LAS VEGAS — A major policy change this year by the Department of Interior will slow the growth of the multibillion-dollar Indian casino industry, which has gained controversy for developments in communities far from reservation land.

The change, made in a series of letters and a memo issued in early January, essentially rejected 22 applications for new off-reservation casinos, by hinging their approval on a single criterion: the distance from the reservation.

While the change was hailed by opponents of the sprawling business that raked in $25.1 billion in gambling revenues in 2006, many tribes attacked the ruling as unfair and unjust, robbing them of what many consider their only economic opportunity.

"We were shocked by the lack of due process involved," said Mark Van Norman, executive director of the National Indian Gaming Association. "The Department of Interior created a new regulatory standard one day, didn't notify anybody and applied it the next day."

The St. Regis Mohawks in upstate New York, one of two tribes that sued the department, called the decision racist and paternalistic because it purported to look out for the best interests of the tribes by supporting the integrity of reservation life.

"It's outrageous for us as Mohawk people to be told that we can't sustain our community relations," said St. Regis Chief Lorraine White.

White said male members of the tribe had for decades traveled to faraway construction sites to support their families on the reservation in upstate New York.

"What a bunch of bulls--- when you're talking to the very people who actually built New York City with their hands," White said.

SOME HAIL DECISION

When its development partner, Empire Resorts Inc., abandoned it following the change, the St. Regis tribe dropped its suit and called on Congress to overturn the policy or have its application grandfathered in.

The other tribe suing, the St. Croix Chippewa Indians of Wisconsin, are pressing on with their suit, which alleges the department violated the due-process clause of the Constitution and acted arbitrarily.

But several groups, including tribes with existing casinos, hailed the change.

Alan Feldman, spokesman for MGM Mirage Inc., the largest casino operator on the Las Vegas Strip, said the policy brought order to an unruly process that has approved dozens of off-reservation casinos in recent years.

"We've never ever had a problem with tribal gaming ... but we definitely take a position when tribes anywhere try to take land that's 300, 400, 500 miles away from their reservation and say, 'Oh, we want to do this there,' " he said.

EXCEPTIONS NOTED

Interior Secretary Dirk Kempthorne, on a recent stop in Las Vegas, noted 10 of the rejected applicants sought casinos from 160 miles to 1,550 miles away from their reservations. Several crossed state lines.

He said the 1988 Indian Gaming Regulatory Act was never intended to create casinos, and therefore jobs for tribal members, so far from the reservation.

"Once you begin going down that path, I don't know how you ever control it," he said. "Because the precedent would be established, and then you could have gaming anywhere."

But three tribes have been approved in the past for long-distance casinos using a two-part determination that requires the OK of a state governor and the interior secretary — including the Forest County Potawatomi's casino in Milwaukee, some 250 miles south of the reservation, in 1990.

Twenty other Indian casinos have been created away from reservations using other exceptions in the act.

Those exceptions exist for tribes without land, those that settle land-claim disputes or those that lost land but had their federal recognition restored.

Since becoming legal in 1988, tribal casino revenues have surged to $25.1 billion in 2006, compared to commercial casino revenues of $32.4 billion. In all, 230 of the 562 Indian tribes in the United States were running 387 casinos in 2006.