May 5, 2020 Tribal, Interview

The importance of class II gaming

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Russell Witt, Director of Central Determinate Gaming at Incredible Technologies, explains why he believes class II gaming is more important than ever. This article was originally published in the March/April edition of Gaming America.

Tribes across the country have been successfully operating traditional forms of bingo (i.e. live call or session bingo, tip jars, or punch boards) for more than 50 years. In the late 1970’s, the Seminole Tribe of Florida opened the first ‘high stakes’ bingo hall offering larger prizes and bigger game sessions. The success of the Seminole’s high stakes bingo games led to the famous Cabazon decision in 1987 which set the stage for the Federal Government to pass the Indian Gaming Regulatory Act (IGRA) of 1988. This became the regulatory framework for tribal gaming as we know it today. IGRA defined the three classes of gaming that tribes could operate; most notable being that the tribes were the primary regulators of all class II gaming activity.

The Cabazon decision showed that tribes have the sovereign right to operate class II gaming without interference from state government. Class II gaming is only subordinate to the federal government, yet most tribes fail to see the benefits in the operation of class II gaming systems. Many perceive the addition of class II gaming to a class III gaming floor too difficult or too steep of a learning curve. Most of these observations or declarations are made based on preconceived notions of what class II games looked and played like in the past, or a lack of understanding of class II gaming systems.

With many traditional class II manufacturers having merged with or been acquired by major traditional class III manufacturers, tribes will continue to see an explosion of product and hardware innovations on an unprecedented scale. Incredible Technologies has observed the changes and maturity of the class II market and made the strategic decision to enter the class II space. After years of success in class III jurisdictions and forming partnerships with valued tribal customers, entering class II marks a commitment to tribal sovereignty and success. The products and technologies being dedicated to class II development, spanning many gaming manufacturers, are unprecedented.

What does this mean for the tribes? Access to each manufacturer’s latest and greatest titles and hardware platforms available in class II. Many of the titles that tribal casino customers know and have grown to love in class III are being made available in class II. Not only do tribes now have unprecedented access to hardware and software options, but the gap that existed between class II and class III game performance in the past has narrowed. In some cases we’re seeing class II product actually outperform class III in mixed use markets. The shift is monumental and tribes should be positioned to take full advantage of these new opportunities.

Today more than ever we are witnessing states and tribes locked in battles over gaming revenue. The most notable example is the current battle in Oklahoma between Governor Stitt and the gaming tribes. Many tribal casinos in Oklahoma are operating up to 50% class II games on their casino floors. Oklahoma represents the largest percentage and number of class II games in the country. The tribes’ commitment to class II is one of the main reasons they can stand united against the state and serve as a shining example of the true power of class II.

Class II is entering a true renaissance period where tribes will reap the benefits of technologic advancements, feature designs and revenue performance the likes of which have never been seen before. This is not your father’s class II!

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