"A number of readers and fellow gamblers have asked me recently about how much of the money we wager at Indian casinos actually stays on the reservation.

The answer: It depends.

Background in this area requires a bit of case law. In 1987, the U.S. Supreme Court ruled (in the case California vs. Cabazon band of Mission Indians) that states had no authority to prosecute gaming conducted on Indian land. It was a huge victory for the tribes.

As tribes began reaping huge profits, state governments (including ours) reacted to this decision with alarm, and the U.S. Congress began consideration of federal legislation to regulate the Indian gaming industry. That law, the Indian Gaming Regulatory Act, was enacted in 1988 after tribes and states reached a compromise that gave states unprecedented regulatory participation through the negotiation of agreements called "compacts."

Since the passage of the law, California has ratified 67 compacts. These compacts dictate everything from the number of slot machines a tribe can have to the percentage of revenue it must share with the state (the rest would be the amount of each wager that stays on the reservation).

In some cases, environmental impact issues and other stipulations are incorporated into a compact, as well."

Get the Story:
Gaming by Matt Vilano: Federal law regulates American Indian casinos (The San Francisco Chronicle 9/3)