Congress passed the Indian Gaming Regulatory Act (IGRA) in 1988, to provide a regulatory structure for gambling in Indian country. A broad generalization about this law: IGRA permits American Indian tribes on American Indian lands to conduct, with minimal state regulation, any type of gambling allowed in any fashion by a state for the state's non-Indians.
Why was IGRA necessary?
Gambling started on tribal land before IGRA passed in 1988. Large-scale bingo games were conducted at many locations, including in Minnesota, as early as the 1970s. As gambling spread, states challenged the rights of tribal governments to conduct gambling. A series of court cases established that tribes could legally gamble with only limited state involvement. IGRA was passed by Congress in order to codify those court decisions, which had already established the right of tribal governments to conduct gambling.
What does IGRA require?
Among other provisions, IGRA establishes a National Indian Gaming Commission (NIGC) with federal authority over tribal gambling. IGRA also sets a regulatory framework in place, attuned to the nature of the gambling game in question. Finally, it requires states to negotiate gambling compacts with tribes, in good faith.
IGRA divides gambling by American Indian tribes into several categories:
Before a tribe may operate Class III games, the tribe must request that the state enter into negotiations for a gaming compact. The compact can cover such provisions as the application of criminal and civil laws of the state and the tribe, assessment by the state for costs related to regulation, taxation by tribes to defray regulation costs, remedies for breach of contract, and any other subjects related to gaming. Once the compact is concluded, it is submitted to the Secretary of the Interior for approval.
What if the state does not want a compact?
Good faith negotiations are required of states, which means the state is not able to unduly hamper the compact process. Specifically, IGRA provides that if a state fails to negotiate, the tribe may initiate a cause of action in U.S. District Court, alleging failure of the state to enter into negotiations or to conduct the negotiations in good faith. The burden of proof lies with the state to prove that it did negotiate in good faith.
If the court finds for the tribe, the state and tribe have 60 days in which to negotiate a compact. If after 60 days a compact has not been concluded, each side must present a proposed compact to a court-appointed mediator. The mediator must select the compact that most closely complies with the IGRA and any other applicable federal law. If the state refuses to accept the mediator's compact, the Secretary of the Interior is notified, and the Secretary will prescribe, in consultation with the tribes, the procedures under which Class III gaming may be conducted. The procedures must be consistent with mediator's compact, the IGRA, and state laws.
In 1996, however, these provisions in IGRA were effectively struck down when the U.S. Supreme Court held that the Eleventh Amendment to the U.S. Constitution prohibited Congress from giving the federal courts jurisdiction over the states to hear IGRA claims absent the state's consent in Seminole Tribe v. Florida, 116 S. Ct. 1114 (1996). Since that decision, the issue has been whether IGRA should be amended to permit the Secretary of the Interior to impose gambling procedures on recalcitrant states. The exact nature of federal, state, and tribal relationships regarding gambling has been the subject of Congressional debate for the past four years, but no legislation on the issue has been passed during that time.
Are there limits on what compacts may contain?
Compacts are the result of either good faith negotiations or court orders. The negotiations could, in theory, contain any idea agreeable to the tribe and state. However, there are constraints:
What do Minnesota compacts require?
Minnesota has 11 tribes and two compacts signed with each tribal government. The first round of compacts allows video slot machines, video poker, video craps, video blackjack, video keno, video roulette, video horse racing, and other video gambling games. The second round of compacts allows blackjack card games.
The compacts allow Minnesota to attempt to ensure fair comportment of games, including requirements that gambling devices meet state specifications, that games be played according to set rules, specific payouts be ensured to players, and other negotiated provisions to ensure the integrity of games. Minnesota's compacts require the 11 tribal governments to pay a modest amount each year to defray the costs of regulation.
Minnesota compacts do not have a termination date. There is a provision allowing either the state or the tribal governments to request further negotiations at any time, with the agreement of the other party.
There are 17 casinos operating in Minnesota. Revenues and other economic data on these casinos are not publicly available. Projections have been made, but these projections, although generally favorable, are not definitive. Generalizations about casino gambling should note the fact that while some tribal casinos in Minnesota are large and have high traffic volume, most are smaller and serve a modest clientele.