Native Americans won the right to run casinos thanks to cases like California v. Cabazon Band of Indians, 480 U.S. 202 (1987), and Seminole Tribe of Florida v. Butterworth, 658 F.2d 310 (5th Cir. 1981), and the Indian Gaming Regulatory Act ("IGRA") that such cases inspired. To generalize, U.S. law allows sovereign tribes to offer gaming services on their reservations, subject to three conditions:
- First and foremost, a reservation's host state must permit the particular sort of activities in question, even if under a very restrictive regulatory regime, rather than prohibiting and criminalizing them. In Seminole Tribe of Florida, for instance, the tribe successfully relied on the claim that Florida law allowed certain forms of bingo.
- Second, to judge from cases forbidding the sale of fireworks on reservations, and the illegality of Indians offering Internet gaming to off-reservation customers, a tribe must not exercise its sovereign powers so as to gut the effect of its host state's regulations. What happens on the reservation must, in other words, stay there.
- Third, as a matter of rhetoric if not hard law, it helps a tribe to emphasize that it has a long history of enjoying the same amusements that it offers its guests. Indian casinos thus often emphasize the role that games of chance traditionally played in the host tribe's culture.
Depending on the state and tribe, those three conditions might apply to a tribe offering recreational drugs, prostitution, and extreme fighting on its reservation. Thanks to Employment Division v. Smith, 494 U.S. 872 (1990), and 42 U.S.C. 1996a, for instance, states must permit the religious use of peyote, a traditional practice among some Native Americans. So long as a tribe administers that sacrament under controlled conditions, rather than by selling it for off-reservation use off, offering peyote would arguably qualify for the same sort of legal protections that have allow Indian casinos to thrive. Similar arguments might well apply to marijuana in many states (though here the case for traditional Indian use appears weaker than with regard to peyote), prostitution in Nevada and Rhode Island (though, again, the alleged "wife sharing" customs of some tribes do not quite equate to the same practice), and violent or even deadly sports among consenting adults.
According to Ambrose L. Lane, Sr.'s book, Return of the Buffalo: The Story Behind America's Indian Gaming Explosion 44 (1995), in 1979, California's Cabazon Band of Mission Indians considered cultivating marijuana and jimson week (a traditional Native American hallucinagen), only to set the idea aside. Beyond that, I've found no evidence that any tribe has considered pursuing the sort of legal strategy I've described. Given the large profits that offering drugs, sex, or extreme martial arts might garner tribes, however, and the competition that increasingly cuts into their gambling businesses, we might soon see many Native American Amsterdams.