In the early years of Indian gaming, most tribes used the money to help provide basic services the casinos themselves were a source of employment in areas where unemployment was traditionally very high. The NIGRA requires the funds to be used to promote tribal economic development and self-sufficiency and for tribal services and benefits.
Economic development was a requirement of the enabling legislation. However, the majority of the profits from Indian gaming go to fund tribal governments and to other tribal businesses. In those cases, tribal members pay federal taxes on their income. Some tribes distribute a portion of the profits, also, in the form of a per capita payment. Indian casinos do not pay a state tax as such, although the tribes pay the state and local governments a fee based on the casino revenue. Commercial casinos pay a state tax based on the gross gaming revenue and distribute their after-tax profits to their individual shareholders and owners, and the individuals pay state and federal taxes on that income. Tribal casinos are owned by Indian tribes. Commercial casinos are owned by corporations or individuals. The major difference between the two forms of gaming is the ownership. Indian gaming and commercial casino gaming are governed by a different set of laws and regulations, but within each state, the conditions are comparable.