Native American gaming
Native American gaming refers to casinos, bingo halls, and other gambling operations on Indian reservations or other tribal land in the United States. Because these areas have tribal sovereignty, states have limited ability to forbid gambling there, as codified by the Indian Gaming Regulatory Act of 1988. As of 2011, there were 460 gambling operations run by 240 tribes, with total annual revenue of $27 billion.
In the early 1970s, Russell and Helen Bryan, a married Chippewa couple living in a mobile home on Indian lands in northern Minnesota, received a property tax bill from the local county, Itasca County. The Bryans had never received a property tax bill from the county before. Unwilling to pay it, they took the tax notice to local legal aid attorneys at Leech Lake Legal Services, who brought suit to challenge the tax in the state courts. The Bryans lost their case in the state district court, and they lost again on appeal in a unanimous decision by the Minnesota Supreme Court. They then sought review in the United States Supreme Court. The Supreme Court granted review, and in a sweeping and unanimous decision authored by Justice Brennan, the Supreme Court held not only that states do not have authority to tax Indians on Indian reservations, but that they also lack the authority to regulate Indian activities by Indians on Indian reservations. As Gaming Law Professor Kevin K. Washburn has explained, the stage was now set for Indian gaming. Within a few years, enterprising Indians and tribes began to operate Indian bingo operations in numerous different locations around the United States.
Under the leadership of Howard Tommie, the Seminole Tribe of Florida built a large high-stakes bingo building on their reservation near Fort Lauderdale, Florida. The tribe planned for the bingo hall to be open six days a week, contrary to Florida state law which only allows two days a week for bingo halls to be open, as well as going over the maximum limit of $100 jackpots. The law was enacted from the charity bingo limits set by Catholic Churches. The sheriff of Broward County, where the Indian reservation lies, made arrests the minute the bingo hall opened, and the tribe sued the county (Seminole Tribe v. Butterworth), stating that Indian tribes have sovereignty rights that are protected by the federal government from interference by state government. A District court ruled in favor of the Indians, citing Chief Justice John Marshall in Worcester v. Georgia. Here began the legal war of Indian gaming with a win for the Seminoles.
Controversy arose when Indians began putting private casinos, bingo rooms, and lotteries on reservation lands and began setting gaming prizes which were above the maximum legal limit of the state. The Indians argued for sovereignty over their reservations to make them immune from state laws such as Public Law 280, which granted states to have criminal jurisdiction over Indian reservations. States were afraid that Indians would have a significant competitive advantage over other gambling establishments in the state which were regulated, which would thus generate a vast amount of income for tribes.
In the late 1970s and continuing into the next decade, the delicate question concerning the legality of tribal gaming and immunity from state law hovered over the Supreme Court. The Court addressed the potential gambling had for organized crime through the Organized Crime Control Act of 1970. A report by the Department of Justice presented to the Senate Select Committee on Indian Affairs on March 18, 1992 concluded that through several years of FBI investigation, that organized crime had failed to infiltrate Indian gaming and that there was no link between criminal activity in Indian gaming and organized crime 
Cabazon Band, 1980
In the early 1960s, the Cabazon Band of Mission Indians, near Indio, California, were extremely poor and did not have much land because of neglected 1850s treaties by state senators. As Stuart Banner states, the Cabazon Band and the neighboring Morongo Reservation had "some HUD buildings and a few trailers, but that was about it. There was nothing really there. The people simply didn't have a lot." The Cabazon Band turned to casino operations, opening bingo and poker halls in 1980. Shortly thereafter, the Indio police and the Riverside County Sheriff shut down the gambling halls and arrested numerous Indians while seizing any cash and merchandise held in the tribe's possession. The Cabazon Band sued in federal court (California v. Cabazon Band) and won, as did the Seminole Tribe in Florida. Although the tribe won in the lower courts, the Supreme Court reviewed the case in 1986 to reach a decision over whether Indian reservations are above state law. The Court again ruled that Indian gaming was to be regulated exclusively by Congress and the federal government, not state government; with tribal sovereignty upheld, the benefits of gaming became available to many tribes.
Indian Gaming Regulatory Act
In 1988 Congress passed the Indian Gaming Regulatory Act (IGRA) (signed by President Ronald Reagan) which kept tribal sovereignty to create casino like halls, but the states and Indians must be in Tribal-State compacts and the federal government has the power to regulate the gaming. These compacts have been used by state officials to confiscate Indian casino revenue which serves as a "special" tax on Indian reservations. Essentially, the tribes still have "exclusive right" to all classes of gaming except when states do not accept that class or it clashes with federal law.
Class III Indian gaming became a large issue for the states and federal government, because of these court cases, as Congress debated over a bill for Indian gaming called the Indian Gaming Regulatory Act.
There are currently a number of lawsuits pending which challenge the Indian Gaming Regulatory Act on constitutional grounds (see e.g. Warren v. United States)
When President Reagan signed the IGRA, Indian gaming revenue skyrocketed from $100 million in 1988 to $16.7 billion in 2006. Following the IGRA, the National Indian Gaming Commission was created as a federal agency in 1988 to regulate high-stakes Indian gaming.
