p. 42 tribal Slots:Layout 1 11/12/15 4:41 PM Page 44
An Anti-Tribal Gaming Trend The 9th Circuit Court of Appeals in July ruled that the Coeur d’Alene Tribe could not offer Texas hold ‘em poker because of a state law prohibiting the game. The tribe had argued Texas hold ‘em was a Class II game not subject to state jurisdiction. Meanwhile, the 7th Circuit Court of Appeals in April upheld the right of the Ho-Chunk Nation of Wisconsin to offer electronic poker, a game the state said was Class III and subject to a tribal-state compact. The 11th Circuit Court of Appeals in September upheld the right of the Poarch Band of Creek Indians to operate three non-compacted Class II casinos in Alabama. The ruling upended attempts by state Attorney General Luther Strange to have the machines declared illegal. A U.S. District Court judge in September ruled that the Sault Ste Marie Tribe of Chippewa Indians could file for a U.S. Interior ruling on a landtrust application near Lansing, Michigan, without entering into a revenue sharing agreement with the state. And federal and California officials are in District Court seeking to prevent the Ipay Nation of Santa Ysabel from offering proxy-service internet Class II bingo. Many of the legal assaults on tribal rights to operate Class II gambling without interference from the state—a provision of the Indian Gaming Regulatory Act of 1988—are efforts to leverage compact negotiations. “A national trend is that states are becoming more aggressive in preparing for compact negotiations,” McBride says. “They’re targeting Class II and trying to whittle down the definition.” “My experience tells me that when a state starts down the path of questioning Class II machines—whether it’s Alabama, California, Oklahoma or whomever—they’re planning, thinking ahead to either compact negotiations or some other action against tribes,” says Joe Valandra, a Sicangu Lakota and CEO of Great Luck Gaming, partner with the Santa Ysabel Tribe. “It may get wrapped up as a regulatory or policy issue,” Valandra says, “but it’s really a matter of getting more money to the state.”
An Ill-Advised Letter Former state Treasurer Scott Meacham, who negotiated the 2004 Oklahoma tribal-state regulatory compact under former Governor Brad Henry, says the goal was to provide, as compacted machines, a limited form of Class III gambling that fell short of traditional slots found in most gambling jurisdictions. “We didn’t want to do full Class III machines in Oklahoma,” Meacham says. “First of all, we didn’t think we needed to. Secondly, it would be much more difficult to get the state legislature to approve Class III machines.” The compact called for a form of electronic instant bingo that conformed to the Oklahoma State-Tribal Gaming Act. From there, things apparently got complicated. Jamie Hummingbird, director of the Cherokee Nation Gaming Commission, told a panel at the recent Global Gaming Expo that the first machines off the assembly line “did not meet the expectations of the compact.” “The compacted games weren’t performing, economically, the way the tribes had expected,” says Valandra, who at the time served as chief of staff of the National Indian Gaming Commission. “The tribes began to push the manufacturers to make adjustments. That’s how these so-called amendments 44
Global Gaming Business DECEMBER 2015
“My experience tells me that when a state starts down the path of questioning Class II machines—whether it’s Alabama, California, Oklahoma or whomever—they’re planning, thinking ahead to either compact negotiations or some other action against tribes.” —Joe Valandra, CEO of Great Luck Gaming, and former NIGC general counsel
took place, in that context.” Tribal regulators and state officials, assisted by manufacturers and machine testing laboratories—notably Gaming Laboratories International (GLI)—in 2006 agreed to a set of technical standards and specifications for compacted, Class III machines. GLI recommended for approval a device that lacked a video screen and incorporated a random number generator to calculate winning outcomes. The tribal-state consultations and GLI recommendation, according to tribal and state officials, constituted an interpretation of compact provisions and not an amendment requiring state and federal approvals. Meacham, who participated in the 2006 tribal-state discussions, says there was no mention of amending the compact. “It’s a statutory compact,” he says, approved by voters and the state legislature. “We wanted to give the tribes and racetracks the ability to offer new and attractive, competitive games. We wanted to create a machine that had the heart of bingo … and allow growth and development, because we understood you had to constantly be creating new experiences to keep the gaming public engaged. “I don’t know what the state’s motivation could be,” Meacham says of the letters to Washburn. “It feels to me like a bureaucratic overreaction.” GLI President James Maida declined to discuss the matter. “I am sorry, but as the independent non-partisan lab I am forbidden to speak about this issue,” Maida said in an email. “The letters speak for themselves.” GLI’s 2006 opinion was submitted to tribes and the state, and received no objections. However, earlier this year, nearly 10 years after the GLI opinion, state auditors visited six tribal casinos and issued notices of violation (NOVs) contending some machines violated compact provisions. The notices were later