Class III gaming efforts in doubt after court decision

Monday, September 24, 2007  

The Bush administration is debating whether to appeal a gaming case that could hurt tribes in several states.

On August 17, the 5th Circuit Court of Appeals blocked a Texas tribe from offering Class III games without the state's approval. Though the decision only affected the Kickapoo Tribe, it invalidated a disputed Interior Department regulation that is being used throughout Indian Country.

Those efforts are now in jeopardy if the decision stands. In Texas, the Tigua Tribe and the Alabama-Coushatta Tribe want to offer Class III games under the disputed regulation because state officials -- including former governor and current president George W. Bush -- have refused to negotiate a compact.

The conservative 5th Circuit also includes Louisiana, where the Jena Band of Choctaw Indians hopes to open a Class III casino in a state proliferated with casinos. But Gov. Kathleen Blanco (D) is refusing to negotiate and is facing a lawsuit.

The Poarch Band of Creek Indians has been having an equally difficult time with Alabama. Though some types of Class III gaming are legal in the state, every governor for the last 15 years has refused to come to the table and work out a deal.

In Florida, the picture looks a bit brighter for the Seminole Tribe and the Miccosukee Tribe. The Seminoles are actively negotiating a compact with Gov. Charlie Crist (R) for slot machines and possibly other Class III games.

Up in Nebraska, however, the state remains adamantly opposed to Class III gaming. The Santee Sioux Tribe has been locked in a court battle with the state over which games are and aren't legal.

In all these cases, the tribes turned to the Interior Department for help. They cited a regulation that allows the federal government to step in and issue "secretarial procedures" for Class III games only when states refuse to negotiate in good faith.

The regulation was written in response to a U.S. Supreme Court case involving the Seminole Tribe. The justices said states can invoke their sovereign immunity to avoid lawsuits over their refusal to participate in the compacting process.

But in the Kickapoo case, the 5th Circuit said the secretarial procedures violate the intent of the Indian Gaming Regulatory Act. The only way a tribe can offer Class III games without state approval is when a court -- not the Interior Department -- finds a state to be in bad faith.

"The [Interior] Secretary may not decide the state's good faith; may not require or name a mediator; and may not pull out of thin air the compact provisions that he is empowered to enforce," the 5th Circuit ruled.

The decision means a tribe must overcome two major hurdles in order to offer Class III games. First, the state must consent to a lawsuit, and second, the tribe must show that the state has been negotiating in bad faith.

The first hurdle is nearly impossible to overcome as most states will never waive their sovereign immunity. But it's not unheard of -- in Wyoming, the state consented to the Northern Arapaho Tribe's lawsuit over Class III gaming.

The tribe ended up proving that the state was in bad faith, a decision upheld by the 10th Circuit Court of Appeals. The tribe is now offering Class III games at facilities on the Wind River Reservation in Wyoming.

But the three tribes in Texas won't be able to get that far because the state has raised the sovereign immunity defense. That stops future court proceedings and bars the use of the secretarial procedures under the 5th Circuit's ruling.

The Office of Indian Gaming Management at the Bureau of Indian Affairs has been working on secretarial procedures for the tribes in Texas, Alabama, Louisiana, Nebraska and Florida for several years. "The process was developed when compact negotiations broke down," deputy director Paula Hart said at the 2006 Global Gaming Expo.

Assistant secretary Carl Artman said Bush administration officials are discussing their next step in the Kickapoo dispute. He declined to discuss the effect the decision has had on the secretarial procedures.

"I'm going to withhold any comments on that," Artman told Indianz.Com in an interview this month.

Separately, Artman is wrapping up work on new regulations for taking land-into-trust for casinos. "We are putting the final dots on the I's and crosses on the T's," he said. He expects the rule to be published in the Federal Register within the next 90 days.

Court Decision:
Texas v. US (August 17, 2007)