The Commission consists of three members: a chairman who is appointed by the US President with consent of the Senate, and two associate members appointed by the Secretary of the Interior. Each member serves a three year term and must pass a detailed background check by the US Attorney General.
The NIGC withholds certain powers over Class II and Class III gaming. These include budget approval, civil fines, fees, subpoenas, and permanent orders. The NIGC monitors Class II gaming on Indian lands on a continuing basis through inspection, investigation, access to records, and contracts. As for Class III gaming, all contracts must be approved by the chairman of the NIGC. 200 of the 562 federally recognized tribes created Class III gaming of large casinos and high jackpots.
This rise of gaming not only brought great revenue, but also corruption. In January 2006, a court case involving lobbyists convicted of felonies such as conspiracy, fraud, and tax evasion. This was known as the Jack Abramoff Indian lobbying scandal. These lobbyists, Jack Abramoff, Ralph Reed, Jr., Grover Norquist, and Michael Scanlon, bribed members of Congress when lobbying for Indian casinos then they over charged their Indian clients; this generated around $90 million in fees from the Indians.
In 2006, Congress introduced legislation to protect their own casino interests from those tribes that are outside reservations. Further, the Bureau of Indian Affairs (BIA) has faced increasing pressure to tighten regulatory policy and oversight of casino approvals. In particular, the BIA has been instructed by Congress to implement new procedures after two decades of IGRA's existence. These procedures would allow local communities to have more influence in the siting of casinos in their community, and would make the process of casino approval more transparent. To many tribes, however, the proposed regulations will further encroach on tribal sovereignty.
Statistics provided by the National Indian Gaming Commission (NIGC), indicate that there are 460 Indian gaming establishments in the US. These casinos are operated by 240 federally-recognized tribes and offer Class I, Class II and Class III gaming. Gaming is divided into 3 classes. Class I and Class II are traditional Indian gaming such as bingo halls, poker halls, and lotteries, and requires no license. Class III gambling has high jackpots and high-stake games such as casinos, jai alai, and racetracks, and states feared that organized crime would infiltrate the Class III gaming on their reservations. The revenue generated in these establishments was close to $27.1 billion in 2011 up from $12.8 billion in 2001. The states with largest revenues in 2011 were Sacramento ($6.9 billion) and Washington D. C. ($6.7 billion). The Native American gaming industry didn’t show the negative tendencies during and after economic crisis of 2007-2009, in contrast to Las Vegas and Atlantic City.
Tribal casinos in the eastern US generated roughly $3.8 billion in FY02. Those in the Central US recorded gross revenues of approximately $5.9 billion, while those in the Western US generated nearly $4.8 billion. Most of the revenues generated in the Indian gaming are from casinos located in or near large metropolitan areas. Currently, 12% of Indian gaming establishments generate 65% of Indian gaming revenues. Indian gaming operations located in the populous areas of the West Coast (primarily California) represent the fastest growing sector of the Indian gaming industry. As suggested by the above figures, the vast majority of tribal casinos are much less financially successful, particularly those in the Midwest and Great Plains. Many tribes see this limited financial success as being tempered by decreases in reservation unemployment and poverty rates, although socioeconomic deficits remain.
As of 2008 there are 562 federally recognized tribes in the United States, many of which have chosen not to game.
The largest casino in the state of California is the Pechanga Resort and Casino in Temecula, with 3,000+ slot machines and approximately 200,000 sq ft (19,000 m2) of gaming space. Other notable gaming operations in California include the Morongo Casino, Resort & Spa, and the Chumash Casino.
The Chumash tribe in Santa Barbara County is notable in that it demonstrates interaction and collaboration between the tribe and the surrounding non-Indian population of the Santa Ynez Valley. The Chumash tribe, who has seen success as a result of their gaming operations, planned to expand its current facilities but have recently scaled back. The first structure, built in 1994, was modest and resembled a tent, but has grown to three large, albeit temporary, rooms. The casino serves 3,500 people, mostly local Hispanics, per day and employs 750, mostly non-Indian, employees. There has been pressure from the non-Indian community not to expand because the entire surrounding area feels negative effects from the gaming enterprises. The Santa Ynez Valley non-Indian community is impacted aesthetically and economically. Many do not welcome the 72,000-square-foot (6,700 m2) hotel and 155,000-square-foot (14,400 m2) casino, and many predict a strain on themselves when their community must expand emergency services. Many are aware of other problems that will arise such as increased pollution, traffic, and criminal activity. The Chumash have agreed to scale back. The project is unprecedented in that the funding for it is financed through bonds sold to mutual fund and insurance fund managers and is “the first time in California that a bank has underwritten a bond sale for an Indian casino project.” 
The Foxwoods Resort Casino opened in 1992 in Ledyard, Connecticut. Operated by the Mashantucket Pequot Tribe and earning $1.5 billion, it is more profitable than any one casino in Las Vegas or Atlantic City. With 7,200 slot machines and 380 table games, making the 314,000-square-foot (29,200 m2) Foxwoods Casino the largest casino in the USA and second largest in the world(after Venetian Macao with 550,000 square feet (51,000 m2) of casino space). The agreement between the Mashantucket Pequot Tribal Nation and the State of Connecticut promises the state $80 million or 25% of their annual slot revenue. For the first 10 years of operation, the state has received more than $1.7 billion from Foxwoods alone.
