A History of Native American Casinos

By Jane Shaw Senior Editor Updated: 12/18/2023

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We count on Jane to inform our readers about the latest slot games in the US market. With her passion for video games and a degree in engineering, she’s our gambling tech expert. Jane’s also active in our blog section, where she tackles the curiosities and changes in the industry.

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History of Native American Casinos

• Casinos and Reservations
• Casinos in Reservations: Where it All Began
• The Impact of Seminole Tribe v. Butterworth
• The Importance Of IGRA
• The Future of Tribal Gaming and IGRA’s Role
• Frequently Asked Questions

The history of Native American casinos in the U.S. is a captivating tale of resilience, cultural preservation, and economic transformation. This journey, rooted in centuries-old traditions and modern legal battles, has brought up a huge range of fascinating factors, including sovereignty, entrepreneurship, and community development.

In today’s blog, we’ll look at the history of Native American casinos – including the first Native American casino, what legal issues they’ve faced – and what changes they’ve made to the land-based casino industry.

Casinos and Indian Reservations

Native American casinos have a rich history that intertwines with the broader story of Native American rights and sovereignty in the United States. Initially, these casinos emerged as a means for tribes to generate revenue and assert their sovereign rights. However, it wasn’t until the Indian Gaming Regulatory Act of 1988 was brought in that these land-based casinos had legal recognition.

This legislation opened the doors for significant economic development on reservations, which often struggled with high poverty and unemployment rates. The next decade saw hundreds of Native American land-based casinos opening their doors.

While most tribes have faced legal and political hurdles over casinos and Indian reservations, including disputes over jurisdictions, today, Native American casinos have established themselves as key players in the U.S. gaming industry, contributing billions to the economy and playing a pivotal role in the welfare of many Native American communities.

While you’re here, if you’re looking for the best online slots, make sure you check out our online gambling guides! Before we begin, here’s a brief summary of the milestones we’ll look at in today’s page on casinos and Indian reservations:

Casinos in Indian Reservations: Where it All Began

The first Native American casino marked a pivotal moment in the history of tribal gaming. It started with the Seminole Tribe in Florida. In 1979, they opened the doors to the first high-stakes bingo hall on tribal land. However, what really made this a notable development was the fact that this wasn’t just regular bingo; unlike the bingo games you might find at a local church, this one operated beyond the standard $100 limit – which was common in Florida at that time.

This move was a bold step, challenging the existing legal framework. You see, Florida law capped bingo jackpots at $100, and games were limited to two days a week. The Seminole Tribe, however, opened their hall seven days a week with much higher stakes.

Their argument was straightforward: as a sovereign nation, the tribe could set its own rules on tribal land. For many, this was about a lot more than just opening bingo rooms and casinos in reservations; the tribes wanted to prove their independence and self-determination – and many experts speculate they wanted the legal challenges that followed.

The state of Florida, unsurprisingly, wasn’t on board with the idea – and they tried to shut down the operation, leading to a legal battle that would reshape the future of tribal gaming. The case, Seminole Tribe v. Butterworth, went to court – and, in 1981, a federal judge ruled in favor of the Seminole Tribe, noting their sovereign rights. This decision was historic and paved the way for the future of casinos in reservations.

For example, following in the Seminole Tribe’s footsteps, many other tribes started exploring gaming as a means of economic development. This growth in tribal gaming eventually led to the Indian Gaming Regulatory Act (IGRA) of 1988, details of which we’ll talk more about later.

The Impact of Seminole Tribe v. Butterworth

In the years following the establishment of the first Native American casino by the Seminole Tribe in 1979, the landscape of tribal gaming underwent significant transformations. This shift was not just in terms of economic growth but also in the legal and political arenas.

After the Seminole Tribe’s success in Florida, other tribes began to recognize the potential of gaming as a tool for economic development. Tribal casinos started sprouting up across the United States. The early 1980s saw a surge in these establishments, each asserting their sovereignty and right to operate gaming facilities. This growth, however, wasn’t without challenges. Many states were concerned about the regulation of these casinos and their potential impact on state gaming revenues.

The pivotal moment came in 1987 with the U.S. Supreme Court’s decision in California v. Cabazon Band of Mission Indians. The Court held that states have no regulatory authority over gaming activities on Indian reservations if the gaming is permitted outside the reservation for any purpose. This decision effectively opened the floodgates for the expansion of tribal gaming.

