Indian Gaming in South Dakota: Conflict in Public Policy

Legal gaming on Indian reservations has increased dramatically since the 1987 landmark decision by the United States Supreme Court in California v. Cabazon Band of Mission Indians.¹ In this case the Supreme Court upheld by a 6–3 vote the right under federal law for Indians to run gambling operations without state regulation in states where such gaming was legal for any purpose. At the time of California v. Cabazon only five states prohibited all forms of gaming. This decision opened the door to significant expansion of Indian gaming across the United States. By 1988 more than 100 tribes were engaged in bingo, with estimated collective revenues of $100 million.²

It should not be surprising that, given this success, several tribes wanted to move beyond bingo to card games and slot machines. At the time Congress was generally favorable to the expansion of Indian gaming to improve deplorable economic conditions on the reservations. In 1989 the median family income on reservations was $13,489, a figure 2.5 times below the $34,213 average for the remainder of the country. Further evidence of severe economic and social problems included a poverty rate of 47.3% compared to a national average of 11.5%, a rate of alcoholism 663% higher than the national average, and a suicide rate 95% above the national average.³

Following the Cabazon decision, various states and the Nevada gaming interests strongly encouraged Congress to take legislative action to limit and regulate Indian gaming.⁴ In 1988, after a major legislative battle between Indian tribes, states, and the non-Indian gaming industry, Congress passed the Indian Gaming Regulatory Act (IGRA). The goals of Congress with the passage of this act were to (1) promote self-sufficiency for the tribes; (2) ensure that Indians were the primary beneficiaries of gambling; (3) establish fair and honest gaming; (4) prevent organized crime and other corruption by providing a statutory basis for its regulation; and (5) establish standards for the National Indian Gaming Commission.⁵ In effect, this act extended to tribal governments of each state the right to conduct whatever types of gaming anyone else in the state was permitted to conduct. Specifically, the IGRA in section 2701(5) provides tribes with

the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity.⁶

Under the provisions of the IGRA types of games are defined in section 2703. Class I games are social games with minimal prizes or traditional forms of Indian gaming. Class II games include bingo and related games and card games that are explicitly authorized by the state or are not explicitly prohibited by the state and are played in conformity with those laws and regulations of the state regarding hours or periods of operation of such card games or limitations on wagers or pot sizes in such card games. Class III gaming is everything else, including banking card games such as blackjack, slot machines, and table games such as roulette and craps.

Class I games are under the exclusive jurisdiction of the Indian tribes and are not subject to the regulatory provisions of the IGRA (see section 2710[a][1]). Class II gaming is only subject to tribal jurisdiction but may be regulated in accordance with section 2710(b) as follows:

(1) An Indian tribe may engage in, or license and regulate, class II gaming on Indian lands within such tribe's jurisdiction, if—

1. A. such Indian gaming is located within a state that permits such gaming for any purpose by any person, organization or entity (and such gaming is not otherwise specifically prohibited on Indian lands by Federal law), and

2. B. the governing body of the Indian tribe adopts an ordinance or resolution [concerning the conduct or regulation of class II gaming].

Section 2719(d) sets out the requirements for class III gaming as follows:

(1) Class III gaming activities shall be...