A “Bolt from the Blue” from the Supreme Court

The U.S. Supreme Court has laid down the law once again for Indian Country, holding that the Indian Reorganization Act of 1934 (IRA) does not authorize the Secretary of the Interior to take land into trust for tribes that were not under federal jurisdiction as of the date the IRA was enacted. The decision has major implications, as is discussed in the Boston Globe, in which Steve is quoted.

The 6-3 decision in Carcieri v. Salazar, No. 07-526 (Feb. 24, 2009) throws into doubt previous decisions by the Secretary to take land into trust for recently recognized tribes, including the Narragansetts in Rhode Island (who were the subject of the Court decision) and the Mashpee Wampanoag in Massachusetts (who have been hoping to build a $1 billion casino in Middleborough).

Carcieri concerned the Narragansetts’ argument that 31 acres of land it owns in Charleston, Rhode Island, should be placed in trust. Following an administrative decision that came down on the side of the Secretary, the state sued. Both a federal district court and the First Circuit found in favor of the tribe, but the Supreme Court reversed.

The Court’s analysis for the most part turned on its reading of the IRA’s statutory language, and the related application of basic principles of administrative law. The IRA authorizes the Secretary to take land into trust for the benefit of a “recognized Indian Tribe now under Federal jurisdiction.” The question of whether “now” means in 1934, or at the time the Secretary acts, had been held to be ambiguous enough by a lower court to merit deference to the Secretary under the Chevron doctrine (which requires a court to defer to an agency interpretation under such circumstances)—as had been the case for the last 75 years.

However, writing for the majority, Justice Clarence Thomas found the meaning of “now” to be unambiguously understood to be at “the present time; at this moment; at the time of speaking.” Hence the Secretary did not have authority to take land into trust after the date of the IRA’s enactment in 1934.

While the decision is momentous in its potential impact on a number of tribes, Congress could take up the question of what to do about the important question of how the federal government can fulfill its trust responsibility to tribes.

Here’s the Supreme Court’s opinion.

Hometown News Highlight

Our hometown newspaper, the Grand Forks Herald, featured us on the front page this past Sunday. In a fairly wide-ranging piece, we opine about the future of Indian gaming in tough economic times.

And we're pictured in the new Gambling Behavior Lab at the University of North Dakota's Northern Plains Center for Behavioral Research. What a photo!

Read more here: HIGH-ROLLING ACADEMICS: UND professors study Indian gaming

More on Indian gaming and the Economy

Kathryn's quoted in this article about the recession's impacts on tribal gaming in Mississippi, where the Mississippi Band of Choctaw announced that its Pearl River Resort would lay off 570 workers and its Golden Moon Hotel and Casino would operate only on weekends.

While gross revenues for Indian gaming operations across the U.S. in the aggregate have stayed relatively flat in the last year, the economic downturn is now hitting specific areas with greater force. Here, it is likely that the local economy couldn’t sustain the Golden Moon and the Silver Star, with the former cannibalizing the latter’s profits.

Some unsolicited advice: tribes would do well to consider as many creative ways as possible to keep casino employees on the payroll, for instance through flextime, reduced benefits, or even temporary layoffs. Not just the reality, but the image of layoffs is going to provide some serious negative PR in the regions in which these layoffs occur (just take a look at some of the reader reactions to the Clarion-Ledger story). And we all know that preserving or enhancing the positive image of tribal casinos constitutes vital political capital for tribes.

Read more in the Jackson Clarion-Ledger at 570 Jobs Gone at Choctaw Resort

Happy 20th Birthday, IGRA!

Last Friday, Oct. 17, marked the 20th anniversary of the federal Indian Gaming Regulatory Act, signed into law by President Reagan in 1988. (As we've said in recent presentations on IGRA's anniversary, "A long time ago, in a galaxy far, far away . . . . ") We were at a conference commemorating the anniversary (more on that later). In the meantime, here's some commentary:

20 Years of Indian Fortunes, Feuds (San Diego Union-Tribune)

Indian Gaming Dominates 20 Years Later (Las Vegas Review-Journal)

Status Quo in Florida?

