“Another aspect of the tribal-state compact process that the regulations sought to address was the longstanding impacts of the Supreme Court’s 1996 ruling in Seminole Tribe v. Florida. That case broke the careful balance in the tribal-state compacting process that Congress established through IGRA. Noting congressional intent, the background to the final rule notes that IGRA expressly prohibits a state’s imposition of a tax, fee, or other assessment on tribal governments. No government in the U.S. is permitted to directly impose a tax on another government. IGRA does, however, permit states to negotiate for the reimbursement of the costs of regulating a tribe’s Class III gaming activity. The rule acknowledges that compacts may include “revenue sharing in exchange for a state’s meaningful concessions resulting in a substantial economic benefit for the tribe.”
