Vegas is well-regulated, but when you move outside that realm, things get a bit more loosely-defined.
I spent a couple of years in the mid-2000s working in the edges here, so I have a bit of knowledge. Note: I've been out of this industry for at least 15 years, so some of my knowledge might have aged, but I'm fairly certain that it's still true in the general sense.
First, under federal regulations, there are three classes of gambling. First, class I, which is basically, "I make a wager with you over the outcome of a sporting event". So if I'm playing golf with you and I bet you $10 a hole on outcome, that's class I. It's not regulated at federal level, and not generally regulated at state level.
The next class is Class II. This covers things like raffles, and mid-week church bingo. There are some limits, but it's not regulated by the states generally, and not by the feds at all.
Class III is what we think of as traditional gambling. Table games, traditional slot machines, etc. This is absolutely regulated by the states, and only allowed if the states allow it. This is what your Vegas and Atlantic City casinos operate under.
But there are Indian casinos outside of this in these markets operating. How do they operate, you ask? The simple answer is, if the games are operating as Class I or (more likely) class II games, the states have no say in them. And it's very easy to make a lotto drawing, or a bingo card, appear as a slot machine play. All random wins are basically equivalent to each other. If you go to an Indian casino, and you want to play a slot machine, but it's requiring you to wait on another player, you're dealing with a class II machine.
What about class III? Well, states are allowed to negotiate compacts with the various Native American tribes where they allow them to conduct class III games. A number of states have done this. This allows them to run, say, blackjack and poker, as well as slot machines that don't fall under class II. Interestingly, in a lot of jurisdictions, you're still basically following the ideas of class II, but just not requiring competition. So if you go to a casino in Oklahoma, you'll see that you are (most often) playing a game of instant bingo on each spin, or possibly a game of instant lotto on each spin. Because that's what the compact between the state of Oklahoma and the tribes there allows.
But there are still loopholes that allow you, in some jurisdictions, to run slot machines outside of these provisions. Let's say, you're allowed to run raffles that allow up to a $1000 prize on a $1 entry. These are just numbers to use to illustrate the concept, and they vary state to state. So I set up a slot machine that you pay $1 a spin, which is an entry in a lotto that pays maximum $1000, and after the total number of tickets allocated is depleted, will pay the house 10%. Perfectly legal, though local law enforcement in the bible belt in the south may disagree. I've coded a number of systems that implemented exactly this.
Other jurisdictions may allow you to have prizes up to, say, 25x the entry on machines, to allow the legality of the claw machines. This can also be (ab)used to make slot machines.
> If you go to an Indian casino, and you want to play a slot machine, but it's requiring you to wait on another player, you're dealing with a class II machine.
This is all really interesting, but I don't think I follow on this point (and I'd like to understand!)—are you saying that two players are playing on different machines, but the second machine can't operate until the first is done? Are they relying on each other's outcomes to calculate odds or something like that?
Exactly. There is a server which is drawing bingo balls, against a card. Someone is going to eventually win. So if there is only one player, you will eventually win.
You can actually set up a situation where one player is guaranteed a win, which is why the systems will require at least two players.
I spent a couple of years in the mid-2000s working in the edges here, so I have a bit of knowledge. Note: I've been out of this industry for at least 15 years, so some of my knowledge might have aged, but I'm fairly certain that it's still true in the general sense.
First, under federal regulations, there are three classes of gambling. First, class I, which is basically, "I make a wager with you over the outcome of a sporting event". So if I'm playing golf with you and I bet you $10 a hole on outcome, that's class I. It's not regulated at federal level, and not generally regulated at state level.
The next class is Class II. This covers things like raffles, and mid-week church bingo. There are some limits, but it's not regulated by the states generally, and not by the feds at all.
Class III is what we think of as traditional gambling. Table games, traditional slot machines, etc. This is absolutely regulated by the states, and only allowed if the states allow it. This is what your Vegas and Atlantic City casinos operate under.
But there are Indian casinos outside of this in these markets operating. How do they operate, you ask? The simple answer is, if the games are operating as Class I or (more likely) class II games, the states have no say in them. And it's very easy to make a lotto drawing, or a bingo card, appear as a slot machine play. All random wins are basically equivalent to each other. If you go to an Indian casino, and you want to play a slot machine, but it's requiring you to wait on another player, you're dealing with a class II machine.
What about class III? Well, states are allowed to negotiate compacts with the various Native American tribes where they allow them to conduct class III games. A number of states have done this. This allows them to run, say, blackjack and poker, as well as slot machines that don't fall under class II. Interestingly, in a lot of jurisdictions, you're still basically following the ideas of class II, but just not requiring competition. So if you go to a casino in Oklahoma, you'll see that you are (most often) playing a game of instant bingo on each spin, or possibly a game of instant lotto on each spin. Because that's what the compact between the state of Oklahoma and the tribes there allows.
But there are still loopholes that allow you, in some jurisdictions, to run slot machines outside of these provisions. Let's say, you're allowed to run raffles that allow up to a $1000 prize on a $1 entry. These are just numbers to use to illustrate the concept, and they vary state to state. So I set up a slot machine that you pay $1 a spin, which is an entry in a lotto that pays maximum $1000, and after the total number of tickets allocated is depleted, will pay the house 10%. Perfectly legal, though local law enforcement in the bible belt in the south may disagree. I've coded a number of systems that implemented exactly this.
Other jurisdictions may allow you to have prizes up to, say, 25x the entry on machines, to allow the legality of the claw machines. This can also be (ab)used to make slot machines.