What Is California's Revenue Sharing Trust Fund? A Guide
How the nation's largest tribal gaming market spreads casino wealth to tribes with little or no gaming of their own.
California is home to more tribal casinos than any other state, but dozens of the state's federally recognized tribes operate no gaming at all — or run only small operations. A mechanism built into California's landmark 1999 tribal-state compacts ensures those tribes still share in the wealth that gaming generates: the Revenue Sharing Trust Fund, or RSTF. For anyone trying to understand how gaming revenue is redistributed across Indian Country, the RSTF is one of the clearest and most consequential examples in the country.
The idea is simple in principle and carefully engineered in practice: tribes that operate casinos help fund tribes that do not, so that the benefits of gaming are not confined to the nations lucky enough to sit near major population centers.
What the RSTF is and who it pays
The Revenue Sharing Trust Fund was established through the tribal-state compacts California negotiated in 1999. Its purpose is to provide payments to "non-compact" tribes — those that operate no gaming, or fewer than 350 slot machines. Each eligible tribe is entitled to up to $1.1 million per year from the fund, distributed by the state gaming agency on a quarterly basis.
That $1.1 million figure is deliberate. It is meant to give every qualifying tribe a meaningful, predictable stream of governmental revenue — money that can fund health care, housing, education, administration and other services that gaming tribes pay for out of casino proceeds. For a small tribe without a casino, it can represent a substantial share of the government's annual budget.
Where the money comes from
The RSTF is funded by the gaming tribes themselves. Under the 1999 compacts, tribes that operate gaming machines pay license fees tied to the number of devices they run, and those fees flow into the trust fund. In effect, the tribes with the most successful casinos underwrite a baseline of governmental revenue for the tribes with little or no gaming — a redistribution negotiated among the tribes and the state rather than imposed from outside.
The RSTF turns a competitive industry into a cooperative one: the strongest gaming tribes help guarantee that no federally recognized tribe in California is left entirely outside the gaming economy.
The Special Distribution Fund backstop
Because the number of eligible non-compact tribes and the flow of license fees do not always line up perfectly, the system includes a safety net. If the RSTF does not collect enough to pay every eligible tribe its full $1.1 million, California law requires that the shortfall be made up from the Special Distribution Fund (SDF), a separate account also fed by tribal gaming payments. The SDF was created to mitigate the local impacts of tribal gaming — funding services in communities near casinos — and to shore up the RSTF when needed.
Together, the RSTF and SDF form a two-part structure: one fund guarantees a floor of revenue for non-gaming tribes, and the other cushions the impact of casinos on their neighbors while backstopping the first. The arrangement is administered by the state's gaming regulators, who calculate eligibility and disburse the quarterly payments.
Why it matters now
The structure has also had to adapt as more tribes qualified for payments over the years. When the number of eligible non-compact tribes grew, the license-fee revenue flowing into the RSTF did not always keep pace, which is precisely the scenario the Special Distribution Fund backstop was designed to address. Subsequent compact amendments and negotiations have periodically revisited how the funds are financed and replenished, reflecting a system that is maintained rather than static — one the state and the tribes recalibrate as the gaming market changes.
It is worth being precise about what the RSTF is not. It does not distribute money to individual tribal members, it does not fund state general operations, and it is not a charity. It is a government-to-government transfer negotiated among sovereign tribes and the state, designed so that federal recognition — not proximity to a freeway or a metro area — determines a tribe's access to a baseline of gaming-derived revenue. In a state where casino fortunes vary enormously by geography, that principle is what keeps the gaming economy from concentrating entirely in a handful of well-located nations.
The RSTF is more than an accounting detail. It is a live issue as California's compacts evolve and as new deals increasingly move away from general-fund revenue sharing. Payments that once flowed to the state have historically helped sustain the funds that support non-gaming tribes, so changes in how compacts are structured can ripple through the redistribution system. Readers following that shift can see our analysis of the retreat from revenue sharing in new compacts, which examines how the legal limits on state demands are reshaping these deals.
The RSTF also offers a useful contrast to the way individual tribes distribute money to their own members. The trust fund is government-to-government revenue sharing among tribes, distinct from the per-capita payments that some tribes make to individual citizens out of their own gaming profits. And it sits within the broader compact framework explained in our overview of tribal-state compact revenue sharing.
For a complete list of California's gaming and non-gaming tribes and where they operate, see our California tribal gaming hub. Understanding the RSTF is key to understanding how, in the nation's largest tribal gaming market, the proceeds of the industry are spread far beyond the casino floor.