Frequently Asked Questions
What are Tribal-State Compacts?
- In 2002, the voters of Arizona approved Proposition 202 which continued gaming on Indian lands and shared a portion of gaming revenues with the State of Arizona and local governments. That Proposition created what is known as the Tribal-State Compact.
- The Arizona Tribal-State Compact is an agreement between sovereign Tribal governments and the State of Arizona that provides the framework for well regulated, limited, Tribal gaming that benefits both Tribes and the State . Though all are similar, each Tribe has its own Compact with the State of Arizona.
- The compacts further ensure that the regulation and enforcement of the compacts does not come at a cost to the state. Indeed, to the contrary, not only does the compact reimburse the state for its regulatory oversight of casino operations, it specifies a progressive-scale revenue contribution to the Arizona Treasury that helps underwrite a number of Arizona public policy priorities.
How is “Tribal Gaming” or “Indian Gaming” different from commercial gaming?
- Tribal Gaming is gaming that is owned and operated by and for Tribal Communities.
- IGRA requires that, unlike commercial gaming, all revenues from Tribal Gaming operations be used solely for public purposes. Tribes use gaming funds for housing, education, health care, courts and law enforcement, emergency services, roads, water and sewer systems, social services and business development. Just as state governments determine the use of lottery funds, Tribal governments determine how gaming revenues can be spent according to the provisions of IGRA.
Is “Fantasy Sports” commercial Gaming?
- Yes. There is a critical distinction between fantasy sports played among friends (currently legal ‘social gambling’) and house banked fantasy sports played online where a third-party is making a profit. When a commercial 3rd party is banking the game and making a profit, it is no longer social gambling, it’s commercial gambling, and it’s illegal under the Tribal-State Compacts.
Why do Tribes have the right to operate casinos in Arizona?
- The US Supreme Court’s recognition of inherent tribal self-governing powers in the 1987 California v. Cabazon decision set the stage for the Indian Gaming Regulatory Act of 1988 (IGRA). In that decision, the court found that the power to set the terms of gambling on reservations stemmed from longstanding tribal civil and regulatory powers of self-government.
- Cabazon recognized the inherent relevant powers of Indian self-governance. IGRA was a response to Cabazon and constrained the tribal rights that the court recognized in their decision.
- Under that law, American Indian governments—not individuals—may offer Las Vegas-style casino gambling in states that regulate but do not prohibit such gambling. IGRA only permits tribes to offer such gambling on their reservation lands once they have entered into a government-to-government agreement with the states in which their casinos would be located. A Class III gaming compact, as it is known, may govern the scope of games the tribe offers and may apportion regulatory responsibility between the tribe and state. But because Congress intended to prevent states from extracting revenue concessions in exchange for agreement, IGRA explicitly prohibits state taxation of games. States cannot insist on a quid pro quo of revenue sharing for compact approval.
- Before the Indian Gaming Regulatory Act (IGRA) recognized the inherent rights of Indian self-government, Tribal people suffered more than two hundred years of neglect. The federal government took away ancestral Tribal lands that were rich with water, minerals and other natural resources and left behind promises to compensate Tribes for their losses. But as history shows us, those promises were broken.
- Without a tax base or other revenue sources to fund essential services like roads, electricity, water, sewer and telephones, Tribal leaders in modern times struggled to provide services for their Cultural values remained intact, but basic services were inadequate or non-existent.
- To make up for a lack of economic opportunity, industry and natural resources within their modern lands, Tribal leaders at the time began to offer gaming such as Bingo in order to generate much-needed revenues for their people and communities.
- Seventeen Tribes representing more than 90% of Indian people living in Arizona supported Proposition 202, which was approved by voters in November, 2002. This enabled Tribal leaders to continue gaming on Tribal lands, enabled non-gaming tribes living in remote areas of the state to benefited from gaming revenue, and established a system to share revenues with the people of Arizona for education, trauma and emergency care, wildlife conservation and economic development through tourism.
What is the Poison Pill?
- The so-called “Poison Pill” was written into the Tribal-State Compact as a way to protect the exclusivity of gaming among Tribes and the investments needed to build facilities and generate revenues that would both pay back those initial investments and generate much-needed revenues for Tribal communities.
