Tribal government-sponsored gaming is a relatively new phenomenon dating to the late 1970s when a number of Tribes established bingo operations as a means of raising revenues to fund Tribal government operations. At about the same time a number of state governments were also exploring the potential for increasing state revenues through state-sponsored gaming. By the mid-1980s, a number of states had authorized charitable gaming, and some were sponsoring state-operated lotteries.
Although government-sponsored gaming was an issue of mutual interest,
Tribal and state governments soon found themselves at odds over Indian
gaming. The debate centered on the issue of whether Tribal governments
possess the authority to conduct gaming independently of state regulation.
Although many lower courts affirmed the Tribal view in the early cases,
the matter was not finally resolved until 1987 when the U.S. Supreme
Court confirmed the authority of Tribal governments to establish gaming
operations independent of state regulation provided that the state in
question permits some form of gaming. California v. Cabazon Band of
Mission Indians 480 U.S. 202 (1987).
Congress took up the issue of Tribal gaming and conducted a series
of hearings, ultimately culminating in the passage of the Indian Gaming
Regulatory Act of 1988 (Act). Embodied in the Act was a compromise between
state and Tribal interests. The states were offered a voice in determining
the scope and extent of Tribal gaming by requiring Tribal-State compacts
for Class III gaming, but Tribal regulatory authority over Class II
gaming was preserved in full. The Act further provided for general regulatory
oversight at the federal level and created the National Indian Gaming
Commission as the responsible agency.

Introduction To Tribal Gaming