Introduction to Tribal Casinos
Thirty U.S. states offer tribal casinos. That number is climbing. To better understand them, here are eleven things you need to know about American Indian tribal casinos.
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1. Which States Have Tribal Gaming?
I’ve reviewed tribal gaming in each state as part of my Online Resource, an ongoing weekly series. Out of 52 states, only 31 U.S. states currently have tribal casinos. Another two states have pending tribal casinos.
The states with tribal gaming along with their number of tribal casinos are: Alabama (3), Alaska (8), Arizona (25), California (66), Colorado (2), Connecticut (2), Florida (7), Idaho (7), Indiana (1), Iowa (3), Kansas (5), Louisiana (4), Maine (bingo only), Massachusetts (1 pending), Michigan (23), Minnesota (19), Mississippi (3), Montana (8), Nebraska (4), Nevada (2), New Mexico (21), New York (11), North Carolina (2), North Dakota (6), Oklahoma (more than 108), Oregon (9), South Dakota (11), Texas (2), Washington (30), Wisconsin (24), and Virginia (1 pending).
Oklahoma has the highest number of tribal casinos. In my state-by-state article on Oklahoma slots, I list the 108 largest tribal casinos. Oklahoma has many other convenience stores and truck stops which identify themselves as casinos.
With 66 sites, California has the second highest number of tribal casinos of any U.S. state. It has only tribal casinos and no non-tribal commercial casinos.
Massachusetts and Virginia both have their first tribal casino pending for various reasons, either legal issues or searching for a suitable site. Alaska and Maine have only tribal bingo halls.
2. The Indian Gaming Regulatory Act
In 1988, the U.S. Congress established the Indian Gaming Regulatory Act (IGRA). This federal law provides tribes and states with a legal framework to develop tribal gaming. It is the reason the U.S. has tribal casinos with Class III games.
American Indian cultures have always included gambling. Before the IGRA, and a driving force behind establishing it, tribes began to generate gaming revenue and profit. This tribal gaming mostly began with tribes opening bingo halls.
However, such swift growth led to abuses. When states began lobbying the U.S. Congress to regulate tribal gaming, after more than a few compromises the IRGA was born. President Ronald Reagan signed it into law on October 18, 1988.
This federal law intents to:
- Regulate tribal gaming
- Protect tribal gaming as a means of generating revenue
- Encourage economic development of the tribes
- Protect against negative influences such as organized crime
3. Why Federal Recognition Matters
The U.S. Constitution gives the federal government the right to interact with American Indian tribes. However, 1913 U.S. Supreme Court and 1988 U.S. Supreme Court decisions provided additional clarity, which also helped lead to the establishment of the IGRA.
However, what establishes that a tribal community is, in fact, an American Indian tribe? Who decides? How do they choose? Perhaps more importantly, how can this process be consistent? Even today, this decision-making is fraught with difficulties.
Federal recognition of an American Indian tribe is a process owned by the Bureau of Indian Affairs (BIA) within the U.S. Department of the Interior. The BIA sets the criteria for federal recognition of tribes. Tribal communities petition for federal recognition through the BIA’s Office of Federal Acknowledgment (OFA) which carefully researches each request for a recommendation.
Once federally recognized, the federal government acknowledges a tribe’s right of self-government while supporting its tribal sovereignty and self-determination. Limitations on these rights are the same as those for states.
There are currently 573 bands and tribes recognized by the federal government as American Indian. The last increase in the number of tribes occurred in early 2018 when six new tribes received federal recognition. Only federally recognized tribes may use the IGRA to negotiate a tribal-state gaming compact with their state.
4. Tribal-State Gaming Compacts
A compact is a negotiated agreement between two legal entities. In this case, a federally recognized tribe and the state in which it resides negotiate a tribal-state gaming compact. Once settled, the U.S. Department of the Interior must approve all compacts.
However, thanks to the IGRA, not all tribal casinos need a gaming compact. Why? Because it depends on the type of gaming offered. Or, more accurately, its classification.
The IGRA defined gaming classifications which, as a federal law, makes these commonly held definitions for all U.S. states. For more on gaming classifications, see Getting to Know Legal Gaming Classifications. In brief,
- Class I: Tribal ceremonies
- Class II: Competition-based gaming such as bingo
- Class III: Slot machines and table games
Class III tribal gaming requires a tribal-state gaming compact. Class I tribal ceremonies do not. But, Class II games may require a gaming compact, depending on the state. Tribal compacts are the result of often lengthy negotiations, after all.
The negotiations include whether non-tribal gaming exists in the state. If not, compact talks can be an uphill battle. It’s a lot more work to introduce gaming to a state.