- Exclusivity ensured banks and other investors that gaming would be limited to Tribal communities, most of which are located far from urban centers and wouldn’t otherwise be economically viable based strictly on market conditions at the time.
- With exclusivity in place, Tribes can depend on a stable marketplace, invest in new and diverse economic projects, and continue to refine and improve their existing gaming facilities.
- The “Poison Pill” written into the Tribal-State Compact states that any change in State law, whether enacted by the State legislature or a vote of the people, that allows for an expansion of gaming off Indian lands that was not lawful on May 1, 2002, permits Tribes to offer gaming without limitation and without sharing revenues with cities, towns or the state as a whole.
- If the “Poison Pill” is triggered by commercial gaming interests such as Fantasy Sports or off-track betting in Arizona, it also means that Tribes no longer have any limitations on the type of games, number of slot machines, or the size and number of casinos they can operate. Tribes also no longer have to share revenues with the State of Arizona or nearby cities and towns. Revenue sharing currently averages about $100 million a year.
How does Tribal Gaming benefit Tribes in Arizona?
- With revenues from Indian gaming, Tribes are realizing the promise of IGRA by investing in their own communities. Tribal leadership is upgrading water and sewer systems and improving roads. They are fixing antiquated communications networks, building new housing and opening new schools. Looking to the future, they are making scholarships available to students to train their own teachers, doctors, nurses and lawyers, while at the same time, constructing new medical facilities and opening centers for children, youth and elders that are improving the lives of people today.
- In outlying counties, Indian casinos rank among the largest employers and are important vehicles for attracting out-of-county visitation. To all the Indian reservation economies, casinos bring long-sought revenues and jobs.
How does Tribal Gaming benefit Arizonans who aren’t Tribal members?
- Since 2002, Tribes have funded over a billion dollars to support education, trauma and emergency care, wildlife conservation and economic development through tourism. Gaming revenues have been shared with cities, towns and counties statewide and supported hundreds of non-profits and charitable organizations.
- In addition, the state has benefited from jobs created by this new growth industry. Because Tribal lands range from remote reaches of the state to busy, urban areas, the economic impact of this industry is felt statewide. Indian casinos are an important “C” for Arizona alongside copper, cotton, cattle and climate.
- Today, Indian gaming employment ranks among some large and influential sectors in the Arizona economy. For example, if the Bureau of Labor Statistics, which tallies employment by job type, tracked Tribal Gaming as its own category, it would rank Arizona Indian gaming employment between statewide mining and logging employment, and statewide employment engaged in the management of companies and enterprise. The comparisons make it clear that Indian gaming ranks among consequential sectors of the Arizona economy.
What is a Transfer Agreement?
- Transfer Agreements allow Tribes to lease their allotment of gaming machines to metro Tribes in exchange for revenues. These revenues help Tribes remain self-reliant and provide education, healthcare and infrastructure for their people. Programs assisting young people and elders benefit tremendously.
How much does Tribal Gaming contribute back to Arizona?
- Tribes share a portion of their revenues based on formulas within the Tribal-State Compact.
- As of April 2016, Tribes have contributed over 1.179 billion dollars with the State of Arizona
Do Tribes or Tribal Members pay taxes in Arizona?
- Yes, Tribal members are required to pay taxes
- All Tribal members pay federal income tax on all income, including on per capita payments. Tribal people pay FICA taxes, social security taxes, sales and other excise taxes. Only Tribal members who live and work on their own federally recognized reservations – not unlike soldiers and their families living on military reservations – are exempt from paying state income and property taxes. All others are required to pay the same taxes as any other Arizona citizen.
- Yes, Arizona casinos generate tax revenues
- Tribal governmental gaming creates jobs, increases economic activity and generates tax revenue both on and off reservation. Gaming operations employ both Tribal and non-Tribal people throughout the State. Second tier jobs are created through vendor agreements and the supply of a variety of goods and services.
- Tribal governments, however, are sovereign governments and sovereign governments do not tax one another. For example, the State does not tax the Federal government.
