You asked if any state had changed its gaming laws when faced with the prospect of negotiating a class III gaming compact. If yes, you want to know if there have been any legal challenges of the state's authority to take such action.

SUMMARY

At least one state, Idaho, changed its gaming laws when faced with the prospect of negotiating class III gaming compacts pursuant to the federal Indian Gaming Regulatory Act (IGRA). The state adopted criminal and constitutional prohibitions against all forms of class III gaming, except pari-mutuel betting and a state lottery. When the tribe challenged this action in federal district court, the court upheld its right to negotiate such compacts under the amended law rather that the law in effect at the time the tribes initiated their requests for compact negotiations (Coeur d'Alene Tribe, Kootenai Tribe of Idaho and Nez Perce Tribe v. State of Idaho, 842 F. Supp. 1268, (1994) affd. 51 F3d 876 (9^th Cir. ), cert. denied, 516 U. S. 916 (1995)).

In the spring and summer of 1992, three federally recognized Indian tribes asked Idaho to negotiate gaming compacts that would allow them to conduct class III gaming, including casino-style gaming, on their reservations. During a special legislative session in the summer of that year, Idaho drafted a proposed constitutional amendment changing its gaming laws. The final amendment passed in November 1992. The amended constitution allowed a state lottery, pari-mutuel betting, and bingo and raffle games operated by charitable organizations for charitable purposes. But it (1) prohibited all forms of casino gambling and the electrical or electromechanical imitation or simulation of any form of casino gambling and (2) directed the legislature to provide criminal penalties for violations of the prohibition.

In December of 1992, the state negotiated a partial compact with one tribe, covering matters on which they could agree. When negotiations with all three tribes stalled on class III gaming, the state and tribes asked the court for a declaration of their legal rights and obligations under IGRA. The state contended that it was required to negotiate only those class III gaming activities permitted under Idaho law as it stood after the amendments-a lottery and pari-mutuel betting. Among other things, the tribes argued that (1) the state could not change its gaming laws after compact negotiations were requested because this would deprive them of vested rights to conduct class III gaming and (2) they were free to conduct all forms of class III gaming, including casino-style gambling because Idaho permits and does not prohibit some forms of such gaming.

The court held that IGRA does not prevent states from changing their gaming laws and negotiating compacts accordingly, and it does not give tribes any class III gaming rights until a compact has been negotiated.

With regard to the scope of gaming, the court held that the state did not have to negotiate over class III gaming activities beyond those specifically permitted under current Idaho law.

BACKGROUND

Indian Gaming Regulatory Act

IGRA provides a statutory framework for resolving jurisdictional, regulatory, and legal issues about gaming on federally recognized Indian reservations (25 USC §§ 2701 through 2721). Under IGRA, class III gaming (including slot machine, casino, lottery, and pari-mutuel wagering) is lawful on such reservations only if (1) authorized by a National Indian Gaming Commission-approved tribal ordinance; (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.

Under IGRA, a tribe wanting to conduct casino gaming must ask the state to negotiate a compact (25 USC § 2710(d)(3)(A)). If the parties have not agreed on the compact's terms within 180 days of the tribe's request, the tribe may sue the state in federal district court, claiming that the state did not negotiate in good faith (25 USC § 2710(d)(7)(A)(i)). 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 which best comports with IGRA and other federal laws (25 USC §§ 2710(d)(7)(B)(iii) and (iv)).

If the state accepts the mediator's proposal, it becomes the compact. Otherwise, the interior 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 the Indian lands over which the tribe has jurisdiction (25 USC §§ 2710(d)(7)(B)(vi) and (vii)). The procedures are a legal substitute for a negotiated tribal-state compact.

The Cabazon Case

In drafting IGRA, Congress relied on the Supreme Court's ruling in California v. Cabazon Band of Mission Indians (480 U. S. 202 (1987), 107 S. Ct. 1083, 94 L. Ed. 2d 244 (1987)). In Cabazon, California sought to impose state restrictions on the tribe's bingo operations and to prohibit the playing of draw poker and other card games on the reservation.

The Court drew a distinction between state "criminal/prohibitory" laws that generally prohibit certain conduct and "civil/regulatory" laws that permit the conduct subject to regulation. It held that if a state's policy is to prohibit all forms of gambling, then that policy is criminal-prohibitory and the state's criminal laws apply to tribal gaming activities. But if the state allows some forms of gambling, even subject to extensive regulation, its public policy is deemed to be civil-regulatory, and it cannot enforce its gambling laws on Indian reservations. Applying this test to bingo, the Court found that California regulated rather than prohibited gambling in general and bingo in particular (Cabazon at 211). It held that because the state regulated non-Indian bingo and card-playing operations, the tribes were free to engage in those gaming activities and were not subject to state regulations regarding them.

Since IGRA was passed, federal courts have uniformly followed the Cabazon rule, holding that a state permits a gaming activity if it has a public policy promoting it. Hence, the games permitted in a state for IGRA purposes need not be limited to those specific games operated by the state.

