It all began in 1970, when the Supreme Court of the United States has decreed not only that the state does not have the authority to charge the Indians in their reserves, but also that the state has no authority to regulate Indian activities in Indian reserves. In just a few years, Indian entrepreneurs and their tribes began to open Indian bingo activities in many different locations across the United States.
The controversies began when the Indians began to build private casinos, bingo and lottery halls on the territories of the reserves and began to award prizes that exceeded the legal limit imposed by the state. The Indian asked for sovereignty over their reservations which would give them immunity from state laws such as the 280 Public Law, which allowed the state to have jurisdiction over the Indians. American states were afraid that the Indians would have a significant competitive advantage over other regulated gaming venues in the state, which would generate substantial gains for the tribes.
The Indian Gaming Regulatory Act
In 1988, the Congress submitted the IGRA (The Indian Gaming Regulatory Act,
signed by President Ronald Reagan), which gave tribal sovereignty for the creation of casino halls, but states and Indians had to make a Tribal-State Convention and the federal government had the power to regulate gambling. In essence, tribes still have "exclusive rights" for all classes of gambling except when states do not accept the convention or run counter to federal law. Following the IGRA Act, the Indian National Gaming Commission was created as a federal agency in 1988 to regulate high stakes Indian games. Ever since President Reagan signed the IGRA Act, annual Indian gambling earnings exploded from $100 million in 1988 to $16.7 billion in 2006.
No more than 400 Indian gaming establishments in the US!
Statistics from the National Indian Gaming Commission (NIGC) indicates that there are about 400 Indian gaming establishments in the US.
Games are generally divided into 3 classes. Classes I and II are represented by traditional Indian games such as bingo, poker and lottery halls; they do not need to be licensed in order to be opened. The third-class are the high stakes and jackpot games such as casinos, jai alai, horse racing and car races. Annual revenue in these establishments is about $18.5 billion!
- Tribal casinos located in the eastern United States generated $3.8 billion in the 2002 fiscal year.
- Those located in the center of the United States recorded an annual gross income of about $5.9 billion
- Western locations accounted for around $4.8 billion.
Most of the revenue generated by the Indian gaming industry comes from Indian casinos located in or near major metropolitan areas.
Curious about the largest resort casino in North America?
Foxwoods, the largest Indian casino, happens to be also the largest resort casino in North America and is located in Ledyard, Connecticut, led by the Mashantucket Pequot tribe.
Foxwoods - very short history facts
- Foxwoods began its history in 1986 as a simple bingo room.
- The casino was funded by Lim Goh Tong, the Chinese businessman who managed to open the only Malaysian legal casino.
- The Foxwoods Resort Casino opened in 1992 after the owners added some game tables to the old simple bingo room.
- Being extremely financially beneficial, the introduction of gaming tables was immediately followed in 1993 by the introduction of slot machines.
- Now is one of the most successful casino in the world
The casino earns $1.5 billion annually. It is more profitable than any other casino in Las Vegas or Atlantic City. With 7,600 slot machines and 380 playing tables with a surface of 314,000 sq. ft (29,200 m2), Foxwoods Casino is the second largest casino in the world (after the Venetian in Macau with 550,000 sq. ft or 51,000 m2 of playing surface).
In the first 10 years of its existence, the state has earned more than $1.7 billion from Foxwoods alone.
Just a few miles away…
Foxwoods rival casino is The Mohegan Sun Resort & Casino, located in Connecticut as well. It has been operating since 1996 and it is run by Mohegan Tribe and the South African casino conglomerate. This establishment has 150,000 sq. ft (14,000 m2) and holds 3,000 slot machines and 180 game tables. It is the second largest in the United States, located just a few miles away from Foxwoods in Uncasville, Connecticut. The success of both casinos is largely due to the mid-distance position between New York City and Boston.
But are all the tribes in the Casino Industry?
Native American games have changed the tribal economy in some instances, but it has also proven it can be very inefficient in other situations. Despite the tribal victories over the governmental and cultural oppression of the 1950s that produced a dramatic transformation, economic success seems small by comparison. Unemployment has declined, and personal gain has increased, but only a few tribes have felt the economic changes.
The richest tribe in America’s history!
Nowadays, Shakopee Mdewakanton has to be the richest tribe in America's history, with every member earning $84,000 a month, or $1.08 million a year, according to the New York Times.
The success of the 480 members of the tribe, whose ancestors, just 150 years ago, were hunted, slaughtered and exiled in Minnesota, derives from the fact that they manage a resort and a casino. On weekends, their reserve population is equivalent to that of a city.
The tribe has an unemployment rate of 99.2% and everybody volunteers.
Shakopee members enjoy their unusual income. They do not have villas, but most families have at least one luxury car in front of their house. They send their children to private schools and have luxury hobbies - breeding horses, hunting big game, and taking trips that last for months. They also deal with charity - since 1996 they donated $243.5 million to poorer tribes.
So, while many new casinos give much of their revenue to the state budget, the casinos in the Indian reserves do not pay taxes, due to the status of the tribes, that of sovereign nations.
Nowadays Indians are mostly afraid of Internet gambling regulations, which would allow states that approve this to tax online gambling regardless of where it is being run, even reservations. That will definitely change everything…