Kathryn's quoted in this Tampa Tribune story on the aftermath of the Florida Supreme Court's decision invalidating a portion of the Seminoles' tribal-state compact. As we explained in a number of posts back in July (check our archives if you're interested in catching up!), the Florida Supreme Court ruled that Gov. Crist exceeded his state constitutional authority in authorizing banked card games through the tribal-state compact with the Seminoles.

Despite the state court ruling, though, the tribe continues to operate banked card games, such as blackjack.

The state is a bit stymied. The state attorney general has asked both the NIGC and the U.S. Attorney's office to stop the tribe's games, but to no avail -- not yet, anyway. The tribe has already paid the state $50 million and continues to make payments according to the compact's terms, and as Kathryn points out, stopping the banked card games may also stop the tribe's obligations to pay the state anything: The tribe's leverage, Rand said: the revenue sharing. "That's why, I think, you see the kind of paralysis you do on the part of the state. Do they actually want to push this? What if they just quietly allowed the status quo to occur?"

And -- sigh -- here's further evidence of the dubious distinction between revenue sharing and state taxation of tribal gaming.

According to the article, state senator Mike Haridopolos wants the state to negotiate a new compact that will require the Seminoles to pay even more: "We need to take a second and third look at this," said Haridopolos, R-Melbourne. "I've heard members consistently say that if you taxed all gaming that takes place in the state of Florida at Las Vegas or Louisiana rates, you'd bring in $1 billion a year. That could lower taxes. It's a viable issue to consider."

Read more: Decision Complicates Seminole Gaming Pact

The NYT McCain Article Has a Life of its Own

The New York Times' investigative report on Senator McCain's ties to the gambling industry has been getting international attention since its publication last Sunday. The story was picked up by media outlets across the U.S., as well as by UPI and news outlets in the U.K., France, the Netherlands, Canada, Romania, Spain, Mexico, Turkey, and India, to name a few. It also has been the subject of blogs. And as we've noted many times, the Indian gaming connection seems to capture public attention, so that Steve's quote is making the rounds as well.

Here's a sampling:

http://www.chicagotribune.com/news/nationworld/chi-campaign30sep30,0,6036479.story

http://www.huffingtonpost.com/mark-evitt/mccain-and-the-times-are_b_131252.html

http://www.boston.com/news/politics/politicalintelligence/2008/09/democrats_quest.html

http://www.slate.com/id/2201128/

http://harpers.org/archive/2008/09/hbc-90003629

And, on the more questionable side, there are posts like this one (and no, we don't know how the "at UND" got tacked onto the reference to "more than 70 interviews and thousands of pages of documents at UND" from the NYT story):

http://www.americanchronicle.com/articles/76234

Steve Quoted on John McCain in Sunday's NYT

On Sunday, Sept. 28, the New York Times ran a front-page story with the headline, "For McCain and Team, a Host of Ties to Gambling."

Steve is the lead quote for the story:

"One of the founding fathers of Indian gaming" is what Steven Light, a University of North Dakota professor and a leading Indian gambling expert, called Mr. McCain.”

Steve was referring, of course, to McCain's role as one of the original architects of the federal Indian Gaming Regulatory Act. How one interprets the story of McCain’s subsequent links to the gambling industry as a whole depends in part on how it’s depicted the Times story and in much larger part on the frame through which one views Indian gaming, commercial casino interests, Jack Abramoff, and so forth.

More recently, McCain has questioned the rapid growth of the Indian gaming industry and called for legal reform to place greater state and federal controls on tribal gaming. We examined McCain's and others' calls for legal and political reform, and offered alternative reforms, in our 2006 article in the Virginia Journal of Social Policy and the Law ("How Congress Can and Should 'Fix' the Indian Gaming Regulatory Act: Recommendations for Law and Policy Reform," 13 Va. J.Soc. Pol'y & the L. pp. 396-473). The article was an outgrowth of the concrete recommendations we made in the final chapter of our first book, "Indian Gaming and Tribal Sovereignty: The Casino Compromise" (2005), and was inspired by our testimony before the Senate Indian Affairs Committee in 2005, when McCain was chair of the Committee.

