July 12, 2000 |
2000-R-0699 | |
CASINO GAMBLING | ||
By: Veronica Rose, Principal Analyst | ||
You want to know if repealing the state's gambling laws would constitute sufficient grounds for the state to refuse to negotiate a gaming compact with an Indian tribe wanting to establish a casino in the future pursuant to the 1998 Indian Gaming Regulatory Act (IGRA).
SUMMARY
We do not have a definitive answer to your question. This is an evolving legal area and predictions are difficult. IGRA allows a federally recognized Indian tribe to conduct casino- type gaming pursuant to a compact it negotiates with the state if the state "permits such gaming for any purpose by any person, organization, or entity." Even if Connecticut repeals its gambling laws, it could be argued that by virtue of the two existing Indian casinos, the state permits "such gaming." The state could counter this argument by arguing that the Mashantucket Pequot Casino was established under state protest by operation of federal law and that IGRA contemplates voluntary permission for such gambling under a general state regulatory framework. But the tribal-state slot machine agreements, which could be seen as voluntary, and the negotiated Mohegan compact may blunt such a defense.
Since Seminole Tribe of Florida v. Florida, a state can refuse to negotiate a compact with a tribe and assert an 11th Amendment defense to avoid being sued by the tribe in federal court to compel negotiations. But in response to this decision, the U.S. Interior Department adopted regulations to allow a tribe to conduct class III gaming when a federal court dismisses a case to resolve a compact negotiation dispute because the state asserted immunity.
IGRA
Purposes
IGRA provides a statutory framework for resolving jurisdictional, regulatory, and legal issues pertaining to gambling on federally recognized Indian reservations (25 U.S.C §§ 2701 to 2721). Its stated purposes are to promote tribal self-sufficiency, establish fair and honest gambling, prevent organized crime and other corruption by providing a statutory basis for gambling regulation, ensure that Indians are the primary beneficiaries of the gambling, and establish standards for the National Indian Gaming Commission (NIGC).
Class III Gaming
Under IGRA, class III gaming (primarily slot machine, casino, lottery, and pari-mutuel gaming) is lawful on federally recognized Indian reservations only if (1) authorized by an ordinance adopted by the tribe's governing body and approved by the NIGC chairman; (2) located in a state that permits such gaming for any purpose by any person, organization, or entity; and (3) conducted pursuant to a negotiated tribal-state compact.
A tribe wanting to conduct class III gaming must ask the state to negotiate a compact. If the state fails to negotiate in good faith, the tribe may sue it in federal district court. If the court finds for the tribe, it must order the state and tribe to conclude a compact within 60 days. If they fail to do so, each must submit its last best offer to a court-appointed mediator, who chooses one of them.
If the state accepts the mediator's proposal, it becomes the compact after the Interior secretary reviews it. If it does not accept, the secretary must prescribe "procedures," which are a legal substitute for the compact.
The requirement that states negotiate with tribes in good faith has led to many lawsuits. In Seminole Tribe of Florida v. Florida, the U.S. Supreme Court held that a state may assert sovereign immunity to avoid being sued by a tribe alleging that it did not negotiate in good faith (116 S. Ct. 1114 (1996)). In other words, a tribe cannot force a state to negotiate a gaming compact. The decision was based on the 11th Amendment to the U.S. Constitution, which provides that a state can only be sued in its own courts or if it consents to the suit. Basically, states have a sovereign immunity from lawsuits filed in federal courts and Congress cannot use IGRA to abridge that immunity.
Arguing that in such a situation, tribes would have no recourse, the Interior Department adopted regulations allowing the secretary to prescribe gaming procedures in cases when a state's assertion of immunity results in the dismissal of a tribal claim. The department defended its statutory authority to enact the regulations on the grounds that Congress could not possibly have foreseen that states could preclude federal litigation by asserting sovereign immunity. It also argued that the regulations further IGRA's spirit by ensuring that tribes can initiate state negotiations that Congress intended when it enacted IGRA. Several attorneys general argued against the regulations. Among other things, they said it circumvented the Court's decision in Seminole, doing administratively what Seminole held Congress cannot do legislatively.
When the Mashantucket Pequots asked to negotiate a compact, the state refused on the grounds that class III games were illegal in Connecticut. The tribe sued the state, and the court ruled that the state had to negotiate because:
Connecticut permits games of chance, albeit in a highly regulated form. Thus, such gaming is not totally repugnant to the State's public policy. Connecticut permits other forms of gambling, such as a state operated lottery, bingo, jai alai and other forms of pari-mutuel betting. High amounts may be bet and substantial winnings are permitted. Connecticut "regulates, rather than prohibits, gambling in general and [games of chance] in particular (see Mashantucket Pequot Tribe v. State of Connecticut, 37 F. Supp. 169 (D Conn. 1990) aff'd. 913 F. 2d 1024 (2nd Cir. 1990), cert. denied-US-111 S. Ct. 1620 (1991)).
After failing to agree on a compact, the tribe and state submitted their proposals to a court-appointed mediator. The tribe subsequently withdrew its proposal, and the mediator selected the state's version. Ultimately, the Interior secretary prescribed the procedures (based largely on the state's compact) that now govern class III gaming on the Pequots' reservation (56 Fed. Reg. 24996, May 31, 1991).
Unlike the Foxwoods Casino, which operates pursuant to federal procedures, the Mohegan Casino operates pursuant to a negotiated state compact. As far as we were able to ascertain, the elements of the compact and procedures are identical.
Under the procedures prescribed by the secretary, the Mashantucket Pequots had no authority to conduct video slot gaming until at least one of the following conditions was met:
1. it was determined by agreement between the Tribe and the State or by a court of competent jurisdiction, that by virtue of the existing laws and regulations of the State the operation of video facsimiles of games of chance would not be unlawful on the ground that the Tribe is not located in a state that permits such gaming..." or
2. the existing laws or regulations of the State are expressly amended to authorize the operation of any video games of chance for any purpose by any person, organization or entity (pgs. 53 and 54).
In 1993, the governor and tribe agreed to suspend the moratorium on video facsimile gaming in the "compact" to allow the tribe to conduct slot machine gaming. Under the agreement, the tribe agreed to give the state 25% of its gross slot machine revenue each month as long as the state did not authorize casino gaming elsewhere in the state.
The memorandum was amended in 1993, setting the amount the tribe should pay in that fiscal year. It was again amended in 1994, to allow for an identical agreement between the state and the Mohegans. (It also expanded the scope of the original by conditioning the tribes' contribution to the state on not permitting other commercial games, instead of just video facsimiles.) Under the current agreements, each tribe must contribute 25% of monthly slot revenue to the state. If either contribution drops below $80 million in any year, that tribe's rate would rise to 30% in order to assure a combined $160 million minimum contribution.
We are unaware of any case that has decided whether an existing Indian casino established pursuant to IGRA prior to a state's repeal of its gambling laws constitutes state sanction of gambling so as to require negotiations by the state with other tribes for additional casinos. But a tribe wanting to compel the state to negotiate could raise the argument that by virtue of these existing casinos, the state permits casino gaming. Connecticut could counter this argument by arguing that the first casino was established under state protest by operation of federal law and that the IGRA contemplates voluntary permission for such gambling under a general state regulatory framework. But the state voluntarily negotiated the second casino and the memoranda of understanding that gave the tribes the right to operate slot machines. The voluntary negotiation, especially as it pertains to the slot machine agreements, may blunt such a defense. It is unclear what the ramifications of terminating the memoranda would be.
VR:eh
TOP