Sole Proprietary Interest Under IGRA: Lessons From Catawba and SkyBoat

The sole proprietary interest requirement in the Indian Gaming Regulatory Act is one of the least-discussed provisions in the statute, yet it shapes how nearly every tribal casino is financed and developed. The Catawba Nation's experience with its Two Kings Casino in Kings Mountain, North Carolina, offers a concrete illustration. In 2022, the National Indian Gaming Commission found that the tribe's development contract with its former partner, SkyBoat Gaming, violated federal law because SkyBoat held too much control over the project. The tribe later settled with SkyBoat in May 2024, and the project moved forward with a different management arrangement.

This analysis uses that history to explain what the requirement means, how the NIGC evaluates contracts, and what tribes and their partners can learn. It is a discussion of publicly reported facts and general legal principles, not a characterization of any party's motives.

What the requirement says

IGRA declares that a principal purpose of the law is to ensure that the tribe is the primary beneficiary of its gaming operation. To that end, the statute requires that a tribe have the sole proprietary interest in, and responsibility for the conduct of, any gaming activity. Outside parties can help build and run a casino, but they cannot take ownership of it. Our explainer on IGRA management contracts covers the approval process, fee limits and term limits that apply when a company manages an operation.

A recurring problem is that a contract that is labeled a development, consulting, or lease agreement can function as a management contract if it gives an outside party significant authority over gaming operations. Under the NIGC's framework, agreements that effectively confer management responsibility require the Commission's approval, and agreements that give outsiders ownership-like control can be void. Because a tribe borrowing to build a casino often relies on partners with capital, the line between assistance and control is where disputes arise.

The Catawba sequence

Public reporting describes the sequence as follows. The tribe's Kings Mountain project, planned as a $700 million permanent resort of roughly two million square feet with nearly 2,000 jobs, was initially developed with SkyBoat. In 2022 the NIGC concluded the development contract violated federal law because of the control SkyBoat held. In early May 2024, the tribe settled with SkyBoat, with terms not disclosed, removing the company from the project. Delaware North was named to develop and manage the resort, subject to NIGC approval of the contracts, and construction began that summer on a first phase with a later hotel and larger gaming floor.

Disputes with other parties followed, including litigation we have covered in our report on the Two Kings developer trespass lawsuit. Readers can follow the project's progress through our coverage of the phase one opening and the permanent resort groundbreaking.

Lessons for tribes and partners

Several practical points emerge, none of them unique to Catawba. First, contract labels do not control; function does. A developer that sets operating policy, controls bank accounts, or can block major tribal decisions may be exercising management authority regardless of what the document is called. Second, early review matters. Submitting agreements to the NIGC for review before construction commits capital is far less costly than unwinding them afterward. Third, financing structures need the same scrutiny, since lenders and landlords sometimes seek protections that edge into control. Our analysis of limited sovereign immunity waivers and the discussion of trust land collateral address adjacent issues.

Fourth, the economics of outside capital are changing. As investors, REITs and operators play larger roles in tribal projects, the number of agreements that sit near the line increases. Our piece on outside capital and tribal resort financing explores how that landscape is evolving, and the Legal Guide offers a primer on the statutory framework.

A fair reading

It would be a mistake to treat the requirement as hostile to partnership. Tribes have always needed expertise, capital and operational know-how, and many management relationships have succeeded within the rules. The purpose of the provision is to keep the benefits and the authority with the tribe. When a contract is structured so that they remain there, the arrangement is likely to withstand review; when it is not, the consequences can include voided agreements, delays, and expensive settlements.

For anyone evaluating a tribal development, the question to ask is simple: who ultimately decides, and who ultimately benefits? The answer to both should be the tribe.

Finally, the history is a reminder that regulatory review is a process, not a single event. The NIGC's authority extends across the life of a project, and agreements amended after approval can need fresh review. Tribes that treat compliance as an ongoing discipline, with counsel, tribal gaming regulators and finance teams coordinating, are generally better positioned than those that treat it as a one-time approval to be obtained before groundbreaking.