In 1988, the U.S. Congress passed the Indian Gaming Regulatory Act (IGRA) in response to the proliferation of gambling halls on Indian reservations. IGRA recognized gaming as a way to promote tribal economic development, self-sufficiency and strong tribal government. The Act says a state must permit Indians to run gaming on reservations if the state permits such gaming off reservation. Under IGRA, a tribe that wants to engage in Class III casino-style gaming must first sign a gaming compact (or agreement) with the state where the casino would be located. IGRA requires a state to negotiate in good faith with the tribe seeking a Tribal-State Gaming Compact.
In enacting IGRA, Congress was reacting to a regulatory vacuum left by a 1987 U.S. Supreme Court ruling (California v. Cabazon Band of Mission Indians) that states have no regulatory authority over gaming on Indian reservations. That ruling said tribes have the right to operate gaming on reservations if states allowed such gaming off-reservation.
IGRA expressly granted states and tribes the power to jointly regulate Class III tribal gaming, which includes slot machines, blackjack, keno and other casino style games. IGRA also created the federal National Indian Gaming Commission (NIGC) to oversee reservation bingo games and certain aspects of Class III gaming.
By the early 1990s, several Arizona tribes had installed slot machines in their casinos even though none of them had Tribal-State Gaming Compacts with the State. The Arizona governor at the time, Fife Symington, said reservations should not have casinos because Arizona did not allow such gambling off-reservation. Tribes countered that Arizona did permit such gambling by allowing state lotteries, dog and horse racing, and charity bingo games off-reservation.
In May 1992, NIGC issued rules clarifying that a tribe must have a gaming compact with a state before the tribe can operate slot machines. Immediately after the rules were announced, the Arizona Governor called on the U.S. Attorney in Phoenix to shut down casinos with slot machines. FBI agents raided five Indian casinos and seized their slot machines. At Fort McDowell casino near Scottsdale, tribal members formed a blockade to prevent the removal of the machines, and a three-week standoff ensued.
Against a backdrop of legal challenges by both sides that continued for more than a decade, Governor Symington signed Arizona’s first set of Tribal-State Gaming Compacts (Compacts) with 16 Tribes from 1992 to 1994. The governor’s successor, Jane Hull, signed a compact with a 17th Tribe in 1998.
The Compacts gave tribes exclusive rights to operate slot machines and casino style gaming, limited the number of slot machines and casinos, established comprehensive rules governing gaming, and set minimum internal control standards for casino operations. The Compacts also authorized the State of Arizona to ensure compliance with the Tribal-State Gaming Compact and to work with tribal regulators to protect the integrity of Class III gaming on Tribal lands. This first set of Compacts was in effect from 1993 to 2003.
In the November 2002 general election, Arizona voters approved Proposition 202, which authorized the continuation of Indian gaming. From December 2002 to January 2003, Governor Hull signed new Compacts with 16 Tribes. In 2003, Governor Janet Napolitano signed Compacts with an additional five Tribes. In November 2017, Governor Douglas A. Ducey signed a Compact with the Hopi Tribe.
All federally recognized tribes in Arizona have a Gaming Compact with the State of Arizona. The Compact with each of the 22 tribes is substantially identical, lasts for 10 years and can be renewed for another decade and an additional three-year term. The Compact is part of state law in Arizona Revised Statutes Section 5-601.02.