Tribal gaming began in the 1970s, when certain Native American tribes used bingo as a way to earn money for their reservations. In 1988, the Indian Gaming Regulatory Act (IGRA) gave federally recognized tribes the ability to negotiate for casino gambling.

Ever since then, Native American gaming has spread across the US. Most states now feature at least one tribal gambling establishment.

Native American gaming has collectively fared well over the past few decades. Even so, there are a number of unfavorable myths surrounding tribal gambling.

Most of these myths center on the idea that tribes have unrestricted freedoms in comparison to commercial casinos. Some people even believe that Native American venues offer worse odds than commercial establishments.

Keep reading as I dispel seven of the most common myths surrounding Native American gambling.

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Myth #1: Native American Casinos Don’t Answer to Anybody

The most common misbelief about tribal casinos is that they create their own rules and don’t abide by federal or state guidelines.

This myth is grounded in the thought that Indian tribes are located on sovereign lands. But while their sovereignty does provide certain freedoms, tribes can’t just do whatever they want regarding casino gambling.

Dating back to the early 1800s, the US federal government has viewed Native American governments as having control over their members and lands. But tribal lands are also considered dependent nations, meaning they’re subject to the same laws set forth by Congress.

Considering that tribes are part of federal lands, they must negotiate gambling compacts with their local state governments. Once the two sides agree upon gambling standards, the US Department of the Interior approves the pact.

From here, the tribal gaming commission enforces the rules that are agreed upon by the involved parties. Therefore, Native American casinos are subjects to many of the same standards as commercial establishments.

A tribal casino can’t just alter slots payout percentages or makeup confusing table game rules as they go. They instead adhere to a reasonable agreement between the tribal gaming commission, local state government, and Department of the Interior.

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Myth #2: Tribal Casinos Don’t Pay Back as Much as Commercial Casinos

Many gambling jurisdictions require commercial casinos to release return to player (RTP) information on slot machines.

This info is commonly found in state gaming commission reports and listed by coin denomination. Here’s an example using figures from a 2017 Nevada Gaming Control Board report:

  • Penny Slots = 90.17% payback
  • Nickel Slots = 94.54% payback
  • Quarter Slots = 93.06% payback
  • Dollar Slots = 93.94% payback
  • $5 Slots = 94.16% payback
  • $25 Slots = 95.03% payback
  • $100 Slots = 93.21% payback

Furthermore, commercial gambling venues are required to offer a minimum slots payout percentage. Nevada casinos must deliver a minimum of 75% RTP, while New Jersey casinos have to offer at least 83% payback.

The goal of published RTP and minimum payout percentages is to ensure that casinos aren’t ripping off players. Likewise, gamblers will feel more comfortable when they know that there are payback standards.

Not all Native American casinos have to make their RTP publicly available. Additionally, they may not be required to meet state minimum RTP standards in some cases.

But this doesn’t mean that tribes are turning slot machine RTP down to 70% in an effort to crush players’ bankrolls. Instead, they offer competitive payout percentages to keep gamblers coming back.

Tribal casinos are like any other gambling venues in that they must offer decent RTP to avoid discouraging players. These casinos often feature anywhere from 90% to 95% payback, depending upon the coin denomination.

Here are RTP figures from Connecticut’s Foxwoods casino, which is owned by the Mashantucket Pequot Tribe:

  • Penny Slots = 89.88% payback
  • Nickel Slots = 90.58% payback
  • Quarter Slots = 91.95% payback
  • Dollar Slots = 93.45% payback
  • $5 Slots = 94.08% payback
  • $25 Slots = 96.16% payback
  • $100 Slots = 96.76% payback

In some respects, this RTP is better than what’s seen in Nevada casinos. The main point, though, is that most Native American casinos offer solid payout percentages to encourage more play and return visits.

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Myth #3: Any Indian Tribe Can Start a Casino

Another common myth surrounding Native American gaming is that any tribe can start a casino with enough finances and motivation. But the reality is that certain conditions must be in place for a tribe to open a gambling establishment.

First off, they must be legally recognized by the US government. Less than 560 tribes are federally recognized, which leaves out a number of Indian groups.

Secondly, NativeAmericans must own the reservation that supports their casino. Only around 200 tribes actually own their reservation, which further cuts down the pool of potential casino owners.

Native American casinos must also fall within the guidelines of the IGRA, which serves as the legal framework for Indian gambling.