Read more:
Jo Becker and Don Van Natta, Jr., For McCain and Team, a Host of Ties to Gambling New York Times, September 28, 2008, at 1.

Steven Andrew Light and Kathryn R.L. Rand, Indian Gaming and Tribal Sovereignty: The Casino Compromise

Senate Indian Affairs Committee Oversight Hearing on the Regulation of Indian Gaming (Apr. 27, 2005)

Gambling Law Symposium at Drake

On September 12, we participated in the Gambling Law Symposium at Drake University Law School, co-sponsored by the International Masters of Gaming Law . As is typical for IMGL events, the symposium was packed with highly interesting and useful information, both from the "view from 36,000 feet" of academics and the "on the ground" perspective of gaming law practitioners and regulators. We gave a presentation on 20 years of Indian gaming under IGRA, including where we've been and where we seem to be going in the next 20 years. The lineup of speakers also included:

Attorney Heidi Staudenmaier on "Enforceability of Tribal Court Judgments and Related Issues in Light of the Pending Billion Dollar Judgment Against Harrah's in the Mohawk Tribal Court"

Law professor I. Nelson Rose on "Implementation of the Unlawful Internet Gambling Enforcement Act"

Attorney Sean McGuinness on "The Ethical Challenges of Representing Gaming Clients"

Panel discussion on the Iowa Smokefree Air Act and its impact on casinos (and a pending lawsuit challenging the same), with Jack Ketterer, the Administrator for the Iowa Racing & Gaming Commission, Matt Gannon, an Assistant Attorney General for Iowa, Joe Massa, the General Manager for Riverside Casino and Golf Resorts, and George Eichorn, the attorney behind the challenge to the Act

Attorney and gambling law expert Tony Cabot on "What Is Gambling Under the Law?"

Public administration professor Bill Thompson on "Gambling Law and Regulation in Ireland"

Attorney Dennis Whittlesey on "Indian Gaming at the Crossroads"

Mathematics professor Bob Hannum on "Poker and the Law"

Attorney Ben Hayes on "The Business of Betting: A Unified Interpretation of Federal Gambling Laws"

Look for a special symposium issue of the Drake Law Review for forthcoming articles by the symposium presenters.

Starts and Stops in Massachusetts

In early September, the Mashpee Wampanoag Tribe sent a formal request to Massachusetts Governor Deval Patrick to initiate Class III compact negotiations. The request relates to the Tribe's proposal for a $1 billion resort casino in Middleborough, where the tribe currently is working to have land placed in trust by the U.S. Secretary of the Interior.

Ordinarily, such a request would trigger IGRA's requirement that the state negotiate in good faith -- and if no compact is reached after 180 days, then the tribe could sue the state in federal court. But IGRA also says that a tribe "having jurisdiction over the Indian lands upon which a class III gaming activity . . . is to be conducted" can request compact negotiations with the state. And at least one court, the U.S. Court of Appeals for the Sixth Circuit, has held that before the state's good faith duty will be triggered, the tribe requesting compact negotiations must actually possess qualifying "Indian lands."

So, were the Mashpee trying to trigger IGRA's good faith duty?

Without "Indian lands" in hand, so to speak, it seems pretty clear that the state doesn't have to negotiate with the Tribe. The Tribe pointed out that it would rather have even a preliminary agreement with the state for Class III gaming, but in any event, would exercise its right to conduct Class II gaming if Class III were still up in the air when (and if) the Interior Department approved its land-into-trust application.