The Mohegan Sun Resort & Casino is also located in Connecticut. It has been in operation since 1996 and is operated by the Mohegan tribe and the South African casino conglomerate. This enterprise is 580,000 square feet (54,000 m2) and consists of 6,500 slot machines and 180 table games. It is the second largest casino in the United States, located a few miles away from Foxwoods in Uncasville, Connecticut.
The success of both casinos is due in no small part to their location roughly halfway between New York City and Boston.
Impact on Native American Economics
Native American gaming has, in some instances, changed the face of tribal economies, but it has also proven to be very ineffective in other situations. Although tribal victories over the governmental and cultural oppression in the 1950s yielded a dynamic transformation, economic success fell short in comparison. Unemployment was down and personal income had increased, but only a handful of tribes had made economic changes. Their strides were spotty and fluctuated greatly from each Indian reservation. This was happening because, for most tribes, their lands were not economically productive, infrastructure was poor, and they were far away from prospering markets of large populations. In order to address the issue of poverty, Indian tribes were required to fuel some type of economic development. Indians sold some of their tribal land to prospecting non-Indians in order to stimulate economic growth, but tribal gaming has proved to be the single largest amount of income in the Indian community. However the United States government intervened in tribal affairs throughout the rise of Indian gaming.
Many tribal governments have seen substantial improvements in their ability to provide public services to their members, such as building schools, improving infrastructure, and shoring up the loss of native traditions. Tribal gaming operations have not been without controversy, however. A small number of tribes have been able to distribute large per-capita payments, generating considerable public attention. Additionally, the national expansion of Indian Gaming has led to a practice critics call reservation shopping. This term describes tribes that, with the backing of casino investors, attempt to locate a casino off their reservation, usually near a large urban center. However, although authorized by the Indian Gaming Regulatory Act, only three such "off-reservation" casinos have been built to date.
Indian Gaming Working Group
In June 2004, in an effort to identify and direct resources to Indian gaming matters, the FBI and NIGC created the Indian Gaming Working Group (IGWG). The IGWG's purpose is to identify resources to address the most pressing criminal violations in the area of Indian gaming. This group consists of representatives from a variety of FBI subprograms (i.e. Economic Crimes Unit, Money Laundering Unit, LCN/Organized Crime Unit, Asian Organized Crime Unit, Public Corruption/Government Fraud Unit, Cryptographic Racketeering Analysis Unit, and Indian Country Special Jurisdiction Unit) and other federal agencies, which include Department of Interior Office of Inspector General (DOI-OIG), NIGC, Internal Revenue Service Tribal Government Section (IRS-TGS), Department of Treasure Financial Crimes Enforcement Network (FINCEN), Department of Justice (DOJ), and Bureau of Indian Affairs Office of Law Enforcement Services (BIA-OLES). The IGWG meets monthly to review Indian gaming cases deemed to have a significant impact on the Indian gaming industry. As a result of these meetings, several investigations have been initiated and the IGWG, through its member agencies, has provided financial resources, travel funds, liaison assistance, personnel resources, coordination assistance and consultation.
The IGWG works in the following manner:
- If suspected criminal activities are taking place in the Indian gaming industry and the interested office/agency does not have adequate resources to investigate this matter, the office/agency contacts the Indian Country Special Jurisdiction Unit, FBIHQ. This contact may come from the FBI or an outside source or agency.
- A small group of IGWG members will convene to determine if the alleged criminal violation is a matter of "national importance" in its effect(s) on the Indian gaming industry. If so, the IGWG will invite representatives from the affected FBI division, other federal agencies (if appropriate), the affected United States Attorney's office, and IGWG member agencies to meet and further review the case.
- During this review, the agency eliciting the support of the IGWG will make a case presentation. Following a full review, the IGWG will assist the requesting office/agency to identify and obtain resources to assist in the investigation.
- Throughout the investigation, the IGWG will assist by providing "experts" to assist in the investigation; allocating special funding (i.e. facilitating TDY travel, Title III support, special forensic examination, etc.); conducting liaison with other federal agencies; facilitating the establishment of Indian gaming task forces, and/or providing consultation.
In order to properly detect the presence of illegal activity in the Indian gaming industry law enforcement offices with jurisdiction in Indian gaming violations should:
- Identify the Indian gaming establishments in their territory.
- Establish appropriate liaison with Tribal Gaming Commission (TGC) members, State Gaming Commission Representatives, State Gaming Regulatory Agency Representatives, and Casino Security Personnel.
- Establish liaison with representatives from the NIGC and regional Indian gaming intelligence committees. Both will provide valuable information on scams, allegations of criminal wrongdoing, and other patterns of illegal activity.
- Make proactive attempts during crime surveys to identify criminal activity in Indian gaming establishments.
- Send investigators and financial analysts to training which provides them with the knowledge and skills they need to effectively investigate criminal activity in Indian gaming establishments.
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