Contracts And Poker: Indian Gaming

In 1988, Congress passed IGRA, the Indian Gaming Regulatory Act. Some people think that it was IGRA that got gambling going on Indian Reservations. In fact, nothing could be further from the truth – the IGRA actually limited Indian gaming. Let’s review a bit of history to see what really happened.

Governance of Indian lands in the United States has long been problematic. In 1832, in the landmark case of Worcester v. Georgia, the US Supreme Court ruled that Indian lands were sovereign territories, free from regulation by the states. Congress had exclusive power to regulate the tribes.

This formulation was tested over and over again. In the early 1980s, California became concerned that the Cabazon and Morango bands of Mission Indians were operating bingo parlors and poker games on tribal land near Palm Springs. The state tried to shut down the games as violating state regulations. The state claimed it had the right to do this because federal law gave the state the power to enforce criminal statutes on Indian lands in California.

The case reached the US Supreme Court, which held in 1987 in California v. Cabazon that California’s regulation of gambling was a civil matter rather than a criminal matter, so California could not enforce its gambling laws on the reservation. This decision opened the floodgates for tribes in other states to allow gambling on Indian lands.

Congress responded by saying, ‘Whoa, we need to put an end to that.’ So it enacted IGRA, which restricted gambling on reservations to that which was permitted under the statute. Three levels of gambling were enumerated in the statute: Class I, which is essentially traditional Indian gambling games; Class II, which is essentially bingo, keno, and card games; and Class III, which is essentially wide-open “Las Vegas style” gambling. Obviously, the latter is where the action is.

The tribes are permitted to offer Class I gambling without regulation. With respect to Class II gambling, a tribe can only offer gambling that is otherwise permitted in the state. So if your state makes poker rooms legal, you are likely to find poker at your state’s Indian casinos. But if it doesn’t, you may be out of luck, as the Coeur d’Alene tribe discovered when it attempted to offer poker at its casino in Idaho, which does not allow poker rooms.

A tribe is permitted to offer only the Class III gambling that it has negotiated in a “compact” (essentially a contract) between the tribe and the state, and the state is free to say no to gaming that is not allowed in the state.

For example, slot machines are not allowed in Montana, but video poker is, though Montana allows only 20 video poker machines in a single establishment. Tribes have not been able to negotiate for slot machines, but have been able to negotiate for a greater number of video poker machines. Of course, a state has an incentive to permit more gaming because it also negotiates for a cut of the revenues.

You can find these compacts for your state online, usually on the web site of the Attorney General. A highlight of teaching Gaming Law is the field trip to the local casino, where we get to visit behind the scenes, including the surveillance room. When my class visited the surveillance room of an Indian casino in Washington State, I noticed they kept a copy of the compact handy in case they needed to check whether certain activities were permitted.

You may wonder why some Indian casinos are found not in the remote areas where the reservation is located, but on land closer to population centers. This is permitted by IGRA, which provides that the tribe may offer gambling on newly acquired land if it has the approval of the state and federal governments.

Needless to say, there have been problems with IGRA. It has generated many layers of regulation that have plagued the business. You may recall the scandals involving lobbyist Jack Abramoff, who offered his services to tribes that tried to navigate these waters. As tribes have attempted to offer expanded Class III gaming, they have run into another problem. IGRA says that the state has to negotiate the compact in good faith and provides for the tribe to go to federal court for relief when this does not happen.

But that provision ran up against another decision by the Supreme Court. In 1996, in Seminole Tribe v. Florida, the Court ruled that Congress had no right to abrogate a state’s sovereign immunity, thus relieving the states from being sued and leaving the tribes without a remedy when they believe they have been wronged by the state in negotiating the compact.

Another problem is dealing with the ingenuity of the gaming industry. If a state does not allow slot machines, then the state does not have to permit the tribal casinos to offer slot machines. But because no compact is necessary for a tribe to offer Class II bingo and keno games, a slot machine manufacturer can create an electronic bingo game that converts the results of the bingo game into a display that is not much different from the display seen on a Class III slot machine. Is that device Class II or Class III?

In spite of these problems, Indian gaming has boomed, providing a good deal of economic support to tribes – and more opportunities for poker players to find games. ♠

Scott J. Burnham is Professor Emeritus at Gonzaga University School of Law in Spokane, Washington. He can be reached at [email protected].