If non-tribal gaming exists, tribes may only negotiate for those Class III games already approved by the state at non-tribal casinos. Overcoming this limitation can be lots of work. Overcoming it isn’t common.
If tribal gaming is coming to your state, and you’re wondering what kind of games you’ll find, consider what other gaming already exists in your state. That’s most likely what you’ll get.
In part, compact negotiations include a desire by the state to protect the income of existing non-tribal casinos. These can be lobbying efforts by those casinos or just protecting state income taxes from gaming revenue.
As with Virginia tribal gaming efforts, for example, out-of-state lobbying efforts have so far prevented Virginia’s first tribal casino. MGM Resorts International is making every effort to protect the gaming income of MGM National Harbor, just across the state line in Maryland.
5. Who Operates a Tribal Casino?
The owner of each tribal casino is one or more federally recognized American Indian tribe, band, or pueblo. But that’s the owner. Who operates the casino?
Sometimes, a tribe decides to let a professional casino operator run their tribal casino. There are solid business reasons to take this approach. While the casino operator takes a cut of revenue, a professionally run casino can generate quite a bit more profit to share.
For instance, Harrah’s operates both tribal casinos in North Carolina. The Eastern Band of Cherokee Indians owns both tribal casinos. But, the tribe has contracted Harrah’s, a division of Caesars Entertainment, to operate it for them.
Part of that agreement between the tribe and Caesars included allowing Harrah’s to have its name included in the name of the casinos:
- Harrah’s Cherokee in Cherokee situated 50 miles west of Ashville
- Harrah’s Cherokee Valley River in Murphy situated 109 miles southwest of Ashville
Caesars Entertainment is one of the largest casino operator conglomerates in the world, along with MGM Resorts International. For instance, they own and operate most casinos on the Las Vegas strip.
A substantial business advantage with hiring such a major casino operator isn’t just their knowledge, experience, and professionalism. These operators also have assets to share.
All casinos have a players’ reward club. It may be small or large, but they all have one. But, guests of tribal casinos operated by Harrah’s get to join the Caesars Rewards players’ club. American Indian tribal casinos operated by MGM get to join M life rewards.
A Caesars Reward club card holder gets more and more interesting complimentary gifts than a tribal casino could provide alone. Put another way, that widely available players’ club program is of value to guests at tribal casinos.
It’s a win-win scenario for both the tribe and the casino operator. With it, the tribe gains credibility and gives value to their guests. For the casino operator, it’s an inexpensive perk. Why?
Because a significant casino operator does not have to go through the expense of setting up a rewards club program. For example, there’s hardly any additional cost to adding a few thousand members through a casino or two in North Carolina. After all, their rewards program already has millions of members.
A significant casino operator need not be a non-tribal organization. Mohegan Gaming and Entertainment (MGE) is a fast-growing U.S. and international casino operator managed by the Mohegan Tribe. The eight casinos MGE operates are:
- Casino Niagara in Niagara Falls, Ontario, Canada
- Ilani in Ridgefield, Washington
- Inspire Entertainment Resort in Incheon, South Korea
- Mohegan Sun in Uncasville, Connecticut
- Mohegan Sun Pocono in Wilkes-Barre, Pennsylvania
- Paragon Casino Resort in Marksville, Louisiana
- Fallsview Casino Resort in Niagara Falls, Ontario, Canada
- Resorts Casino Hotel in Atlantic City, New Jersey
6. Don’t Cheat at a Tribal Casino
As already mentioned, federally recognized American Indian tribes have:
- The right of self-determination
- Tribal sovereignty supported by the federal government
In general, this means they have tribal laws, courts, and police. If caught cheating at a tribal casino, you would expect to go to jail. But would you expect tribal jail? Further, what are your expectations regarding tribal courts?
Robert Nersesian has written an excellent book, The Law for Gamblers: A Legal Guide to the Casino Environment. I recommend to you his excellent Chapter 8 entitled Indian Gaming: OMG, WTF. It’s a real eye-opener.
If you get in legal trouble at a tribal casino, reach out to Robert Nersesian for legal help. I fully disclose that I am an Amazon Affiliate. Meaning, using the link above means I earn a bit of income. However, Mr. Nersesian has not paid me to promote him. I just like his work.
What might happen if someone cheats at a tribal casino? Naturally, the tribal police will take you to tribal jail. If you are not a member of the tribe, you next discover you have no constitutional rights to due process or other protections.
Perhaps you leisurely read through the above section on the IGRA and the rights given to federally-recognized tribes. If you gamble at tribal casinos, maybe you should reread those a little more closely. Just sayin’.