Tribal casinos became more sophisticated and larger in size, transforming from modest bingo halls to full-scale resorts with hotels, entertainment venues, and diverse gaming options. This growth wasn’t just beneficial economically. It also led to a resurgence in tribal culture and identity. Profits from gaming were reinvested in education, language revival programs, and cultural preservation projects.

However, the rapid expansion of tribal gaming also led to internal and external conflicts. Some tribes faced issues with the distribution of gaming revenues among their members. Externally, there were disputes with local communities and states over regulatory issues and the impact of casinos on surrounding areas.

The Importance Of IGRA

The Indian Gaming Regulatory Act (IGRA), passed in 1988, is a key moment in the history of Native American tribal gaming. This act was a response to the rapid expansion of tribal gaming activities in the 1980s, following the landmark legal decisions we just mentioned, that confirmed the sovereignty of tribes and their ability to conduct gambling operations on their lands.

IGRA’s primary purpose is to provide a regulatory framework for Native American casinos. It aims to balance several key objectives: protecting gaming as a means of generating tribal revenue, ensuring that gaming is conducted fairly and honestly, and shielding it from organized crime and other corrupting influences. This legislation was also a means to clarify the gaming-related powers of tribal governments and the role of states in regulating such activities.

IGRA categorizes gaming into three classes:

• Class I Gaming: This includes traditional social games played for small prizes, primarily as part of tribal ceremonies or celebrations. Class I gaming is under the exclusive jurisdiction of the tribes and is not subject to IGRA’s regulations.
• Class II Gaming: This comprises games like bingo and punch boards – basically, low-variance games with small prize pools – along with any card games that are not explicitly prohibited by the state. The regulation of Class II gaming is primarily the responsibility of the tribes themselves, but the National Indian Gaming Commission (NIGC) has oversight to ensure compliance with IGRA and NIGC regulations.
• Class III Gaming: This is what most people think of when they consider casino gaming – it includes slot machines, blackjack, roulette, craps, and various other forms of conventional casino games. For a tribe to offer Class III gaming, they must enter into a tribal-state compact, negotiating terms with the state where they reside. These compacts often cover issues like gaming types allowed, regulation standards, and how gaming revenue is shared with state governments.

One of the most significant aspects of IGRA is the establishment of the National Indian Gaming Commission (NIGC). This federal regulatory agency is tasked with overseeing the compliance of tribal gaming operations with IGRA.

The NIGC plays a critical role in monitoring tribal gaming activities, ensuring that they operate within the legal framework, and providing guidance and assistance to tribes in developing and operating their gaming establishments.

Despite its benefits, IGRA has not been without controversy. Some critics argue that it imposes too much federal and state control over tribal gaming, infringing on tribal sovereignty. Others argue that the economic benefits are unevenly distributed among tribes, with some communities benefiting a lot from gambling revenue – while others see little-to-no benefits at all.

Growth Over Years

Looking ahead, the future of tribal gaming under the Indian Gaming Regulatory Act seems positive. Today’s tribal gaming industry is a lot different to what it was over three decades ago when IGRA was first brought in.

One of the most significant developments is the continued growth of online gambling. Tribes were, generally, slow to adapt to the online gambling world – and many experts have argued this has lost them significant revenue. While some tribes have now started to open online casinos along with established online gambling names, this also brings into play complex jurisdictional issues, as digital platforms can cross state and even national boundaries.

We’re also seeing issues surrounding the diversification of tribal economies. While gaming has provided substantial revenues for tribes, there is a growing recognition of the need to diversify tribal economies to ensure long-term sustainability.

Some tribes are investing revenue from casinos in Indian reservations into other industries, such as hospitality, real estate, and technology. This not only reduces dependence on gaming but also helps in creating a more resilient economic base for future generations.

In recent years, there has also been an ongoing conversation about amending IGRA to better reflect the current state of online gambling. This is likely to be a very slow path – but in the future, we expect that changes to IGRA will be made, addressing technological advancements from the past few years.

For example, there are few online casinos in Connecticut owned by tribes at the time of writing – but this could well slowly change, so keep an eye on the development of online gambling and track what happens over the next few years.