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The Indian Gaming Regulatory (IGR) Act of 1988 helped pave the way for native tribes across the country to build and operate their own casinos. At the time, poverty was common on Indian reservations, with few opportunities to work. The IGR changed that, allowing tribes to establish a new source of revenue that was invested into improving infrastructure, starting social programs, and creating jobs.
For many years, tribal casinos were one of the few places in the country where legal gambling was permitted. However, a growing number of states are now looking to approve online gambling, potentially leading to dropping player rates at tribal casinos. This could potentially have an impact on tribal communities, resulting in a loss of revenue. However, it could also see Tribal communities and online casino operators working together.
Why Tribal Communities Opened Casinos
With most tribal reservations located on non-arable land and away from urban areas, they suffered from a major lack of resources, and it was difficult to grow crops or find employment. In many cases, even water was scarce, and this increased the strain on tribal communities.
Many reservations struggled economically, with high rates of unemployment, poverty, welfare dependency, and alcoholism. In a time when many tribal communities were finding it hard to be self-sufficient, casinos helped to create new opportunities, bringing in much-needed funds for schools, elderly care, and healthcare.
In the 1970s, some Native American leaders began holding bingo games as a way to bring in revenue, and eventually, these formed bingo halls with added slot machines and other gaming tables. This provided a way for tribes to improve their local economies, with people traveling to Indian reservations to gamble.
The IGR made it legal for tribes to legally establish their own casinos, as it ruled that tribal reservations were technically sovereign and not affected by federal laws. Since then, casinos have become a major source of employment for Native Indians while also helping to fund social programs and improve the quality of life on reservations.
How Online Gambling is Affecting Tribal Casino Revenue
In recent years, several states have made moves to legalize online gambling, with both sports betting and online casinos becoming legal. For tribal reservations, this could potentially lead to issues as people may be less inclined to travel to a casino when they can easily play from their own homes.
In 2018, the Supreme Court overturned the federal ban on sports betting thanks to opposition from the state of New Jersey. Soon after, multiple US states introduced regulations to allow legal sports betting at licensed venues, with both online and in-person betting allowed.
In addition to legalizing sports betting, New Jersey, Michigan and several other states have made online casino gaming legal. Notably, Michigan has emerged as one of the states at the forefront of this movement, after New Jersey. With the recent legalization of online casinos in Michigan, players in the State now have the opportunity to engage in a wide range of casino games, including online slots, table games, and more, all from the convenience of their smartphones or computers. It’s now possible for US players to sign up and play at regulated online casinos in Michigan, using their smartphones or computers to play online slots, table games, and more.
Naturally, you would assume that these online casinos would limit the number of people attending tribal casinos, as they offer greater convenience. However, there’s no data to suggest this at the moment. It could be that the type of people who would prefer to play online were already playing at unlicensed offshore sites. In addition, tribal casinos provide events and other forms of entertainment to bring in customers.
Partnerships Between Tribal Casinos and Online Casinos
The spread of online gambling seems to be inevitable at this point. While some states might hold out, it’s likely that the increased tax revenue will be too appealing to give up. New Jersey makes around $300 million a year from legalized online casinos.
While online casinos and tribal casinos might seem like rival businesses competing for a share of the same market, the demographics of people who play online and in person might have little overlap. In fact, tribal communities may benefit more from forming partnerships with online casinos than from trying to compete directly with them.
The key is to make sure that state regulations for online gambling are favorable towards existing tribal casinos. For example, in Michigan, all casino operators that launch in the state need to be partnered with a tribal casino, and there’s an agreement on revenue sharing.
Final Thoughts
Casinos presented a lifeline to many tribal communities back in the 80s, and they’ve become an integral part of many reservations, providing jobs and boosting local economies. While online casino gaming may be seen as a threat, it can also become a benefit, provided tribal casinos are able to adapt and change with the times.