My best advice is this: Don’t cheat at a tribal casino. Don’t even give the appearance of cheating at a tribal casino. If you do either, it won’t go well for you.
7. Tribal Use of Gaming Profits
In 1988, the U.S. Congress enacted the IGRA to support tribal economic development including:
- Tribal government operations
- Social services and financial programs
- Tribal enterprises
- Charitable causes
- Contract local government services, if desired
To understand actual use of tribal gaming profits, consider each state having a non-tribal gaming industry. How well do those states use their non-tribal gaming profits? Well, it depends on the state.
Not all states are doing particularly well with their use of non-tribal gaming revenue. Some are an excellent example to other states. Others, not so much. The care and quality of state gaming regulations, or lack of care and quality, determines their success.
There are only 56 U.S. states, territories, and the federal district, each of which is a U.S. gaming jurisdiction. In my non-legal opinion, even Utah is a U.S. gaming jurisdiction. Why? Because Utah has at least one state gaming regulation: All forms of gambling are illegal.
When it comes to using gaming profits, American Indian tribes are like U.S. states. It depends. However, there are ten times more federally recognized tribes than U.S. states.
Under the IGRA, 573 bands and tribes with federal recognition unite at a national level. This federal law is common amongst all of them in terms of supporting tribal economic development. There is no such common law for state gaming regulations.
Because of common federal law, perhaps there is more abuse among the states than across ten times as many tribes. Perhaps. The difficulty is the considerable investment needed to know the differences.
For example, it took me just over a year to write my state-by-state online resource for slots players. Each week, I wrote an article about one U.S. state, territory, or the federal district. For the complete set, it took me 56 weeks to write 56 articles.
Imagine how long it would take an individual to research and write 573 articles on each federally recognized tribe. At a rate of one piece per week, such a project would take ten years. The start of the series would be ten years out of date once completed.
However, larger organizations or federal and state governments have the resources, personnel, and funding to take on such a project. For example, the American Gaming Association (AGA) contracted an economic study of tribal gaming. See The Economic Impact of Tribal Gaming: A State-by-State Analysis from September 2017.
This 21-page report is well worth reading. It also makes several interesting observations. Here are just a few:
- Tribal gaming has grown 300x since the passing of the IGRA in 1988
- Tribal gaming generates over 44% of all U.S. gaming revenue
- Seven of the top 10 state gaming revenues include tribal gaming
8. Tribal Casinos Players Clubs
Have you identified your gambling goal as earning complimentary gifts? It’s one possible gambling goal for slot machine players. Almost entirely, players receive comps through casino rewards programs.
By necessity, a small tribal casino has a small casino rewards program. However, an American Indian tribal casino operated by a significant corporation often comes with its own players’ club. Depending on the comps you are looking to earn, either scenario has its pros and cons.
A small casino rewards program at your local tribal casino focuses on the local area. The local audience is well known. That knowledge is its strength. To them, it’s personal.
An extensive casino rewards program of a major casino operator has difficulty being personal. However, you can potentially earn travel comps from them to any of their other properties. For example, they may operate half the casinos on the Las Vegas strip.
Casino rewards programs are about establishing and maintain customer loyalty. A small casino rewards program tries to partner with other casinos, perhaps offering a bus trip across the state to a nearby casino.
A national rewards program tries to take away the competitive advantage of small rewards programs. One way to do this is to establish a team of hosts at each casino where they operate. These hosts learn what the patrons of that casino want.
Both size rewards programs do these things with somewhat limited success. Isolated reservations are where most American Indian tribal casinos are located. Being remote makes it difficult to work with other casinos as none are nearby.
On the other hand, the host of a casino operated by a major corporation can have 900 patrons they’re trying to get to know on a personal level. That’s a lot of people to get to know. These hosts take a lot of detailed notes.
Earning complimentary gifts is what happens when you play at a casino when using their rewards program card. Anyone can earn a comp, sometimes by merely signing up for the program.
But some slot machine players have identified earning complimentary gifts as their primary gambling goal. For them, it’s not about money or entertainment. It’s about earning comps, which means players need a rewards program with which they can work.
The loyalty programs at tribal casinos vary in size and what they have to offer. Bigger is not always better. If you want to earn comps, what comps do you want to receive?
At American Indian tribal casinos, the player desirability of small or large rewards programs depends on you. It depends on what you want.
Do you want a new outdoor grill? Sure, either size club will provide one if you earn it. How about earning travel comps? Well, that depends on where they can send you as well as if you care to go there. Don’t even get me started on winning a car at a casino.
9. Class II vs. Class III Tribal Gaming
The IGRA is a federal law. It defined gaming classifications for all U.S. states, territories, and the federal district. Therefore, these classifications are legal definitions. Few other legal gambling terms are standard across the U.S.
