THE INDIAN GAMING REGULATORY ACT (IGRA)

The Indian Gaming Regulatory Act (IGRA) was enacted by Congress in 1988 to provide a legal basis for the operation and regulation of gaming by Indian tribes. Opponents to Indian gaming pushed for the Act when tribes began winning cases allowing gaming in Indian country.

Gaming in Indian country began to grow in 1980, when the Seminole Tribe of Florida won a suit against the sheriff of Broward County. A Florida court ruled that Congress did not confer authority on the states to regulate activities on Indian lands. since the Sta of Florida permitted and regulated bingo, it could not regulate or limit bingo to any extent on Seminole land.

In 1987, the United States Supreme Court affirmed the ruling of the Florida court in the Seminole case in California v. Cabazon Band of Mission Indians.

In essence, those cases found that an earlier act, P.L. 83-280 (see glossary), did not give state authority to regulate gaming on Indian lands. With the industry booming, regulatory legislation was deemed by competitors, opponents and others to be necessary. The Indian Gaming Regulatory Act was that legislation.

The legal theory supporting the right of Indian tribes to conduct gaming developed from a case that involved state taxes on Indians. The controversy in that case, "Bryan v. Itasca County," decided by the United States Supreme Court in 1976, erupted over the meaning of an act of Congress (known as Public Law 83-280) which granted civil and criminal jurisdiction over Indian reservations to several states, among which were Minnesota, Florida and California.

The question raised in the "Bryan" case was whether jurisdiction conferred on Minnesota was:

	(a) to resolve controversies arising on the reservation - for example, a suit by A against B for damages in a personal injury claim -- or
	(b) to apply its personal property laws to Indian property on the reservation. The imposition of tax laws is classified under the law as regulatory by nature; so, the question, in effect, was whether the state's regulatory laws generally applied to the Indians.

The United States Supreme Court ruled that the only authority Minnesota was granted by P.L. 83-280 was to resolve disputes arising on the reservation, that involved Indians and did not grant authority to the state to apply its regulatory laws.

The next case in the development of Indian gaming was "Seminole Tribe of Florida v. Butterworth" (1 981) in federal court. The question in the case was whether Florida's time, pot and prize limitations on the play of bingo could be applied to the tribe's bingo operation under the grant of criminal jurisdiction under Public Law 83-280. Florida's law imposed a criminal penalty. The question in this case was whether Florida's statute was regulatory even though it imposed a penal sanction. The state's argument was the P.L. 83-280 granted criminal jurisdiction and the bingo statute imposed a criminal penalty so the state had jurisdiction. The court's analysis, critical to the outcome, said that imposition of a criminal penalty did not necessarily make a regulatory law a criminal law, thus focusing on whether or not the public policy was to criminally prohibit bingo, or to permit bingo and regulate it. The court ruled that Florida's statute was regulatory. According to "Bryan," Florida was not granted jurisdiction to regulate bingo on the reservation. The Supreme Court declined to review that decision.

Finally, However, the United States Supreme Court accepted for review a case called "California v. Cabazon Band of Mission Indians" (1 987) and, upon review, essentially adopted the theory in the Butterworth case -- "that California regulates rather than prohibits gambling in general and bingo, draw poker and other card games.

In the year following Cabazon, Congress enacted the Indian Gaming Regulatory Act.

Tribal sovereignty means that tribes, as the United States Supreme Court has observed, "have a right to make their own laws and be governed by them." Tribes have power to enact laws, just as states, do, that may cover a wide variety of matters.

Tribes' sovereignty derives from and is a continuation of their status, which existed prior to the creation of the United States. Since tribes have come under the dominion of the United States, they retain all the power of a sovereign nation except: the right to make war, the right to make a treaty with a foreign nation, the right to sell their lands without approval of the Congress of the United States and the right to exercise criminal jurisdiction over non-Indians. They retain all other powers, but are subject to the power of Congress.

