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  • The Growth of the Native American Gaming Industry:What Has the Past Provided, and What Does the Future Hold?
  • James I. Schaap (bio)

What can we say about the phenomenal growth of the Native American gaming industry? In order to evaluate the industry's development we first need to consider its economic, social, and political history. Then, building on this foundation, it will be possible to predict, strictly from an observational perspective, what the future may hold for Native Americans.

Since 1832 the U.S. Supreme Court has upheld the right of Native American tribes to self-rule, allowing them to control everything from fishing, hunting, and mineral rights to the establishment of gaming casinos. In the 1960s no states ran lotteries, and only one, Nevada, allowed casinos. The Indian tribes had yet to discover the potential of gaming, from bingo to glitzy casinos.1 Beginning in the late 1970s, however, a number of Indian tribes established bingo operations in order to raise revenues to fund tribal governments. In 1987, in California v. Cabazon Band of Mission Indians, the U.S. Supreme Court upheld one of the most significant turning points for tribal governments: the legal right of Native American tribes to offer gaming on reservation lands, free of state interference.2 Essentially, the band argued that its status as a sovereign government prevented state interference in its affairs.

The Cabazon Band is a small tribe with reservation lands near Palm Springs, California. In the mid-1980s, like a number of tribes across the United States, the band ran a modest bingo parlor and a poker room on its reservation. When California state officials threatened to close down its gaming, the band sued the state, and the case made it all the way to the U.S. Supreme Court. The Supreme Court held that because California permitted gambling and even encouraged it through the state's lottery, [End Page 365] its law regulated rather than prohibited gambling. Accordingly, the state could not enforce its gambling laws in order to regulate the tribe's gaming operations. This verdict kicked the door to Indian gaming wide open.3

In an effort to provide a regulatory framework for Indian gaming Congress passed the Indian Gaming Regulatory Act (IGRA) in 1988. IGRA provides a statutory basis for the regulation of Native American gaming, specifying several mechanisms and procedures and requiring that all the revenues from gaming activities be used to promote the economic development and welfare of these tribes. For casino gaming, which IGRA terms Class III gaming, the legislation requires tribes to negotiate a compact with their respective states, a provision that has been a continuing source of controversy between the tribes and state and local governments.4

Definition of Native American Gaming

While this review embodies a general inquiry about the growth of the Native American gaming industry and possibilities the future may hold for America's indigenous people and is not necessarily an exhaustive scholarly research project, I still believe it is helpful to provide here a general definition of tribal gaming.

Tribal gaming is different from other forms of gaming. It is conducted by Native American governments as a way to carry out their natural self-governing rights as independent nations. As such, there are three formal classes of gaming:

  • • Class I gaming includes social games for prizes of minimal value and traditional forms of tribal gaming as a part of or in connection with tribal ceremonies or celebrations (e.g., contests and games of skill). Because no money is exchanged here, Class I gaming is regulated solely by the tribes.

  • • Class II gaming includes bingo, other games similar to bingo (e.g., pull-tabs, lotto, punch boards, tip jars, instant bingo) if conducted at the same location, and certain non-house-banked card games allowed in a state (i.e., poker). (Nonbanking refers to poker and other card games in which players bet against each other rather than against the house.) The use of technological aids in conducting such games is permitted. Subject to certain conditions set forth [End Page 366] in IGRA and some oversight by the National Indian Gaming Commission, Class II gaming is also regulated by...


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