Tribes bet on gaming: Indian gaming has allowed a few tribal governments to strengthen their communities and provide for their people. And it often helps states and local governments as well.

• Author: Zelio, Judy

Editor's note: This is the last in a series on gambling. See "Gambling on Gaming" in the January magazine and "Counting on Gambling" in the February issue.

The 600-member Rincon Tribe in California opened a high-rise hotel-casino outside of San Diego in December. The tropical-themed 180-seat restaurant, deluxe spa and a presidential suite are designed to attract big gamblers and vacationers alike.

But all is not well in paradise. The county wants to levy a 9 percent occupancy tax on the hotel, managed by Harrah's Entertainment, Inc. Harrah's owns or manages 25 casinos in the United States. The tribe maintains that the county's efforts to tax the tribe are unlawful. A resolution is not in sight, although the hotel-casino is open for business along with 52 other tribal casinos in California.

The legal complexities of gambling taxation, management and regulation are magnified when tribal governments are involved. A vast body of federal law, developed over the past 200 years, helps answer a host of questions associated with the entry of Indian tribes into the gaming business. For example, it's pretty well-established that tribal governments are not subject to state and local taxation, nor are the businesses tribal governments own and operate. But gambling-related businesses that involve outside partners and management firms complicate the already tangled relationships among states, tribes, local governments and the private sector. The legal questions, as Harrah's Rincon hotel-casino demonstrates, become harder to answer.

It's been nearly 17 years since Congress approved the 1988 federal Indian Gaming Regulatory Act (IGRA) that provides the legal guidelines under which tribal gaming can operate. A tribe may conduct Class II gaming (bingo, for example) without involving the state. But to legally operate Class III gaming (slots and blackjack, for example), a tribe must have a compact or agreement with the state detailing how the tribe will conduct the gaming, including types of games and regulation.

Since the act's adoption, more than 250 tribal governments out of approximately $60 have launched gambling enterprises ranging from card rooms to satellite bingo to full-fledged casinos. Some are Class II operations and some are Class III.

"Tribal government gaming has been a great asset to tribal economies and one of the few successful economic development tools in Indian country in over 200 years," says National Indian Gaming Association Chairman...