IDAHO CASE

Facts

Pursuant to IGRA, the Coeur d'Alene Tribe asked Idaho in April 1992, to negotiate a class III gaming compact that would allow the tribe to conduct class III gaming on its reservation. The Kootenai and Nez Perce tribes made similar requests in June and July 1992, respectively. When the tribes made their requests, Idaho law allowed a state lottery, pari-mutuel betting, and charitable games of chance operated by qualified charitable organizations for charitable purposes.

In November 1992, Idaho amended its constitution, explicitly declaring gambling contrary to public policy and strictly prohibiting gambling, except for a state lottery, pari-mutuel betting, and bingo and raffles conducted by charitable organizations for charitable purposes. It specified that the permitted gambling activities excluded all forms of casino gambling, including blackjack, craps, baccarat, roulette, poker, keno and slot machines, or any electronic or electromechanical imitation or simulation of any form of casino gambling. It required the legislature to impose criminal penalties for violations (Idaho Const. Art. III § 20(1)-(3)).

The legislature changed the criminal statutes pertaining to gambling to reflect the changes in the constitutional amendment. Among other things, the amended law defined gambling as "risking any money, credit, deposit or other thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device or the happening or outcome of an event, including a sporting event, the operation of casino gambling including, but not limited to blackjack, craps, roulette, poker, baccarat, or keno. " Under the law, a violation is a misdemeanor (Idaho Code §§ 18-3801 and 18-3802).

In December 1992, the state and Coeur d'Alene Tribe entered into a partial compact covering matters on which they both agreed. Negotiations with all three tribes reached an impasse over class III gaming. The tribes expressed their intent to engage in extensive class III gaming, including casino-style gaming. The state contended that its laws and public policy prohibited such gaming and that it was only required to negotiate with the tribes on those forms of class III gaming permitted under Idaho law-a lottery and pari-mutuel betting on horse, mule, and dog racing.

The tribes asked the federal district court to rule on the following questions (and others, not at issue here): whether (1) the court, in examining the Idaho gaming scheme, should use the scheme in effect at the time compact negotiations were first initiated and (2) IGRA restricted the class III gaming activities the tribes could conduct in light of Idaho's gaming scheme.

Relevant Legal Issues

The tribes argued that the court had to apply Idaho law and public policy as it was on the date that they requested compact negotiations because (1) IGRA does not allow a state to restrict Indian gaming by modifying its laws and (2) retroactive application of state law changes would deprive the tribes of vested rights to conduct casino-style gaming. They also contended that the law singled them out for unfair treatment and that the state had to negotiate with them over all types of class III gaming, not just those specifically permitted under Idaho law.

District Court Ruling

The court found that the law and public policy of the state set the scope of permissible class III gaming on tribal lands and that nothing in IGRA prevented a state from abolishing and criminally prohibiting all class III gaming. It concluded that tribes had no vested rights with respect to particular class III gaming activities on the following grounds. First, IGRA does not preclude a state from changing its gaming laws and negotiating compacts pursuant to the amended law. Secondly, requesting compact negotiations does not give an Indian tribe gaming rights of any kind. On the contrary, IGRA makes it clear that a tribe has no right to conduct class III games until it has negotiated a tribal-state gaming compact. Therefore, the only time a tribe could arguably claim a vested right to conduct a particular form of class III gaming would be after it had entered into an approved tribal-state compact addressing the particular form of gaming.

The court found that the proper scope of compact negotiations had to be determined "by looking at Idaho law and public policy as they now stand, rather than reverting to Idaho law as it was at the time the tribes first requested compact negotiations" (842 F. Supp. 1268 at 1276).

Tribes Not Singled Out. With regard to the tribes' claim that they had been singled out for unfair treatment, the court said the law applied equally to the state, the tribes, and all other groups and individuals. Except for the allowed gambling, all other forms of gambling were expressly prohibited to everyone, including the state and the tribes.

State Required to Negotiate Only Over Legally Authorized Class III Gaming. The state maintained that it was required to negotiate with the tribes only on the specific class III gaming activities Idaho law permitted. The tribes contended that the Cabazon analysis meant that negotiation should not be limited only to those specific games operated by the state.

The tribes relied primarily on four cases that had interpreted Cabazon in favor of tribes conducting certain forms of class III gaming. The Court found that in all these cases, the states had permitted the specific gaming activity that was at issue. It noted that the Idaho case was distinguishable from some of the cases that had interpreted Cabazon because the Idaho Constitution expressly prohibited the state lottery commission and all others from employing any form of casino gambling or from employing any form of electrical or electromechanical imitation or simulation of any form of casino gambling. It also (1) prohibited those engaging in the three limited exceptions to gambling from employing any forms of casino gambling or electrical or electromechanical imitation of casino gambling and (2) required that the legislature provide penalties for violations.

The court held that based on IGRA, the Cabazon analysis, and the explicit gambling prohibition in Idaho's Constitution, the state had to negotiate with the tribes only on the conduct of a lottery and pari-mutuel betting on horse, mule, and dog races. It was not required to negotiate other forms of class III gaming.

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