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What Does the Future Hold for Tribal Casinos in the United States?

By Randy Ray in Casino
| October 6, 2020 10:16 am PDT
Tribal Casinos in the United States

The growth of tribal casinos over the last 30 years in the United States has been nothing short of phenomenal. For people in many parts of the country, tribal casinos are the only option.

This post takes a look at what spurred the growth of these casinos and how it affects the individual gambler.

 I live near Oklahoma, so I’m especially interested in tribal casinos there, but the information in this post applies largely to tribal casinos throughout the country.

Tribal Casinos Make a LOT of Money

Tribal casinos (as opposed to commercial casinos) generated over $30 billion in gambling revenue year. That number is expected to grow.

In fact, the growth in revenue for tribal casinos has continued unabated for several years in a row.

If the growth rate continues at anything close to what it’s been like over the last decade, the tribal casino industry in the United States will be making more money than the commercial casino industry by 2030.

The Indian Gaming Regulatory Act (IGRA)

One of the things I love about writing for gambling for a living is all the cool acronyms I get to learn when I write about gambling laws. There’s UIGEA, for example, and there’s IGRA, which is more pertinent to this post.

In 1988, Congress passed the Indian Gambling Regulatory Act (IGRA). The goal was to slow the growth of tribal casinos in the United States.

Guess what?

It has had the opposite effect.

You’ll now find more tribal casinos throughout the country than you will commercial casinos. You’ll also find more states with tribal casinos than you will states with commercial casinos.

Tribal casinos are operating in 29 states now. When you consider that commercial casinos are only operating in 24 states, this number is impressive.

The most recent state to install a tribal casino is Indiana, which just opened a casino owned by the Pokagon Tribe.

Tribal Casinos and the Economy of Indian Tribes

Nothing has done more for the economic growth of Indian tribes than tribal gaming – at least nothing in the last 2 centuries.

Experts representing the National Indian Gaming Association (NIGA) will happily tell you that IGRA was a huge success for Indian tribes across the country.

That being said, it’s uncertain whether the tribes are going to be able to continue this impressive rate of growth.

The future for tribal casinos might not be as rosy as it used to look.

There are legal concerns related to a ruling from the US Court of Appeals for the Ninth Circuit in California, for example. Their concern is that internet gambling isn’t covered by IGRA.

This has obvious implications that will limit tribal casino growth.

But that’s not the only obstacle.

Getting land for new casinos is getting harder, too.

When Obama was President, the Department of the Interior put over half a million acres of land into trust for tribes. Much of this land was then used to build new tribal casinos in California and Washington.

The Trump administration, on the other hand, has stopped putting land into trust for Indian tribes.

In fact, the Interior Department placed 321 acres in trust for the Mashpee Wampanoag Tribe in Massachusetts, but the Trump administration reversed this decision in September 2018.

How Tribes Get Land for Casinos

If a tribe can’t get land via trust, IGRA only allows tribes to launch casinos on land they’ve bought in limited circumstances.

For example, both federal and state government officials must agree that an off-reservation casino must be in the tribe’s best interest. They also must agree that the new casino won’t hurt the surrounding community in some way.

The federal government can take land into trust for gambling purposes when they do one of the following.

  • Newly recognize a tribe
  • Restore a tribe to federal recognition

Also, the tribe in question can’t already have an existing reservation.

This got even more complicated in 2009 because the US Supreme Court ruled that the Department of the Interior can only take land into trust if they were under federal jurisdiction prior to June of 1934.

That’s when Congress passed the Indian Reorganization Act.

Signs that Tribal Casino Growth Is Still Possible

Don’t think the picture is bleaker than it actually is, though. The expansion of tribal casinos continues.

One of the things working in favor of continued growth is the amount of expertise these tribal nations have gotten over the last few decades. They KNOW how to grow casino revenue.

For example, the Seminole Tribe in Florida opened a new version of the Hard Rock Hotel and Casino in Atlantic City, New Jersey. This puts them right in the middle of one of the biggest gambling markets in the United States.

You also have tribes from multiple states (Alabama, Connecticut, and Oklahoma) working on opening commercial casinos in Arkansas and Pennsylvania.

Sports Betting and Tribal Casinos

The Supreme Court ruling in May 2018 that paved the way for legalized sports betting throughout the United States has also resulted in sports betting availability at various tribal casinos, too.

The first tribe not in Nevada to offer sports betting at its properties was the Mississippi Band of Choctaw Indians. They own 3 tribal casinos, each of which now offers sports betting.

The Pueblo of Santa Ana launched a sportsbook at Santa Ana Star Casino shortly thereafter.

But most tribes throughout the United States aren’t able to immediately launch a sportsbook. That’s because each tribe must abide by the terms of the compact they have negotiated with their individual state regarding which activities they’re legally able to offer.

In Mississippi and New Mexico, they didn’t need to revise their compacts.

So, in other states, negotiations between the tribes and the states are delaying the launch of sports betting there. Most experts agree that legal sports betting at most tribal casinos is on its way, and it will likely result in bigger profits for those properties.

The future of tribal casinos in the United States looks bright, although they might or might not be able to maintain the kind of aggressive growth rate they’ve achieved over the last 30 years.

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