But if the state did agree to negotiate when it wasn't required to, would it have a duty to negotiate in good faith? And would starting negotiations trigger IGRA's 180-day time line? As Kathryn said in the Mashpee Enterprise story, these are questions that the state's attorneys likely were -- or should have been -- weighing. The only answer we have so far is the state's "thanks, but no thanks" response to the Tribe's request. Patrick's camp responded that any negotiations "would be purely hypothetical," making formal negotiations unproductive from the state's perspective.

Read the articles in which Kathryn is quoted in the Cape Cod Times, and in the Mashpee Enterprise.

We're Off to Drake Law School

We're off to the Drake Law Review/IMGL Gambling Law Symposium in Des Moines, Iowa. This should be an interesting gathering, with high-powered gaming attorneys, policymakers, and even a few professor-types like ourselves.

We'll follow up next week with our sense of how it all went down. Also, we'll have to post something on starts and stops in Massachusetts!

The Fallout from the Florida Decision

In our last post, we explained the Florida Supreme Court's recent ruling that Gov. Crist exceeded his state constitutional authority in authorizing banked card games through the tribal-state compact with the Seminoles. That must mean that the Seminoles can't offer banked card games, such as blackjack, right? Not necessarily. There are at least three considerations that make this more complicated, both legally and politically.

First, the compact was negotiated, signed, and approved by the Interior Secretary. Under IGRA, this was a valid compact. The Seminoles have taken the position that a state court decision cannot invalidate a duly approved compact. So, they continue to offer all the games authorized under the compact, including banked card games.

Second, Florida's options for attempting to enforce the court's decision are limited. Florida has no independent state authority over the tribe's casino. At the same time, IGRA states that Class III gaming, such as banked card games, is legal only if it is operated in accordance with a valid compact. But only the federal government can enforce IGRA. The state of Florida can bring suit in federal court to stop unauthorized Class III gaming, or it can try to convince the NIGC or the local U.S. Attorney to shut down any unauthorized Class III gaming.

And third, though the compact contains a severability clause (meaning that even if the court invalidated the portion of the compact that authorized banked card games, the rest of the compact should remain valid), the compact also contains a revenue-sharing provision. The validity of a revenue-sharing provision should turn on whether the state gave the tribe anything above and beyond what the tribe is entitled to under IGRA -- typically, this is some measure of exclusivity, such as the ability to operate banked card games when no one else can. In other words, if the state tries to shut down the tribe's blackjack games, it runs the risk of forfeiting a great deal of revenue -- some $375 million over the first three years of the compact.

Next up: Why was a private casino was unsuccessful in trying to enforce the court's decision?

Read more in this article in the South Florida Sun-Sentinel in which Kathryn is quoted: Does Court Ruling Put Hard Rock in a Hard Place? Also, see Court Strikes Down Florida-Seminole Gaming Deal in the Miami Herald.

No Surprise from Florida

Earlier this month, the Florida Supreme Court held that the Class III compact negotiated between Gov. Crist and the Seminoles violated state law. As Kathryn has detailed in her 2007 Marquette Law Review article, state constitutional challenges to gaming compacts are not unusual, often arising when the state legislature (or some state legislators) are unhappy with the compact negotiated by the governor. The Florida case is similar to cases in Wisconsin, New York, and Michigan. In Florida, the state legislature sued Gov. Crist, arguing that the compact was invalid without legislative approval. As is typical in these cases, the Seminoles were not party to the suit (Kathryn's article discusses how and why this is problematic). And as is also typical in these cases, the court's decision turns entirely on state law. (Ditto.)

The court concluded that because the compact authorized banked card games, which are illegal in Florida, the governor exceeded his constitutional authority: "The Governor has no authority to change or amend state law. Such power falls exclusively to the Legislature. Therefore, we hold that the Governor lacked authority to bind the State to a compact that violates Florida law as this compact does."

