGRA—I celebrate what the leadership did to champion that reduced sovereignty and make the best of their conditions. They’re the ones that have made Indian gaming the success it is.”

Eric Eberhard, distinguished Indian Law Practitioner-in-Residence at the Law School at Seattle University and former partner in the Seattle office of Dorsey & Whitney LLP, echoed Stevens. The tribes have always made the best out of IGRA, he said:

“Most, if not all, tribes would have preferred to live with the Cabazon decision and leave things at that. However, once IGRA was enacted, tribes went to work to make it work as well as possible and have largely succeeded in doing so. The success of tribal governmental gaming is attributable to the hard work and skill the tribes have brought to bear on the implementation of IGRA, including the integrity of the gaming operations conducted at tribal facilities.”

Anthony Broadman, of the legal firm Galanda Broadman, sees IGRA as a platform for Indian country to flex its economic muscle rather than as a limitation. “Just look at the successes and the corollary development that gaming has spawned. But like sovereignty in general, IGRA is a muscle. It has to be flexed or it will atrophy,” Broadman said. “Like all the other gains tribes have had to fight for—gaming, land, self-determination—the vitality of tribal gaming will have to fought for, defended.”

Katherine Spilde Contreras, chair of the Sycuan Institute on Tribal Gaming at San Diego State University, said the test of whether IGRA is working is to revisit its original purpose of strengthening tribal governments and tribal economic development. “When Congress passed the IGRA, it was not possible to predict the profound socioeconomic and cultural changes that would occur on and near American Indian reservations in the United States due to gaming on tribal lands,” Spilde said. “Tribal governments have invested gaming revenues wisely and continue to grow out of poverty while making substantial capital investments in tribal communities as well. By now, it is clear to those both in and outside of Indian country that the two major policy mandates of IGRA have been achieved.”

Asked what challenges face Indian gaming in the future, Eberhard, Broadman and Spilde agreed: Internet gaming. “But it’s one the tribes can manage effectively so long as the statutory framework for Internet gaming recognizes the role of tribes in the federal system and their inherent authority to both engage in gaming and to have the primary regulatory authority over gaming,” Eberhard said. “Tribes have demonstrated the capacity to effectively regulate all forms of gaming. Any new federal laws intended to regulate Internet gaming should be based on respect for tribal authority and the demonstrated success tribes have had as the primary regulators of tribal governmental gaming activities.”

But the tribal governments need to be proactive, Broadman said. “If tribal governments wait for ‘gifts’ in Internet gaming or urban gaming, they won’t come. Like everything that has been sustainable for economic development in Indian country, new gaming opportunities have to be fought for by tribes. Tribes are quite reasonably focusing on urban markets and will need to attack Internet gaming to stay ahead of stagnation. These two areas are already causing conflict and will continue to do so.”

In addition to online gaming, tribes face challenges from the expansion of gaming into new jurisdictions, including Massachusetts, Ohio, Pennsylvania and Maryland and more competition within their states as tribes successfully take land into trust for gaming purposes, Spilde said. “Tribes are remarkably resilient, but these competitive forces will require increased efficiencies to retain current revenues. While the recession of 2007–2008 saw Indian gaming revenue growth stall, we saw Indian gaming continue to provide essential revenues necessary to insulate tribal communities from significant losses. Regardless of outside conditions, we see that tribal gaming continues to be both a consequence of tribal self-determination and a support for it.”

Attorney Judy Shapiro, who has practiced Indian law for nearly three decades, pointed out IGRA’s limitations. “IGRA has been an enormous benefit for many tribes, but the benefit is not equally distributed. There’s a small number of very, very successful tribes and a much larger number for whom gaming means jobs and a lesser level of poverty, and many tribes don’t have casinos at all,” she said. “The problem is people see the successful tribes and think there are no more problems in Indian country. We have to understand that IGRA is not a solution for all the unmet needs of Indian country. We can’t let the story of a few successful tribes be a diversion from the continuing responsibility to tribes that still face the chasm between needs and funding.”