Tribes have higher status than state, one court has noted, because they are not subject to the restriction in the Bill of Rights. However, Congress possesses the power to enact laws and make tribes subject to those laws. Some laws relevant to gaming are, of course, the Indian Gaming Regulatory Act and the Indian Civil Rights Act. (modeled after the Bill of Rights in the U.S. Constitution), to name two.

DO INDIANS PAY TAXES?

Yes. Individual Indians pay all federal taxes except those that derive from lands held in trust for them by the United States. Tribes, being unique entities under the law, are not taxed for tribal revenues, just as states are not subject to taxes for state governmental revenue.

Individual Indians do not pay state taxes for income earned in instances when they both reside and work on a reservation and drive income from that work. Individual Indians are subject to any tribal tax laws that might be in effect.

WHAT IS THE INDIAN GAMING REGULATORY ACT?

The Indian Gaming Regulatory Act (IGRA) is an act of Congress that regulates gaming conducted by Indian tribes. It comprehensively covers the field of Indian gaming by stating what types of gaming can be conducted, where, and how and by whom.

IGRA created three classes of gaming: Class I -- traditional forms of gaming subject only to tribal regulation; Class 11 -- bingo and similar games subject to regulation by tribes and by the National Indian Gaming Commission; and Class III -- which includes all gaming not specified in Class I or Class 11, and is regulated under a compact between the operating tube and the state in which the gaming enterprise is located.

IGRA provides authorization and procedure for negotiation and entry into a "compact" (agreement) between a tube and a state for the conduct of Class III gaming.

MANAGEMENT CONTRACTS

 Any contract for the operation and management of a Class 11 gaming activity must meet certain requirements established by the Indian Gaming Regulatory Act. those requirements have been implemented by recently issued regulations, which will be administered by the National Indian Gaming Commission (NIGC).

A principal feature of those rules is the requirement that rigorous background checks be conducted to detect past criminal activity. Applications for management contract require:

	a) pertinent background information on each person or entity having a direct financial interest in, or management responsibility for, such contract, and in the case of a corporation, those individuals who serve on the board of directors of such corporation and each of its stock holders who hold (directly or indirectly) 1 0 percent or more of its issued and outstanding stock.
	b) a description of any previous experience that each person listed has had with other gaming contracts with Indian tribes or with the gaming industry generally, including specifically the name and address of any licensing or regulatory agency with which such person has had a contract relating to gaming; and
	c)  complete financial statement of each person listed in paragraph (a).

In addition, the NIGC Chairman may ask the applicant any additional questions deemed necessary. Adequate accounting procedures, daily access to record by appropriate tribal officials, minimum guaranteed payment and an agreed-upon ceiling for repayment of development costs are also required.

Management contracts may not exceed five years, unless the tube request up to seven years for repayment due to the capital investment required. Once contracts expires, the tribe and management company may apply for an extension.

A management contract will be disapproved if the applicant has been or subsequently is convicted of any felony, misdemeanor or gaming offense.

 25CFR Parts 531, 533, 535 and 539

 Congress created three classes of gaming: Class I - traditional Indian gaming; Class 1.1 bingo and related games; and Class III - all gaming not Classes I and II. Class III gaming includes all casino-style games, pari-mutual wagering, lotteries and video terminal games. Under IGRA, tribes were permitted to conduct Class II and Class III gaming where the state permits such gaming.

Class II is regulated by the tribe and the National Indian Gaming Commission. Class III is permitted upon approval of a compact negotiated and entered into between a tribe and a state. It is regulated in accordance with the provisions of that compact.

To carry out IGRA policies, Congress established a National Indian Gaming Commission with rule-making and regulatory powers. Congress declared the policy of IGRA to be as follows:

	(1) to provide a statutory basis for the operation of gaming by Indian tribes as a means of promoting Indian economic development, self-sufficiency and strong tribal governments;
	(2) to provide a statutory basis for the regulation of gaming by an Indian tribe adequate to shield it from organized crime and other corrupting influences, to ensure that the Indian tribe is the primary beneficiary of the gaming operation, and to assure that gaming is conducted fairly and honestly by both the operator and players; and
	(3) to declare that the establishment of independent Federal regulatory authority for gaming on Indian lands, the establishment of Federal standards for gaming on Indian lands, and the establishment of a National Indian Gaming Commission are necessary to meet congressional concerns regarding gaming and to protect such gaming as a means of generating tribal revenue.

