The Threat Of Reservation Shopping
By Professor I Nelson Rose
Gambling and the Law®:

The Threat Of Reservation Shopping

Anti-gambling activists use it to scare small children. Multi-billion dollar casinos say this is why they need lower taxes. Even some Indian tribes, especially those with competing businesses, claim it's an attack on tribal sovereignty.

But are there really going to be Indian casinos popping up in the middle of cities across the nation?

The short answer is, 'No.' The slightly longer answer is, 'Maybe a few, but probably not.'

Every situation is unique, because every piece of land has its own legal history. And so it is with every tribe.

Still, it is possible to predict whether any particular proposed urban casino will ever be built.

The federal Indian Gaming Regulatory Act ('IGRA') is clear: Only federally recognized tribes may operate any gaming, and gaming is limited to 'Indian Land.'

Existing reservations automatically qualify. If a tribe wants to open a poker room on its land in a state with legal poker, it almost always can do so immediately. What IGRA calls Class III gaming - slot machines, casinos, parimutel betting and lotteries -- can be slower, because the tribe first has to negotiate a compact with the state.

But if the tribe wants a better location, say in the middle of a city, it has to get the agreement of the governor, which isn't going to happen.

The governor does not have this power if the tribe has no land.

Landless tribes are created by flukes. For example, a court decided that the Lytton Band of Pomo Indians had been wrongfully deprived of its status and its land, and ordered tribal recognition restored. But houses, stores and even a college had been built on the land, and the court would not order that it be given back.

The Band was eventually able to find a Congressman to propose converting the San Pablo cardclub into a reservation. It can and does offer poker and bingo. But the Band still does not have a casino, and probably never will, because it still needs a compact.

If a state, like California, agrees to talk with a tribe, it must negotiate in good faith. If a state, like Florida, does not want to talk, the U.S. Supreme Court has said it does not have to and the tribe cannot sue the state. No one knows what happens next. Maybe the Secretary of Interior becomes a super-czar of gambling and issues regulations, despite opposition from the state. Or maybe the tribes have a right, but no remedy at all.

Governors have discovered that the Secretary will approve compacts giving the state a large share of gaming revenue, if a tribe has an exclusive right to gambling in a locale.

Gov. Schwarzenegger signed a compact with the Lytton Band, letting the tribe have 5,000 slot machines, which would have been the largest urban casino in the world. The state's take was to be 25%, so long as the Governor did not approve any casino within a 35 miles radius.

But this compact, like most others, had to be approved by the Legislature, which, in this case, is worried about traffic. Even reducing the initial casino to 'only' 2,500 slots -- still as big as a Las Vegas casino -- did not appease opponents.

And the Secretary's approval is no longer a rubber stamp. The Secretary wants to see the normal safeguards for the environment, tribal members and the community.

So, just because someone announces that they are gong to open an Indian casino near, say, Disneyland (a real proposal), understand that wishes really sometimes do not come true.

© Copyright 2006. Professor I Nelson Rose is recognized as one of the world's leading authorities on gambling law. His latest books, Gaming Law: Cases and Materials and Internet Gaming Law, are available through his website,

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