Getting to Know Legal Gaming Classifications

Introduction to Gaming Classifications

Accepted legal gaming classifications are available to state gaming boards to restrict which class of slot machines can be used in a casino or other gaming area, specifically Class I thru III, i.e., Class 1, Class 2, or Class 3 gaming.

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Indian Gaming Regulatory Act (IGRA)

The first federal gaming structure for Indian gaming was established in 1988 with the Indian Gaming Regulatory Act, enacted as a U.S. federal law. The stated purposes of the Act include:

• Providing a legislative basis for the operation/regulation of Indian gaming
• Protecting gaming as a means of generating revenue for the tribes
• Encouraging economic development of these tribes
• Protecting the enterprises from negative influences, such as organized crime

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The Act establishes three classes of games with a different regulatory scheme for each:

• Class I (Class 1)
• Class II (Class 2)
• Class III (Class 3)

Class I Gaming

Class I gaming is defined as

1. Traditional Indian gaming as part of tribal ceremonies and celebrations
2. Social gaming for minimal prizes

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Regulatory authority over this class of gaming falls to Tribal governments and is not otherwise subject to IGRA’s requirements.

Class II Gaming

Class II gaming is defined as the game of chance known as bingo, aided or not aided by any electronics, and other skill-based games if played at the same location. It also applies to games played exclusively against another player rather than against the house or a player acting as a bank. Tribal governments are the primary legal entity responsible for regulating Class II games on its lands, as long as

• The state in which the Tribe has located permits such gaming for any purpose
• The Tribal government adopts a gaming ordinance approved by the National Indian Gaming Commission

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Tribal governments are responsible for regulating class II gaming with Commission oversight. The Act specifically excludes slot machines or electronic facsimiles of any game of chance from the definition of class II games.

Class III Gaming

Class III gaming is generally referred to as casino-style gaming. It has a broad definition and includes all forms of gaming not specifically called out as Class I or II. Games commonly played at casinos clearly fall into the Class III category, including

• slot machines
• blackjack
• craps
• roulette
• wagering games
• electronic facsimiles of any game of chance

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As restricted by the IGRA, before a Tribe can lawfully conduct Class III gaming, these conditions must be met:

• The Class III games the Tribe wants to conduct must be permitted in the state the Tribe is located.
• The Tribe and state must have negotiated a compact approved by the Secretary of the Interior, or the Secretary must have approved regulatory procedures, a so-called Tribal-State Compact.
• The Tribe must have adopted a Tribal gaming ordinance approved by the Chairman of the Commission.

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The regulatory scheme for Class III gaming is complex, with key functions for approval authority resting with several organizations at the federal, state, Commission, and Tribal levels.

Summary of Legal Gaming Classifications

Accepted legal gaming classifications are available to state gaming boards to restrict which class of slot machines can be used in a casino or other gaming area.

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