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Bush briefs sound alarm on Indian gaming regulation
Tuesday, November 25, 2003

The Bush administration on Friday asked the U.S. Supreme Court to overturn two decisions favoring tribal interests, arguing that regulation of the $14 billion Indian gaming industry is at risk.

After receiving two extensions, the Department of Justice finally filed formal requests to review cases that originated in the 10th Circuit and the 8th Circuit. These circuits cover dozens of tribes in several Western and Northern Plains states.

But in asking the high court to take on the dispute, Solicitor General Ted Olson said Indian gaming throughout the the nation is threatened. Unless authorized by a gaming compact -- which some states refuse to negotiate -- tribes should not be allowed to operate certain casino machines, he wrote.

Even where tribes and state have come to an agreement, Olson urged the Supreme Court to get involved. Citing California, which has a 2,000-per-tribe cap on slot machines, he said tribes there could "circumvent" this limit by offering casino games that resemble slot machines.

Olson also argued that tribes in six states could "evade" revenue sharing provisions of their compacts by offering slot machine-like devices. A device that "looks like a slot machine, sounds like a slot machine, and plays like a slot machine," is a slot machine, he wrote in one of the petitions for review.

The dispute underscores long-running tensions over the types of machines tribes can offer at their casinos. Under the Indian Gaming Regulatory Act (IGRA), tribes can offer Class II games, such as bingo and pull tabs, without state involvement. The more lucrative Class III games, like slot machines and card games, can only be operated pursuant to a tribal-state compact.

But thanks to technological advances, the line between Class II and Class III games is being blurred. Tribes are offering electronic bingo and pull tab products that resemble slot machines in look and feel.

At first, the National Indian Gaming Commission (NIGC) considered the games to be Class III. Several courts concluded otherwise, forcing NIGC to go back to rethink how it classifies casino machines.

In the two petitions, government attorneys avoid discussing NIGC's game classification regulations, which were changed in the summer of 2002 to reflect the court decisions. Instead, they say the dispute centers on the relationship between two federal laws.

One is the Johnson Act, which prohibits the possession or use of "any gambling devices" on reservations. The other is IGRA, which carves out an exception to the Johnson Act so long as gaming is conducted pursuant to a tribal-state compact.

The 10th Circuit Court of Appeals addressed the issue in a case involving the Seneca-Cayuga Tribe of Oklahoma, the Fort Sill Apache Tribe of Oklahoma and the Northern Arapaho Tribe of Wyoming. Federal officials threatened to prosecute the tribes for offering the "Magical Irish Instant Bingo Dispenser System," which NIGC considered to be Class III. None of the tribes have a valid compact with the state.

The 10th Circuit overturned NIGC and ruled that "Magical Irish" met IGRA's definition of a Class II device. The Johnson Act, the court said, doesn't matter in this instance. "If a piece of equipment is an IGRA Class II technologic aid, a court need not assess whether, independently of IGRA, that piece of equipment is a 'gambling device' proscribed by the Johnson Act," the court said in a unanimous April 2003 opinion.

"The court of appeals has eviscerated the Johnson Act as a tool for policing casino-style gaming in Indian Country," Olson wrote in response.

The 8th Circuit Court of Appeals took its shot in a case involving the Santee Sioux Tribe of Nebraska, whose leaders were held in contempt and fined $4 million in an earlier dispute with state and federal officials. But they breathed a sigh of relief when the court excluded the "Lucky Tab II" machine from the Johnson Act and blessed it for play without an IGRA compact.

The decision, Olson wrote in response, "opens the door to circumvention of the Johnson Act's prohibitions on gambling devices, not only in Indian Country, but in the other places where the act applies, such as federal enclaves and possessions."

The Bush administration is asking the Supreme Court to accept the gaming cases and consolidate them into one appeal. Government lawyers took a similar approach with two trust relationship cases that were decided earlier this year.

The tribes involved in the cases would have time to file a response to the petitions filed on Friday. The Supreme Court would then decide whether it should take the cases or not. If the justices accept them, oral arguments would likely be heard next summer.

Relevant Documents:
Petition: U.S. v. Santee Sioux Tribe | Petition: U.S. v. Seneca-Cayuga Tribe

Lower Court Decisions:
U.S. v. Santee Sioux Tribe (March 20, 2003) | Seneca-Cayuga Tribe of Oklahoma v. National Indian Gaming Commission (April 17, 2003)

Relevant Links:
The Santee Sioux Tribe - http://www.santeedakota.org
National Indian Gaming Commission - http://www.nigc.gov

Related Stories:
Supreme Court asked to rule on Indian gaming (09/30)
NIGC resolves status of company's casino machine (09/24)
Hogen says Okla. tribes skirting federal gaming law (05/19)
Appeals court says game is legal Class II (04/21)
Appeals court upholds Santee casino games (3/20)
Casino company loses Indian gaming suit (09/11)
Santee Sioux leaders found in contempt of court (6/22)

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