The IGRA was created in 1988 to settle differences between state governments and tribal gaming interests. This legislation helped solve disputes such as a 1987 case between the state of California and the Cabazon Band of Mission Indians.

The Cabazon Band started a card room and bingo parlor on their southern California reservation to generate money. Golden State politicians attempted to shut down the parlor under the notion that it was illegal.

This case went to the Supreme Court, which ruled that the Mission Indians’ sovereignty made their gambling operation legal. Furthermore, California allows certain types of gaming, which prompted the Supreme Court to rule that the state can’t prevent sovereign reservations from doing the same.

The California v. Cabazon Band of Mission Indians opened the way for more tribes across the US to open gambling venues. States quickly became weary of the matter and lobbied Congress for commercial casinos and the taxation of reservation casinos.

This led to theIGRA’s passage, which is a compromise between states and tribes. The IGRA opens up good faith negotiations between state and tribal governments over legal gambling.

If a state doesn’t allow casino gaming, then they have every right to deny local tribes this liberty. On the other hand, a state can’t allow commercial casinos and simultaneously refuse to negotiate a tribal gambling pact.

Tribes in states like Utah, where all forms of gambling are legal, are unable to open casinos. They must wait until the state government becomes open to casino gambling— if it ever happens.

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Myth #4: Tribes Are Getting Filthy Rich from Their Casinos

Contrary to popular opinion, casinos are not instant gold mines for the owners. Native American gambling venues aren’t always as successful as people think.

In fact, some tribes have been forced to close their casinos due to low revenue. This scenario is a sad reality on reservations that are located in remote spots.

For example, the Santa Ysabel Tribe closed their casino in 2014 because of poor performance. The Santa Ysabel reservation is located deep in the California desert, approximately 40 miles from San Diego.

Just like commercial casinos, Indian venues must work hard to succeed. But where does this myth that tribal casinos are gravy trains come from?

The biggest culprit is mainstream news stories based on successful NativeAmerican gambling operations. Minnesota’s Shakopee Mdewakanton Tribe is the best example of a wealthy tribal gaming operation that has gained mainstream fame.

Featuring just 460 members, the Shakopee Mdewakanton own two casinos (Little Six Casino and Mystic Lake), which generate over $1 billion combined each year.

Shakopee members don’t even have to work, because they each receive an annual payout worth over $1 million. Given their vast wealth, the Shakopee Mdewakanton have donated $250 million over the years to help fellow tribes.

It’s easy to see why people would think that NativeAmericans are getting rich from casinos when reading these stories. But the fact is that the average Indian isn’t seeing a $1 million annual payout from their reservation’s casino.

Many reservations still have high poverty rates and low unemployment despite their casinos. For example, Oregon’s Siletz tribe has seen their poverty rate go from 21% to nearly 40% in recent years.

Part of this is because Native Americans are less motivated to work when/if they’re sharing casino revenue. But most revenue sharing doesn’t afford tribes a lucrative lifestyle.

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Myth #5: Native American Casinos Beat Up Advantage Players

Las Vegas used to be run by mobsters, who would occasionally beat up advantage gamblers like card counters and hole carders.

Vegas thankfully become more commercialized in the 1980s, and the mob was pushed out. This has made Sin City a much safer place for advantage gamblers.

But while Vegas may be considered a safer spot to count cards, Native American reservations are not. The primary reason for tribal casinos’ brutal reputations is that they’re not always subject to the same laws as commercial casinos.

Isolated incidents also play into the stereotype that you’ll be beaten for counting cards in a tribal gaming venue. For example, the Las Vegas Sun covered how Arizona gamblers claimed mistreatment at the Mazatzal Casino (Tonto Apache Tribe).

Rahne Pistor, who was a plaintiff in the case, testified that tribal officers failed to identify themselves and stole his money during a search.

“I simply had won more money than they liked,” Pistor recalled. “They kidnapped me, handcuffed me, forced me into an isolated backroom in the casino and physically stole whatever money they could out of my pocket.”

The plaintiffs won this case, and a federal judge cited that “sovereign immunity did not apply because tribal officials involved were named in their individual capacities.”

These types of stories are found across the internet via second and third-hand accounts. But you’ll find similar horror stories involving commercial venues too.

Furthermore, I’ve seen stories where advantage players were treated perfectly fine after being caught. “Firestarter,” a WizardofOdds forum user, was treated normally after being identified as an advantage player by tribal casino officials.

“For what it’s worth, I was just caught at one this year,” Firestarter wrote. “I received no warning or backing off. Backroomed [to retrieve all belongings] and banned for life.

