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Native American casinos also subject to regulatory controls

1 October 2008

Everyone is aware of the strict guidelines and operating procedures to which state-regulated casinos are held. But who sets the standards and controls for Native American properties?

Casinos such as Four Winds Casino Resort in New Buffalo, Michigan, are operated by Native American tribes (in the case of Four Winds, the Pokagon Band of Potawatomi Indians), which are sovereign nations.

As such, the State of Michigan and the Michigan Gaming Control Board have no regulatory authority over Four Winds or the other Native American casino destinations operating in Michigan.

The same holds true for other Native American casino states in the Midwest and elsewhere around the country. Written agreements known as tribal-state gaming compacts are drawn. They are signed by the tribal nations and the governments of the states in which are developed. These agreements differ slightly from state to state.

Being free from state regulations doesn't mean tribal casinos can do as they please. They are regulated by the National Indian Gaming Commission (NIGC) in conjunction with the government of the particular tribal community which operates the casino.

The NIGC is a United States federal regulatory agency that was established in 1988 following passage of the Indian Gaming Regulatory Act. The agency is based in Washington, D.C. and is responsible for overseeing Native American casinos.

Following passage of the Indian Gaming Regulatory Act, the Indian gaming industry's revenues grew from $200 million in 1988 to $26 billion in 2007.

The Michigan Gaming Control Board does have limited oversight responsibility in regard to Four Winds, including "examining electronic games of chance (slot machines, video poker, etc.) to assure that the devices are operating in accordance with the terms of the compact".

The NIGC also plays a major role in assuring that gaming at tribal casinos is conducted fairly and honestly. For example, it holds operators responsible for verifying that the "hold" (casino win) percentages on slot machines are within the performance standards set by the manufacturers.

The agency also has the authority to conduct investigations, audits, and to issue fines for violations should they be uncovered.

Tribal casinos are not required to report slot payback percentages for publication in the monthly revenue reports filed by gaming commissions in which state-regulated casinos operate.

As for revenues, the State of Michigan requires Four Winds and other tribal casinos under its jurisdiction to pay the state and the local municipalities a percentage of adjusted gross receipts derived from the slots. There are similar agreements in other states.

The Indian Gaming Regulatory Act also stipulates that net revenues from tribal gaming operations be used to fund tribal government operations and programs, provide for the general welfare of the Indian tribe and its members, promote tribal economic development, and support charitable organizations.

John G. Brokopp

John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp

John G. Brokopp
John G. Brokopp's gaming column appears in Chicago Sun Times (Chicago, Illinois), The Times (Northwest Indiana), The Quad City Times (Davenport, Iowa), The Courier News (Elgin, Illinois), The Gazette (Southwest Suburban Chicago) and Senior Wire (Denver, CO). He's also a regular contributor to The Colorado Gambler, Midwest Gaming & Travel, Casino Player and Strictly Slots. John possesses 28 years of experience as a professional handicapper, publicist, freelance writer, and casino gaming correspondent. He is also the author of two very popular books, The Insider’s Guide to Internet Gambling and Thrifty Gambling.

Books by John G. Brokopp:

> More Books By John G. Brokopp