In 1987, the U.S. Supreme Court realized that the Native American tribes were sovereign political entities. This allowed them to operate gaming facilities without state interference and regulation. Upon realization, in 1988, the Congress passed the Indian Gambling Regulatory Act. The act has set the terms for Native American tribal entities and empowers Indian tribes to operate casinos and bingo parlors.

These provisions led to immense growth of tribal casinos exploded. At present there is an estimated 400 Indian casinos spread over more than half the states in the country. A recent study has revealed that gambling revenues from Indian tribes have increased from a mere $2,000 in 1999 to more than $7 million in 2004.

The purpose of allowing tribe-operated casinos was to provide a means of income for Native American communities. It was intended to support economic development for the native tribes. In some cases, these ventures have been very profitable. A number of tribal governments have been able to use casino-funded revenues to provide public services, building schools and infrastructure.

Critics however, argue that the initial purpose of allowing Indian Casinos has been defeated in some places. Rather than being a revenue source to allow natives to govern themselves, the provision has allowed a lot of political influence. Numerous incidents have been reported regarding illegal reservation practices. People and business concerns have been known to acquire native status in order to operate casinos. This has directly reduced native earnings in a number of places.

In recent times Indian casinos are being subjected to a lot of scrutiny and FBI interference. This is being done in order to control the flow of revenue. In most cases, instead of benefiting the poorer natives, the revenue generated is being transferred to dubious investors. This has not helped the poorer native Indians financially at all.