Who Regulates Casinos
A number of readers and fellow gamblers have asked me recently about how much of the money we wager at Indian casinos actually stays on the reservation.
The answer: It depends.
Background in this area requires a bit of case law. In 1987, the U.S. Supreme Court ruled (in the case California vs. Cabazon band of Mission Indians) that states had no authority to prosecute gaming conducted on Indian land. It was a huge victory for the tribes.
In a few years there may be a whole new regulatory agency that will oversee gambling operations across America. Gambling regulation has always been considered the province of state and local. Who regulates casinos in Arizona? Answer: A Class II facility is regulated by the tribe that owns it, with oversight by the National Indian Gaming Commission. ADG has no jurisdiction over Class II gaming facilities. All Class III casinos are regulated by both the Tribal Gaming Authority of the tribe that owns the casino and by ADG in accordance with the Arizona Tribal-State Gaming Compact (Compact). Regulations of the Nevada Gaming Commission and Nevada Gaming Control Board. As Adopted July 1, 1959, and Current as of January 21, 2021. Miscellaneous Information. Document Containing All Regulations as of January 21, 2021. Table of Contents. They get more gambling revenue than Las Vegas. In 2017, Indian gaming revenues increased 3.9%.
As tribes began reaping huge profits, state governments (including ours) reacted to this decision with alarm, and the U.S. Congress began consideration of federal legislation to regulate the Indian gaming industry. That law, the Indian Gaming Regulatory Act, was enacted in 1988 after tribes and states reached a compromise that gave states unprecedented regulatory participation through the negotiation of agreements called 'compacts.'
Since the passage of the law, California has ratified 67 compacts. These compacts dictate everything from the number of slot machines a tribe can have to the percentage of revenue it must share with the state (the rest would be the amount of each wager that stays on the reservation).
In some cases, environmental impact issues and other stipulations are incorporated into a compact, as well.
The Indian Gaming Regulatory Act also created three classes of tribal gaming:
Class I: Comprises 'social games' on reservations played solely for prizes of minimal value. This includes traditional forms of Indian gaming as part of tribal ceremonies or celebrations.
Class II: Includes bingo and related games, including pull tabs, lotto, punch boards, tip jars, instant bingo, electronic bingo and some card games (excluding house-banked card games).
Class III: Consists of all forms of gaming that are not Class I or Class II, including slot machines and house-banked table games, such as blackjack, roulette and three-card poker.
It's next to impossible to find Class I gaming at public facilities, and only Class III games require tribal-state compacts. That leaves Class II. These devices enable tribes to keep more of every dollar (because technically tribes self-regulate with Class II and they are not required to share a certain amount with anyone).
This is the kind of gaming found at San Pablo Lytton Casino in San Pablo, which boasts 1,100 machines that look like slot machines but actually are electronic bingo devices.
Gaming at most other Indian casinos is considered Class III, largely because the owning tribes first were required to iron out compacts with the state. Since a boatload of compacts in 1999, a handful of groups have amended the agreements to allow them to operate a greater number of Class III slots.
Most of the casinos in this scenario are in the southern part of the state, though Thunder Valley Casino in Lincoln and Coyote Valley Casino in Ukiah have renegotiated deals in recent years.
While there's no question that not all of this money will stay on the reservation, more slots, of course, mean more chances to win.
Once a month this column will address specific strategy and table etiquette questions from readers. Submit questions to 96hours@sfchronicle.com.
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