American Indian tribes were given the right to gamble on their reservations five years ago by the US government, recognising their rights to limited self-government. But Indian-run casinos, which pay no taxes to state governments, have since become a dollars 6bn business spanning 22 states, channelling hundreds of millions of dollars to the financially strapped tribes.
The tribes, which are allowed to offer any type of gambling legal in the state, have thus come into direct competition with licensed operators such as Mr Trump, who manages three casinos in Atlantic City, New Jersey.
While none has yet opened in New Jersey, one of the most successful has been operating in Ledyard, Connecticut. This casino is roughly the same distance from New York City, the home of many of the gamblers who frequent Mr Trump's Taj Mahal, Trump Castle and Trump Plaza casinos.
The largest Indian casinos, like the Connecticut operation run by the Pequot tribe, feature the same sophisticated and profitable games offered by big resorts, including slot machines, video poker games and banking card games such as baccarat and blackjack.
Mr Trump's lawsuit argues the Indian casinos enjoy an unfair advantage because they do not pay state taxes.
The Indian Gaming Association, for its part, says Mr Trump's claim that natives are receiving preferential treatment is utterly ridiculous.
'If anyone needs a level playing field, it's the Indian tribes of this country, not Donald Trump,' the association said.
Casino operators across the country are pressing for a review of the 1988 law which gave Indians the right to open casinos.Reuse content