KENT, CONNECTICUT – His tribe once controlled huge swaths of what is now New York and Connecticut, but the shrunken reservation presided over by Alan Russell today hosts little more than four mostly dilapidated homes and a pair of rattlesnake dens.

The Schaghticoke Indian tribe leader believes its fortunes may soon be improving. As the U.S. Interior Department overhauls its rules for recognizing American Indian tribes, a nod from the federal government appears within reach, potentially bolstering its claims to surrounding land and opening the door to a tribal-owned casino.

“It’s the future generations we’re fighting for,” Russell said.

The rules floated by the Bureau of Indian Affairs, intended to streamline the approval process, are seen by some as lowering the bar through changes such as one requiring that tribes demonstrate political continuity since 1934 and not “first contact” with European settlers....