When most people living outside the US think of gambling and the United States, images of neon lights and the Las Vegas Strip are likely the first things that come to mind. Opulence, kitsch, and elegance are all present to a very high degree.
However, what most foreigners need to be made aware of is that the US, by and large, has not always been super gambling-friendly. In fact, in many parts, it still isn’t, despite the American Gaming Association reporting that the country’s gambling sector pulled in $46.93 billion through the first eight months of 2024. Moreover, it is pivotal to note that these numbers have been generated by commercial gaming operators (offline and online) and do not include money raked in by tribal venues.
Yes, the US gambling sphere has two land-based sections, both of which have spread out online and in the betting arena in recent years in different ways. The country’s 2023 tribal gaming revenues notched a record of $41.9 billion, displaying a 2.4% increase compared to figures reported for the fiscal 2022 year. According to the National Indian Gaming Commission, the tribal regulatory body, gaming revenues from Native casinos have more than doubled since 2004 and have shown consistent growth post-2020. Below, we detail how these venues and the tribal gaming sector in the US operate despite state laws that may not be as favorable to allowing gambling.
State Laws vs. Tribal Rights
The existence of Native American casinos and sportsbooks confuses many unfamiliar with this sphere, and their proliferation throughout the nation bewilders people regarding gaming establishments not being legally allowed, as many believe. Currently, twenty-four US states allow commercial casinos, but tribal ones are widely active in loads more areas of the nation, except a few territories, such as Utah, which has some of the strictest anti-gambling laws in the nation.
Tennessee is another slice of Americana with almost equally fierce anti-gambling stances, and the same goes for Hawaii. Though it must be stated that a few other regions also have no active tribal gaming locales, that is mainly because there has been no interest in establishing these.
While states have the right to forbid companies from organizing games of chance within their borders, their legal power does not spread to stop federally recognized tribes from running Class II gaming venues on Native land. They can do so without state approval, thanks to the Indian Gaming Regulatory Act of 1988. That is a federal law enacted by the 100th US Congress, which governs Native American gaming in the US, establishing a jurisdictional framework for it, protecting it as a tool for tribes to generate extra revenues and boost economic development on their lands.
Hence, tribe members can run Class II gaming on Native territory regardless of state laws. That said, for such properties to feature Class III games, such as table classics and slots, they must enter into a compact with state authorities, which, as noted, some state legislatures still need to explore.
The Difference Between Class II & Class III Gaming
Class II gaming refers to gambling products that are not house-backed, meaning ones with more of a lottery prize-producing concept. This encompasses VLTs, or video lottery terminals, which look like slots but get called one-armed bandits with a bingo soul because they produce wins differently from casino-housed reel-spinning machines. The difference between these is that VLTs connect several gamblers who compete to be the winners of a round with a fixed number of rewards. In slot play, each round is its own thing, and a random number generator determines if a gaming round is a prize one, regardless of what is happening on other machines with the same game.
Class III gaming engulfs house-backed games or gaming products where players compete against the casino, like in blackjack, roulette, craps, and baccarat. Regarding table/card games, it is essential to highlight that poker is its own thing. It gets considered a game of skill, not one of chance. That is why it requires its legislature, and commercial casino-style gaming is prohibited in the Golden State, but there are eighty-seven licensed California card rooms.
The Influence of Tribal Gaming on Native Economy
For the most part, tribal gaming has been allowed in the US to help reduce unemployment in tribal communities and improve the lives of people living on reservations. Much of the revenues generated by tribe-owned establishments get reinvested into local communities through various projects covering infrastructural improvements, health, social services, education, and more. These locales also boost the tourist appeal of tribal territories, contributing to nearby businesses, primarily hospitality and entertainment, as well as retail outlets.
Even more states become laxer concerning gambling legalization in recent times, especially post-2018 and the fall of PASPA, which removed the federal ban on sports betting. The tribal industry has managed to fare well and expand, showing a growing demand for betting and gaming fun in North America. Some tribes have even renegotiated their compacts to include online gambling, and even with worries that overdependency on this sector can create major financial vulnerability if revenues from it decline, sentiments about expanding tribal gaming have only swelled.