As a reminder, Class I gaming is tribal ceremonies. Class II gaming is competition-style games. Class III gaming is everything else.
If you are visiting a tribal casino, you’ll want to know in advance if they are offering Class II or Class III gaming. Why? Because it can be difficult to tell which is which when sitting down at a slot machine.
For a Class II slot machine, the spinning reels are often for entertainment purposes only. This feature means it can be difficult to distinguish from a Class III slot machine. Some tribal casinos have both types.
But does it matter if you’re playing a Class II or Class III slot machine? Here’s why it matters: the gaming regulations are different. For instance, the Class III machine might have a minimum payout return limit defined in the tribal compact. The Class II machine next to it usually doesn’t.
Another difference is more practical. Class II machines are competition-based. One way a slot machine becomes competitive is by including a gameplay decision for the player.
Another way to make a slot machine competitive doesn’t involve a gameplay decision. Instead, all the Class II slot machines on the casino floor may be playing a form of bingo. It is not at all evident if this is happening.
If you’re playing slots at American Indian tribal casinos, in my opinion, you need to know what game you’re playing. In terms of card table games, do you know how to win if you’re holding cards? No.
To win at table card games, you also need the game rules. You need to know what card game you’re playing.
The same is true with slot machines at American Indian tribal casinos. Perhaps you’re enjoying an excellent game of Class II bingo on an electronic gaming machine.
Or, maybe you have more legal protections on the Class III machine next to a bingo machine. Know that there’s a difference in ways that likely matter to you.
10. East Coast Versus West Coast
Is there a difference between American Indian tribal casinos based on where they are in the U.S.? Because the IGRA is a federal law, there are fewer differences from coast-to-coast than you might expect.
However, there’s still a substantial difference. This is history-based. Many of the tribes found in Oklahoma did not originate in that state or even that region of the country.
The ancestral home of many tribes currently federally recognized as tribal communities in Oklahoma was much nearer to the east coast of the U.S. There’s no way not to recognize that eastern tribes moved west, often forcibly. Or, through famine or otherwise, the tribes died out literally or figuratively.
Today, there are few American Indian tribes near the east coast of the U.S. Those that remain are, shall we say, durable. And, that durability includes tribal gaming.
Mohegan Gaming & Entertainment (MGE) is a significant casino operator operated by the Mohegan Tribe of Connecticut. As a demonstration of its success, MGE recently won a contract with the gaming jurisdiction crown agency of Ontario. Besides its other casino properties, MGE now operates the two Canadian casinos near Niagara Falls.
On the other hand, California has the second most casinos in the U.S. Further, California has tribal casinos only.
Near the middle of the continental U.S. is Oklahoma. Not only does it have the largest population of American Indians when compared to any other U.S. state, but it also has the highest number of casinos. Like California, Oklahoma has tribal casinos only.
11. The Future of Tribal Gaming
As of September 2017, tribal gaming revenue accounts for over 44% of all gaming revenue in the U.S. It’s grown 300x since 1988. In early 2018, six more tribes became federally recognized.
All signs seem to indicate that the future of tribal gaming is bright. Tribal casinos are opening in many states right alongside non-tribal casinos during the last few years. As I have mentioned elsewhere, it is a dynamic time of change in the U.S. gaming industry.
There’s also a bit of synergy worth mentioning regarding a sort of tension within a state’s gaming industry. The IGRA is a federal law designed to support tribes. If a state allows casino gambling and has a federally recognized tribe, the tribe will most likely attempt to negotiate a tribal-state compact.
It is nearly impossible to prevent tribal casinos if a state does not entirely prohibit gambling, perhaps by the state constitution. If bingo is legal, for example, then tribal casinos can offer Class II competition slot machines without a tribal-state compact.
The state may object. There may be court injunctions filed based on pertinent legal precedents, as Texas did for years. But, it is possible because the IGRA legally provides tribes that opportunity.
My points here are this: As non-tribal gaming grows within a state, so will tribal gaming if that state has a federally recognized tribe. And, if the tribe opens a Class II tribal casino or negotiates a Class III tribal-state compact, then non-tribal casinos will want to open.
Why? Because it’s all about market share. If tribal casinos become the go-to place for the state’s gamblers, the market can quickly become saturated. Other casinos might not survive if they try to open in a state with a mature gaming industry. Iowa is an excellent example of this scenario in action.
Summary of Tribal Casinos
Tribal gaming is involved, even sophisticated, in terms of legal, regulatory, political, and economic factors. Consequently, it is one of the least understood segments of the U.S. gaming industry.
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