The court's decision is available through the Florida Supreme Court web site. (By the way, Kathryn's Marquette Law Review article is cited by the Florida Supreme Court in its decision.)
http://www.floridasupremecourt.org/decisions/index.shtml

Next up: The Fallout from the Florida Decision

Kathryn Quoted on NIGC's Withdrawal of Proposed Class II Regulations and New "Section 20" Regulations

In this Cape Cod Times article, Kathryn is quoted on the impact of the NIGC's decision to withdraw the most controversial proposed Class II regulations, as well as the impact of the new "Section 20" regulations issued by the Interior Department, on the Mashpee Wampanoag's efforts to open a casino in Massachusetts.

The links between the withdrawn and proposed regs are intriguing from the perspective of the Mashpee. Both outcomes do little to harm the tribe’s efforts to open a casino in Massachusetts, and may in fact assist the tribe in maintaining some political leverage.

Read the article here.

NIGC Reports Successful Government-to-Government Consultations—However One Defines “Success”

During last week's Great Plains/Midwest Indian Gaming Conference and Trade Show at the Shakopee Mdewakanton Sioux Community's Mystic Lake Casino Hotel near Minneapolis-St. Paul, the National Indian Gaming Commission conducted government-to-government consultations with tribal leaders from the region. According to NIGC Chair Phil Hogen, the consultations allowed "ample time" for tribal delegations to discuss "anything on their minds."

The NIGC has drawn criticism for its tribal consultation practices, with some tribal leaders complaining that the consultation is pro forma -- that is, that the Commission conducts consultation sessions, but tribal input has little if any effect on the NIGC's actions. Recently, criticism directed at the NIGC was the subject of an April 17th U.S. Senate Indian Affairs Committee oversight hearing at which we testified.

Can the NIGC ever overcome criticism of its actions? Like any regulated industry, Indian gaming has numerous stakeholders, and we all know the old saying about pleasing everybody, all the time….

Read more about the Conference and Trade Show here.

Read our testimony at the April 17th Senate Indian Affairs Committee Hearing here.

Senate Indian Affairs Committee Oversight Hearing on the NIGC

We testified at the April 17 U.S. Senate Indian Affairs Committee's oversight hearing on the National Indian Gaming Commission. The impetus for the hearing was tribes' concerns about the NIGC's consultation practices. The NIGC has an internal policy that obligates it to conduct government-to-government consultation with tribes in adopting policy and promulgating regulations. As the Committee heard, though, many tribes perceive that the NIGC's consultation process is form over substance -- that is, that tribes' concerns don't have much affect on the NIGC's policies and regulations. This criticism has been raised throughout the NIGC's protracted process of drafting new Class II "bright line" regulations. Rep. Nick Rahall (D-WV) has introduced a bill in the House that would create a statutory obligation on the NIGC to engage in meaningful consultation with tribes. Several of the hearing witnesses urged the Committee to introduce a similar bill in the Senate. At the hearing, Sen. Byron Dorgan (D-ND), Chair of the Indian Affairs Committee, did not indicate whether the Committee would draft its own version of the Rahall bill.

After the hearing, it seemed that the focus was less on consultation and more on Class II machines. NIGC Chair Phil Hogen caught much attention for two comments he made. First, that he intended to shepherd the promulgation of the new "bright line" regulations before he left the NIGC. And second, that he estimated that 60% of so-called "bingo slots" are being operated in violation of current law. Interestingly, Sen. Dorgan did not follow up with what we thought were two obvious questions on the second point: if the machines are illegal, what is the NIGC doing to enforce current law, and if they're illegal under current law, why are new regulations necessary? We think Hogen may have overstated his certainty that the machines are in violation of current law, but perhaps that will be the topic of another hearing . . . . .

Download our testimony or link to the April 17 oversight hearing by clicking here and then on the announcement of Kathryn's testimony at the hearing.

Find press coverage of the hearing here and here.

A reference to Kathryn's quotes on the Mashpee in Massachusetts showed up recently in this "Casino Friend" blog on the Mashpee Wampanoag casino plan.