Major controversies have developed over the meaning and effect of IGRA in two separate areas. The first relates to the extent of technology is permitted in the conduct of Class 11 gaming.

WHAT IS A COMPACT?

A compact may also include provisions that (a) designate what tribal or state civil and criminal laws will apply, (b) designate which sovereign, tribe or state, will have civil and/or criminal jurisdiction, (c) provide for costs of regulation, (d) establish standards for operation of the gaming facility, and (e) licensing requirements for persons engaged in tribal gaming.

Procedure for entering into a compact is initiated by a request from the tribe to the governor of a state. If the state responds within the time established by IGRA and the parties successfully negotiate a compact, that compact is submitted to the Secretary of the Interior. If the secretary determines that the compact meets the requirements of IGRA, it is approved and published. If the state fails to "negotiate in good faith," IGRA provides a series of steps in the litigation process that are designed to end in either a compact or procedures established by the Secretary of the Interior for Class III gaming by the tribe.

TRIBAL - STATE COMPACTS

12 STATES/ 43 TRIBES/ 55 COMPACTS

ARIZONA

Cocopah Tribe 

Compact approved 7/28/91-; published 8/24/92 Gaming Devices/Lottery/Off-track Pari-Mutual Wagering/Horse Racing

Yavapai-Prescott Tribe

Compact approved 7/15/92; published 7/21/92 Gaming Devices/I-ottery/Off-track Pari-Mutuel Wagering/Horse Racing

CALIFORNIA

CONNECTICUT

Mashantuket Pequot Tribe

Compact - Video Games of Chance approved 3/27/90; published 4/0'-?/90  Compact - Blackjack approved 9/25/91; published 10/03/91

Grand Portage Band of Minnesota Chippewa

Compact - Video Games of Chance approved 11/16/90; amended 4/12/91; published 4/30/91 Compact - Blackjack approved 9/25/91; published 10/03/91

White Earth Band of Minnesota Chippewa

Compact - Video Games of Chance approved 11/08/91; published 11/13/91 Compact - Blackjack approved 9/25/91; published 10/03/91

MONTANA

Compact approved 6/24/92; published 6/30/92 Video Machines for Keno, Poker, and Bingo/Simulcast Racing

Omaha Tribe of Nebraska

Compact approved 12/31/90; published 1/08/91 Keno/Lottery Ticket Drawings/Big Six/Big Nine/Card Wheel/Color Wheel/Fruit Wheel/Horse Race Wheel/Money Wheel/Roulette/Chuck-A-Luck/Sic Bo

Compact - Slot Machines approved 3/25/91; published 4/01/91 Compact - Video Lottery approved 11/26/91; published 12/04/91

The Golden Hill Indian Tribe

INDIAN GAMING TIMELINE

1953 Congress enacted Public Law 83-280 (see glossary) conferring civil and criminal jurisdiction on five states over the tribes within those states. 1953 Congress enacted Public Law 83-280 (see glossary) conferring civil and criminal jurisdiction on five states over the tribes within those states.

1976 The Supreme Court in Bryan u. Itasca County ruled that states have criminal and civil jurisdiction over Indian tribes.

1979 In Seminole Tribe v. Butterworth, a Florida court applied the Bryan decision to Florida's bingo laws. The court determined that the state could not prohibit Indian bingo because it did not have regulatory power over the Tribe.

1991-1992 An 11th Amendment defense was raised by eight states in cases brought by tribes for failure of those state to bargain for Class 11 compacts "in good faith."

1992 The National Indian Gaming Commission issued a final rule defining the terms in the Indian Gaming Regulatory Act.

1992 Seven tribes sued, the National Indian Gaming Commission, in federal district court in Washington, D.C. challenging the newly issued regulations regarding the use of technology in Class II gaining.