For years American’s have been going to Las Vegas for “casino” gambling. From a desert 50 years ago, Las Vegas sprang up to become the gaming and entertainment capitol of the United States, if not the world. When a gambler thinks of “gaming” they automatically think of the types of games and slot machines you can find there. Indian Gaming on the other hand, is far different. Sometimes travelers or first time visitors to Indian gaming establishments are surprised not to find a Las Vegas type casino. Welcome to Indian Gaming Class I, II or III.

American Indian gaming exploded on the scene in 1988 with the adoption by Congress of the Indian Gaming Regulatory Act, although gaming in some format was already taking place in a few locations in Indian country. While casino gaming is the norm in Las Vegas, gaming in Indian Country takes many different shapes and styles. Las Vegas type slot machines and table games are not allowed in many states and Indian Gaming locations.  Instead the Indian gaming market is governed by Federal regulation that defines the business into three distinct types, Class I, II or III.

Class I gaming usually includes traditional forms of Indian gaming which have historically been connected with tribal ceremonies or other celebrations. This “class” system has caused a lot of confusion and misunderstanding about what types of games a person can play or find in an Indian casino. No surprise when a gambler, new to Indian gaming goes to a casino and finds electronic games, but no table games and no real slot machines. Most likely you are in a Class II facility. But what does that mean? How is this different from Class II and why can I not find Las Vegas style casino gaming in my state? Confused now? A lot of the anxiety and questions about Indian gaming comes
from the fact that many on both sides of the issue do not understand the definitions of what exactly constitutes Indian Gaming, especially when it comes to the differences between Class II and Class III gaming. Indeed, even the federal agency in charge of defining Class II and Class III gaming (the National Indian Gaming Commission) has had difficulty defining what can be Class II and what can be Class III, and have had to rely on the federal courts to aid them in those definitions.

The terms “Class II” and “Class III” come from the Indian Gaming Regulatory Act, 25 U.S.C. § 2703(7), (8) (2005). The National Indian Gaming Commission (“NIGC”) has used the terms “Class I”, “Class II”, and “Class III” to categorize the types of “permissible” gaming taking place in Indian country.

The definition for “Class III” is simple in its terms: “All forms of gaming that are not class I gaming or class II gaming.” (25 U.S.C. § 2703(8) (2005)). However, it has often proved difficult in its application. Mostly because of the fuzziness of the definition of “Class II” gaming. Many would argue that the definitions of Class II gaming are straightforward; however, the controversy often
surrounding the issue has shown otherwise.

Generally speaking, “Class II” gaming is defined as the following: Bingo, or if played in the same location as Bingo, pull-tabs, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo, provided that these games other than Bingo are authorized by the laws of the State, or are not expressly prohibited by the laws of the State. (25 U.S.C. § 2703(7) (2005)). The definition also allows for Bingo to be in electronic format, whether a computer or other technological aid is used in playing the game. To be fair, this is really where the controversy begins to apply to “Class II” gaming definitions. The term “technological aid” has been interpreted by those in the gaming industry to mean games that look and feel a lot like slot machines and other typical “Las Vegas” type machines, but which are, in fact, a “supped up version” of Bingo. The NIGC, however, and particularly, the U.S. Department of Justice, has taken great issue with this interpretation and often argues that if it looks like a slot machine and plays like a slot machine it is not “Class II” gaming.

What does it matter if games in Indian country are “Class II” or “Class III”? If a game is considered “Class III” it requires a compact or agreement with the State where the gaming is taking place in order for the game to be considered legal (And more often comes with a nice little monetary bonus to the State for allowing” the gaming). “Class II” gaming does not require such a compact or agreement.

The U.S. Justice Department is attempting to clear up this controversy in favor of their own view by submitting amendment language to the Johnson Act, 15 U.S.C. § 1171 (the Act which  governs illegal gaming within the United States) which would prevent “Class II” gaming devices from even being similar in appearance to a slot machine, and would require that the players take a more active role in playing the game, rather than allowing for the machine to do most of the work. These proposed amendments would also impose harsher punishments for violators. Opponents argue that it will only cause more litigation and will not solve anything.

Whatever one’s personal views may be, and whatever changes may be made to the law, “Class II” and “Class III”  definitions will be the subject of regulatory review and lawsuits for years to come. You can still enjoy your trip to an Indian casino. Just ask in advance what type of games you will find and you will not be surprised.

The Busey Law Group, based in Oklahoma City, OK is a Native American owned law firm that is experienced in Indian Law, Indian gaming matters, commercial law, federal regulation and government contracting.