“I asked the guy what he would do if I just ran off, and he mumbled something about being uncooperative, but I didn’t get the impression that he would have tackled me or drawn his weapon.”

George Henningsen, chairman of the Pequot gaming commission, believes that preconceived notions on tribal casinos treating pro gamblers roughly are unfair. Henningsen told the Las Vegas Sun that only the worst cases share their stories.

Above all, Native American casinos have a reputation to maintain just like commercial establishments. Therefore, it doesn’t bode well for their image when complaints arise regarding mistreatment of players.

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Myth #6: Tribal Casinos Only Offer Bingo and Poker

Many state-tribal gaming compacts only allow Native American casinos to offer Class II gaming. This category refers to bingo, pull-tabs, punchboards, and non-house banked card games (e.g. poker).

When a gambler hears that a tribal casino only offers bingo, pull-tabs, and poker, they may dismiss the idea that they’ll be able to play slot machines. This reputation can be damaging to tribal gaming establishments, because slots are the most popular games in American casinos.

But many tribes have found a loophole in the Class II distinction that allows them to offer slot machines. The only catch is that these slots have to determine results just like a bingo game.

Each slot machine has a bingo card-like program with numbers on it. A central server will “call” numbers and award prizes to the machines that form “winning lines.”

Here’s an example on how Class II slot machines distribute prizes:

  • 500 payouts in a cycle.
  • 1 jackpot.
  • 10 payouts worth 1,000 coins.
  • 50 payouts worth 100 coins.
  • 70 payouts worth 10 coins.
  • 369 payouts worth 1 coin.

The main difference between a Class II and Class III slot machine is that the former offers a set number of prizes. The pool of available prizes doesn’t reset until the game is over, much like a bingo game.

Class III slots, on the other hand, use a random number generator (RNG) to determine when each prize is paying. Therefore, you could technically win the jackpot on back-to-back spins.

You can’t really tell the difference from a Class II and Class III slot machine in terms of appearance. They both offer reels, graphics, animations, and sound effects.

In some states, Native American casinos are allowed to offer both Class II and Class III gaming. Oklahoma is one such example, because their casinos can feature any type of slot machine and house-banked table games like blackjack, craps, and roulette.

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Myth #7: Native American Casinos Don’t Pay Taxes

One more misconception about tribal gaming establishments is that they’re not required to pay taxes. But this matter is more complicated than the simple belief that Indian casinos aren’t taxed.

American Indians must pay federal income and capital gains taxes. However, they’re exempt from taxes on revenue generated on the reservation.

The latter means that casinos located on sovereign reservations don’t pay federal taxes. And this is where much of the myth that tribal casinos aren’t taxed comes from.

First off, Indian gaming compacts can require a tribe to share casino revenue with their home state. Even if they don’t share revenue, Native American gaming venues still contribute in other ways.

Perhaps the biggest benefit that tribal casinos provide is employing hundreds or even thousands of locals. And any employee who lives off-reservation lands is subject to state and federal taxes.

Successful tribes also offer charitable contributions to other Native Americans, such as the Shakopee Mdewakanton covered earlier.

So while not all Native American casinos pay taxes, they deliver other benefits in the form of employment and charitable contributions to other tribes.

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Tribal casinos have become an important part of the American gambling landscape. Many of these gaming venues have experienced success and helped pull associated tribes out of considerable poverty.

But along with this success has come detractors and misbeliefs. Native American casinos can be adversely affected when gamblers believe these myths.

Perhaps the most important lesson here is that tribal gambling establishments are regulated in many ways. They must first negotiate a compact that both their local state and the US Department of the Interior agree upon.

From here, the tribal gaming commission presides over the reservation’s casino(s) to ensure that they abide by the pact’s terms. Subsequently, Native Americans can’t change RTP on whims, rip off players, and rough up advantage gamblers.

Other common myths revolve around financial aspects, such as tribes getting rich off their casinos and not paying any taxes. These two misbeliefs create the impression that tribes are greedy and refuse to share their riches.

This isn’t true, though, because not every Native American casino makes vast fortunes. Some struggle to stay afloat due to their remote locations and/or commercial casino competition.

As for paying taxes, some tribal gaming compacts require casinos to share revenue with states. Even the tribes that don’t share revenue help in other ways, including employment, charitable contributions, and drawing tourists.

Considered everything, Native American casinos aren’t tremendously different from commercial venues. The myths surrounding tribal casinos are to blame for people viewing them in a different light.

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