The post asks,

"Kathryn Rand suggests that the BIA might be suspicious of a claimed reservation sited in an ideal location for a casino. Would she say the same thing if the tribe acted like any big corporation would in their position and shopped about to have a reservation on land that was perfectly suited for a specific business, be it an industrial park, a shopping center, or for that matter for growing cranberries?"

The answer is no, not because Kathryn thinks that there is good cause to be "suspicious" of casino-style gaming on newly acquired lands, but because the current political climate is one of hostility toward so-called "reservation shopping."

In fact, we have been critical of this hostility, and called for policymakers to be guided not by politics, but by IGRA's policy goals and tribal sovereignty. We'd point this blogger to our 2007 article in the Virginia Journal of Social Policy and the Law, "How Congress Can and Should 'Fix' the Indian Gaming Regulatory Act."

Mass. Votes Against Legalizing Casino Gambling, at Least for Now

Breaking news:

Instead of approving Gov. Deval Patrick's proposal for three casinos, the state House voted 106-48 to form a commission to study the issue further, effectively killing Patrick's plan for the year. The Mashpee Wampanoag will continue to pursue their land-into-trust application, with plans of opening at least a Class II facility and perhaps negotiating a Class III compact with the state.

Kathryn's quoted in this article on the likely issues to come. Read more here in the Cape Cod Times.

Report from BingoWorld (sounds intriguing, no?)

We've just returned from BingoWorld Conference and Expo , hosted by BNP Media Gaming Group at the South Point Casino in Las Vegas. We spoke on a panel titled, "Class II Bingo: The Battle for the Bright Line," along with National Indian Gaming Commission (NIGC) Chair Phil Hogen and Quapaw Tribe Vice Chair J.R. Mathews.

Chairman Hogen set out the history of the NIGC's proposed regulations, meant to clarify the distinction between Class II bingo machines and Class III slot machines. Vice Chairman Mathews spoke eloquently on the impact on tribes, particularly in Class II states like Oklahoma.

For our part, we detailed the legal background and legal issues raised by the proposed regulations, as well the political impetus and policy implications of the proposed regulations. (More to come on our comments.) The comment period is fast drawing to a close on March 9, though Chairman Hogen seemed to suggest that it could once again be extended.

For more on the proposed regulations, click here.

An Active Interior Department

In prior posts, we've mentioned the recent activity of the Interior Department. We've also talked about the prospects for Indian gaming in Massachusetts.

Here's a link to an article in the Cape Cod Times where Kathryn is quoted on the implications of Interior's recent decisions on other tribes' efforts to conduct gaming on newly acquired lands. Click on this: Decision Could Sour Mashpee Wampanoag's Casino Plans.

“No Sioux Logo? No Sioux Casinos!” Shirt Sent Wrong Message

As some of you may know, the University of North Dakota (where we work) has as its athletic nickname the “Fighting Sioux.” This nickname, along with an accompanying “Indian-head” logo, have been the object of considerable contention, most recently culminating in a UND lawsuit against the NCAA for its finding that UND’s nickname and logo created a “hostile and abusive” atmosphere on campus. The federal suit was recently settled, giving the university a three-year window to seek permission from two “Sioux” tribes in the state to retain the nickname and logo.

Last week, the Grand Forks (ND) Herald reported on a T-shirt being sold by a company in Jamestown, N.D.

The shirt, which read, “No Sioux Logo? No Sioux Casinos!,” was critical not only of the settlement reached in the lawsuit between UND and the NCAA, but also of Indian gaming in North Dakota. As the shirt's creator said, “[American Indians] put their name all over a casino, which I think is addictive and destructive.”

Although people certainly are entitled to their opinions on whether casino gambling is good or bad, we think the T-shirt - which no longer is being sold, the Jamestown company announced Wednesday - was a powerful symbol of some all-too-common misunderstandings about Indian gaming.

Without specifically weighing in on the merits of the UND nickname and logo debate or lawsuit settlement, we wrote an op-ed which appeared in the December 10 issue of the Herald to provide perspective rooted in our research on the law and policy of Indian gaming.

Click here for our op-ed.