Why Are There So Many Casinos on Indian Reservations?

Why Are There So Many Casinos on Indian Reservations?

Indian casinos are big in the United States. No matter where you are in the country, you’re probably no more than 3 hours away from an Indian casino. And more Indian casinos are popping up or expanding every single year.

But why?

It all started with the tax man

The history of Indian gaming in the US dates back to a couple named Russell and Helen Bryan. Almost 50 years ago, the County of Itasca, Minnesota attempted to levy a property tax on their house, which was located in the Chippewa Indian Reservation. The couple felt that the county had no authority to do this.

After appealing to the courts and being shot down several times, Russell and Helen Bryan finally got a judgment in their favor from the US Supreme Court.

But that’s not all that happened. In the unanimous judgment, Justice Brennan ruled that states lack jurisdiction to regulate any activity on Indian reservations.

No jurisdiction, you say?

Russell and Helen Bryan weren’t the only ones who paid attention to the Supreme Court ruling. Indian tribes around the country realized that this was an open invitation to do many things that were against state laws – and that includes gambling.

States lack jurisdiction to regulate any activity on Indian reservations

The Seminole Tribe, located in Florida, was the first to bite. Their chief approved the construction of a high-stakes bingo facility. Given Florida’s fairly strict gambling laws, it’s no surprise that players from around the area fell in love. Games were operated 6 days a week and offered jackpots far larger than the $100 Florida maximum.

Players were having more fun than they had in years, and the Seminole Tribe saw a huge increase in revenue to improve tribal services. Everyone was happy… except the State of Florida.

Can’t we all just get along?

With every ruling in favor of the Indians and their casinos, state governments grew concerned. Florida, California, and others felt that Indians now had an unfair advantage over the already established gambling venues authorized by state law.

So, in 1988, Congress passed the Indian Gaming Regulatory Act, and President Ronald Reagan signed his approval. The law now mandates that Indian reservations still have ultimate sovereignty over most gaming activities, but a tribal-state compact must be signed before a tribe can engage in so-called Class III gaming.

Fast-forward to today

So why are Indian casinos so prevalent? We can narrow it down to two reasons: pro-Indian court rulings, and huge revenue potential.

We can narrow it down to two reasons: pro-Indian court rulings, and huge revenue potential

But despite the huge success of Indian gambling around the US, it’s still an issue that courts are dealing with every day. Many states are still not satisfied with tribal-state compact arrangements, and a new tax or regulatory policy could have a big impact. But one thing is for certain: Indian casinos aren’t going anywhere.