Who owns each Tribes’ casino?
- Tribes earned the right to operate casinos on their land. These properties are part of the enterprise operation of each Tribes’ own economic initiatives.
Who supports Tribal Gaming in Arizona?
- Tribal Gaming has enjoyed broad, bi-partisan support in Arizona since the Compacts were signed in 2002 but Governor Jane Dee Hull, the first female Governor of Arizona.
Is Tribal Gaming working in Arizona?
- Yes. Arizona’s Tribal-State Gaming Compacts are one of the most successful in the country.
- Indian gaming is the most successful resource for self-sufficiency that has ever worked for reservations. Indian tribes are governments and like city and state governments must provide services for their citizens. Tribes do not have a tax base, like other State and local governments, to provide revenue for services. Gaming has enabled tribes to have a dependable source of revenue to meet critical needs.
- Arizonans overwhelmingly support gaming that is limited and well-regulated and has proven to benefit Tribal people and communities.
- Nearby cities and towns, especially in rural areas, have also benefited from the jobs, infrastructure investment, visitor increases and hundreds of millions of dollars in grants and contributions Tribes have made.
- Further, as Tribal government spending addresses chronic reservation deficits in education, health, housing, safety, employment, and crime, the Arizona economy becomes more productive. When, for example, a single mother receives casino-supported daycare that enables her to be a breadwinner for the first time, the Arizona economy unequivocally grows. When casino profits close the longstanding gaps in Indian Health Service funding or raise the quality and quantity of reservation high school graduates, American Indian human capital grows—to the lasting benefit of the Arizona economy. In innumerable ways, this key feature of Indian gaming in Arizona helps do what a century of federal policy experimentation and private philanthropy could not: sustain economic growth on the reservations.
What happens to Tribal Gaming profits?
- Tribal gaming was created to help tribes create a strong, diverse economic base to provide services and infrastructure for their people. Unlike commercial gambling operations, Tribal casinos are operated by Tribal Governments and exist to fund critical government programs for tribal people living in tribal communities. Tribal leaders, like any other elected government officials, are held accountable for the use of these revenues through regular elections.
What do Tribes do with revenues from Tribal Gaming?
- Tribes, in some cases, use casino revenues to address decades of economic isolation. They are addressing health and education needs, housing shortages, water, heating and other infrastructure needs as well as providing for their young people and elders.
- Gaming is an economic lifeline that Tribes are also using to invest in new and different economic drivers and industries.
- Additionally, in contrast to privately owned companies whose owners may collect (and spend) their profits wherever in the world they reside, Tribal governments spend casino profits in state and will do so indefinitely. The tribes cannot outsource the work of the casino or their road programs; neither will they move their headquarters out of state. What’s more, Tribal government ownership concentrates the proceeds and economic development in some of Arizona’s poorest communities – to the great benefit of Arizona.
- Tribes also share a portion of gaming revenues with the State of Arizona. Since 2002, Tribal Gaming has contributed over $1.79 billion back to the State of Arizona. Funds benefit:
- Trauma Care
- Department of Tourism
- Wildlife Conservation
- Local Cities and Towns
- Learn more here.
Is Tribal Gaming regulated?
- Yes. Tribal governmental gaming is regulated on three separate and distinct levels: Tribal, State and Federal
- Tribal Regulation: The Tribal Gaming Commission provides primary oversight of gaming activities to ensure that operations are in compliance with local ordinances and the State-Tribal gaming compacts.
- State Regulation: The second level of oversight is the State of Arizona and the Arizona Department of Gaming (ADOG), who have financial and compliance audit responsibilities and enforcement authority, and vendor certification to ensure compliance with all aspects of the Tribal/State compacts.
- Federal Regulation: The third level of oversight the National Indian Gaming Commission, which oversees regulation of Indian Gaming, as, outlined in the Indian Gaming Regulatory Act.
- Other Federal agencies responsible for enforcing laws relating to Indian gaming include the Interior Department, the Justice Department, the FBI, the IRS, the EPA, the Secret Service and the Treasury Department’s Financial Crimes and Enforcement Network.