Topic:
GAMBLING; CASINOS; GAMES OF CHANCE; INDIANS;
Location:
GAMBLING - LAS VEGAS NIGHTS;

OLR Research Report


April 25, 2007

 

2007-R-0316

REPEAL OF LAS VEGAS NIGHTS

By: Veronica Rose, Principal Analyst

You asked why the Mohegan Sun and Mashantucket Pequot casinos can continue to operate casino games even though the state has repealed the Las Vegas nights statutes, which makes it illegal to conduct casino style games.

The Office of Legislative Research does not give legal opinions and this report should not be construed as such.

SUMMARY

The federal Indian Gaming Regulatory Act (IGRA) attempts to address the sovereign rights of tribes and states by creating a framework for resolving jurisdictional and legal issues surrounding gaming on Indian reservations (25 USC 2710 et seq.).

Gambling at the Mohegan Sun Casino is conducted under a legally negotiated IGRA tribal-state compact. At the Foxwoods Casino, it is conducted under federal procedures, which are a legal substitute for an IGRA-negotiated compact. Both the compact and procedures are like federal regulations. As such, they supersede state law.

The compact and the procedures are the equivalent of a contract, binding sovereign nations. The former binds Connecticut and the Mohegans; the latter, Connecticut and the Mashantucket Pequots. The games authorized in the agreements and a memorandum of understanding with the state were legal at the time the agreements were negotiated. Neither IGRA nor the state-tribal agreements contain any provision indicating that the continued validity of the agreements is contingent upon state law remaining unchanged. The courts have not ruled on the specific question in Connecticut, and we found no cases in any other jurisdiction exactly on point.

The report summarizes IGRA and its role in the establishment of the casinos.

IGRA

IGRA provides a statutory framework for resolving jurisdictional, regulatory, and legal issues pertaining to gambling on federally recognized Indian reservations (25 USC 2701 to 2721). Its stated purposes are to (1) promote tribal self-sufficiency, (2) establish fair and honest gambling, (3) prevent organized crime and other corruption by providing a statutory basis for regulating gambling, (4) ensure that Indians are the primary beneficiaries of the gambling, and (5) establish standards for the National Indian Gaming Commission (NIGC). IGRA was passed partly in response to a U. S. Supreme Court decision generally precluding states from regulating gaming on Indian reservations (California v. Cabazon, 480 U. S. 202 (1987)).

IGRA divides gaming on Indian reservations into three classes, subject to different degrees of regulation. Class I games, which are traditional ceremonial games or social games played for prizes of minimal value, are within the tribes' exclusive jurisdiction (25 USC 2703(6) and 2710(a)(1)). Class II games, including bingo, lotto, and games similar to bingo, are allowed if the state where the reservation is located permits them (25 USC 2703(7)(A)). But, they are subject to some federal oversight and tribal regulation (25 USC 2710(b) and (c) and 2710(a)(2)). Banking card games, electronic games of chance, and slot machines are expressly prohibited as Class II games (25 USC 2703(7)(B)).

Class III Gaming

Class III games are all forms of gaming that are not in Class I or Class II (25 USC 2703(8)). They include slot machine, casino, lottery, and pari-mutuel wagering. Under IGRA, Class III gaming is lawful on federally recognized Indian reservations only if (1) authorized by an NIGC-approved ordinance adopted by the tribe's governing body and; (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.

Tribal-State Compact Negotiations

Under IGRA, a tribe wanting to conduct Class III gaming must ask the state to negotiate a compact. If the parties have not agreed on the compact within 180 days of the tribe's request, the tribe may file suit in federal district court, claiming the state has not negotiated in good faith (25 USC 2710(7)(A)). If the court agrees with 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 must choose the one that best comports with IGRA and other federal laws (25 USC 2710(d)(7)(B)(iv)).

If the state accepts the mediator's proposal, it becomes the compact. If it does not accept, the secretary must prescribe procedures (1) consistent with the proposed compact the mediator selects and the provisions of IGRA and relevant state laws and (2) under which Class III gaming may be conducted on Indian lands over which the tribe has jurisdiction (25 USC 2710(d)(7)(B)(vii)). The procedures are a legal substitute for a negotiated compact.

The secretary must publish notice of any approved tribal-state compact (or procedures, where applicable) in the Federal Register. They take effect, when published.

GAMBLING OPERATIONS AT FOXWOODS AND MOHEGAN SUN

Gambling at the Foxwoods Casino, owned by the Mashantucket Pequots, is governed by federal procedures. Gambling at the Mohegan Sun Casino, owned by the Mohegans, is governed by state-tribal compact.

When the Pequots sought to negotiate a gaming compact, the state refused on the grounds that Class III games are illegal in Connecticut. The tribe sued the state. In arriving at its finding, the court cited the Supreme Court's opinion in California v. Cabazon Band of Mission Indians, (480 U.S. 202 (1987)) on which Congress relied in drafting IGRA. Cabazon held that if a state prohibits all forms of gambling, then its policy is “criminal-prohibitory,” and its criminal laws apply to tribal gaming. But, if the state allows some forms of gambling, even subject to extensive regulation, its policy is “civil-regulatory,” and it therefore cannot enforce its gambling laws on a reservation.

The court ruled that Connecticut had to negotiate because it:

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)).

The court directed the tribe and state to enter into good faith negotiations and conclude a compact within 60 days. After failing to agree on a compact, they both submitted proposals to a court-appointed mediator, as IGRA requires. The tribe subsequently withdrew its proposal, and the mediator selected the state's version. The state had 60 days to accept the proposal. It decided not to accept it and wait for the results of an appeal it had filed in the U.S. Circuit Court of Appeals. That Court affirmed the lower court's decision, but the state still refused to accept the draft, appealing to the U.S. Supreme Court, which refused to hear the case (denied certiorari). As required by IGRA, the interior secretary prescribed procedures.

COMPACTS AND FEDERAL PROCEDURES

The procedures governing gaming at Foxwoods took effect on May 31, 1991 (Final Mashantucket Pequot Gaming Procedures, 56 Fed. Reg. 24996, May 31, 1991). The procedures have the same legal effect as a negotiated tribal-state compact. And they have the force of federal law, according to a 1993 attorney general's opinion. According to the opinion:

The gambling activity on the Ledyard reservation is governed exclusively by the Procedures promulgated by the Secretary of the Interior pursuant to IGRA. These Procedures are a regulatory enactment of the United States government and are specifically authorized [by IGRA]. The only authority to conduct gambling at this reservation is this regulatory enactment of the United Sate Government (see the attorney general's opinion to House speaker, Thomas Ritter, and Minority Leader, Edward Krawiecki, Jr., dated February 11, 1993 at http://www.ct.gov/ag/cwp/view.asp?A=1770&Q=281384).

The Mohegan Sun compact took effect on December 16, 1994.

IGRA contains no provision addressing the validity of compacts or federal procedures if state law changes to prohibit games authorized in the agreements. And it contains no provision for amending or abrogating the agreements. In the absence of such, it appears that (1) these subjects are appropriate for compact negotiations under 25 USC 2710(d)(3)(C)); and (2) once states and tribes resolve their legal and jurisdictional issues through legally negotiated compacts or procedures, the agreements are binding.

The termination and amendment language in the compact and procedures is not contingent on changes in state law. Rather, it requires action by both parties to the agreements. The provisions governing termination reads as follows:

Once effective this Compact shall be in effect until terminated by written agreement of both parties ( 17).

The provision governing amendments and modification reads as follows:

The terms and conditions of this Compact shall not be modified, amended or otherwise altered except by written agreement of both parties. . . ( 17).

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