The three classes were established by the Indian Gaming Regulatory Act of 1988 as a framework for governing Indian gaming. Essentially, they define what tribes in a given jurisdiction can and can't offer in the casinos on their reservations. The distinctions have also been adopted to describe gaming outside the tribes, such as in card rooms.
•Class I gaming is "traditional Indian gaming," which may be part of tribal ceremonies and celebrations, and social gaming, for minimal prizes. In this instance, regulatory authority is vested exclusively in tribal governments and is not subject to the Act's requirements.
•Class II gaming is defined as the game of chance commonly known as bingo (whether live or electronic) and -- if played in the same location as the bingo -- pull tabs, punch board, tip jars, instant bingo, and other games similar to bingo. This class also includes non-banked card games, (i.e., those that are played exclusively against other players rather than against the house or a player acting as a bank), including poker. Slot machines are specifically excluded from this class of games.
As far as the regulatory framework goes for class II, tribes retain their authority to conduct, license, and regulate this type of gaming, so long as the state in which the Tribe is located permits it and the Tribal government adopts a gaming ordinance approved by the National Indian Gaming Commission (NIGC). Tribal governments are responsible for regulating Class II gaming, with Commission oversight.
•Class III gaming has a broad definition, basically encompassing all forms of gaming that are neither Class I nor II, including those commonly played at casinos in Nevada, Atlantic City, and Connecticut, for example, including slots, blackjack, craps, roulette, and sports betting.
Before a Tribe may lawfully conduct Class III gaming, certain conditions must be met, including: its legality in the state in which the tribe is located; a regulatory framework approved by the Secretary of the Interior; and the adoption of a Tribal gaming ordinance that has been approved by the Chairman of the Commission.
Due to the key word in the definition of Class II gaming -- bingo -- Class II slots/video poker machines effectively have to be bingo games in disguise. Each time you spin, the system plays a game of bingo, and the results of that game determine which symbols line up on the reels.
The concept might sound strange, but as Anthony Curtis once wrote in a column on the subject, "Believe it or not, this isn't really important in your decision as to whether or not to play these slots. Just as a bingo game can be rendered as loose or tight as the operators want it to be based on what percentage of the collected player fees they return in prize money, so too can Class II slot returns be programmed. And similar to most gambling situations, the level of competition more than anything else determines what those returns wind up being. If you play games in non-competitive jurisdictions, the returns will be tighter, regardless of how they're determined. So class really doesn't matter, at least where it comes to the slots."
On the other hand, we did read -- and perhaps someone out there can confirm for us -- that, unlike in jurisdictions such as Las Vegas that offer regulated Class III slot games, no public information is available concerning the payback percentages on any gaming machines in Florida’s Indian casinos, leaving the player in the dark about the house edge. If correct, this would make the class distinction far more significant.
Also important is the fact that even if a jurisdiction does provide payback information, Class II video poker machines are not quantifiable in the manner that Class III games are. For example, the machine faceplate may indicate 9/6 Jacks or Better and the payouts for the full house and flush may be "9" and "6," respectively, but the bingo-game return might be altered so that those combinations are hit less frequently and you have no way of knowing that.
