In 1988, to clarify the rights of state governments and federally recognized American Indian tribal governments when it comes to gambling activities, Congress passed the Indian Gaming Regulatory Act, or IGRA. Among other things, IGRA divides gambling into three classes of games and sets out regulatory responsibilities for the tribal, state, and federal governments.

Class I Games

Class I games are described in IGRA as social or charitable games, such as bingo nights sponsored by churches or fire departments, where prizes have minimal value, and social, traditional; or ceremonial games conducted by tribes as part of their cultural activities. Many states have laws that limit charitable casino gaming in terms of admission fees, total prize pools, frequency, and other factors. Tribal Class I games are regulated by the tribes themselves; the states have no authority to restrict or regulate Class I tribal gaming.

Class II Games

Class II games are those in which you play against other players instead of against the house. Generally, there are no government-imposed limits on entry fees or prize pools. High-stakes bingo, poker clubs, and card rooms where the operator does not “bank” the games are all Class II operations. Pull-tabs and scratch-off tickets — especially these types of games offered at tribal gaming facilities or retail outlets — also are considered Class II games. At tribal gaming facilities, such as bingo halls and card rooms, the tribal government and the federal government are responsible for regulating and ensuring regulatory compliance of the games.

Class III Games

Class III games are all games that don't fit the definitions of Class I or Class II games. Typically, Class III games pit the player against the house, or casino operator. Blackjack is a Class III game because your opponent is the dealer, or the house. Poker is not Class III because your opponents are the other players; the dealer is simply an employee who facilitates the game.

Virtually all table games and slot machines in both bricks-and-mortar establishments and online casinos are Class III games and are subject to extensive regulation and oversight by various levels of government. Some electronic bingo games, which look like their slot machine cousins, are designated as Class II games because of the way the game is structured. But in most cases, slot machines — whether they're the traditional one-armed bandits or the new-fangled cashless gaming machines — are considered Class III games.

Tribal casinos are governed by legally binding agreements, called “compacts,” between the state and tribal governments, with approval of the federal government. These compacts spell out everything from background checks and licensing requirements for employees to the way games are run, minimum payouts, and other minute details. As of this writing, there are 178 tribal-state gaming compacts in force in the United States, involving twenty-three states and 160 tribes.