Tuesday, May 26, 2015

Casino City Press Releases 2015 Indian Gaming Industry Report

By Patrick Sullivan

Dr. Alan Meister has released his 2015 Indian Gaming Industry Report. This is the thirteenth edition of the Report and is widely regarded as the best source for the state of the Indian gaming industry, which has grown to $28.3 billion in revenue as of 2013, accounting for nearly half of the casino gaming business in the United States. The hundred-page Report (and hundred plus pages of data) dives into all 28 Indian gaming states with detailed reports and explanations of gaming trends on a state-by-state level.

Meister’s comprehensive Report analyzes publicly reported data and information provided confidentially by Indian gaming operators. The 2015 Report covers calendar year 2013 due to data availability – still, it is the most up-to-date data available.

Meister reports that as of 2013, 244 tribes operated 479 gaming facilities in 28 states. These operations generated a record $28.3 billion in direct gaming revenue. In fact, every year except 2009, a devastating year for the entire United States economy, demonstrated growth over the previous year. Indian gaming revenue has more than doubled since 2001.

The 2013 revenue represented a 0.5% increase over 2012, despite the otherwise struggling economy. The small growth rate, however, reflects a gaming slowdown which Meister attributes to the simultaneous slowdown in the U.S. economy, reflected by slow growth rates in both GDP and disposable income in 2013 versus 2012.

Nationwide growth trends, however, can be deceiving. On a state level, revenue growth varied widely. Texas experienced 39% growth in its small Indian gaming market, but revenue shrank by 8% in New York. Among other states experiencing negative growth were Wyoming, Idaho, Connecticut and Alaska.

Success in Indian gaming remained very concentrated with the top 6% of all Indian casinos bringing in 41% of total revenue. California continued to bring in 25% of all Indian gaming revenue at its 69 facilities – about $7 billion. After California came Oklahoma with $3.8 billion, a 2% increase from 2012. Those two states alone brought in 38% of all Indian gaming revenue in 2013.

Gaming revenue in Class II only states grew faster than the average, by approximately 9% in 2013. Class II only states are Alabama, Alaska, Nebraska and Texas, but gaming revenue in those states accounted for only 2% of total Indian gaming revenue. Many Class II gaming machines are in mixed Class II/Class III states, but data was not available for the total contribution of Class II gaming in such facilities.

Meister’s Report also estimates the total economic impact of Indian gaming, including secondary economic activity – purchase of goods and services required to operate Indian casinos and other businesses down the supply chain. From that perspective, Indian gaming contributed a whopping $42 billion to the U.S. economy in 2013.

The 2015 Casino City’s Indian Gaming Industry Report is available from Casino City Press at http://www.indiangamingreport.com.

Tuesday, May 19, 2015

Should There be a “Legislative Solution” to Disputed Indian Trust Applications?

By Dennis J. Whittlesey

Recent actions in Arizona suggest that there is a new approach to local government opposition to Indian tribal applications for trust status of newly acquired land. The question has to be whether this is sound Indian Law policy, although the follow-up question seems to be whether the proponents even care.

The most shocking proposal is being sponsored by Arizona’s Senior Senator John McCain and Congressman Trent Franks to repeal a federal law enacted long ago as part of a land settlement negotiated with the Tohono O’odham Nation of Arizona. Specifically, the Tribe entered into an agreement with the federal government pursuant to which the Tribe would be compensated for the flooding of tribal reservation land with both cash and the right to construct a casino in the state on land not otherwise restricted for such a project.

Following enactment of that federal law, the Tribe has moved forward to develop a resort/casino on newly acquired land on unincorporated land within Maricopa County in the Glendale-Phoenix area – commonly referred to as the “Glendale Project.” It has been opposed with multiple lawsuits filed by the State, local governments and even other Indian tribes.

The Tohono O’odham Nation has prevailed in every judicial determination rendered and is now constructing its resort/casino project. But there is new Congressional activity to prohibit the project and – in the process – change federal law for the sole purpose of stopping this single tribal project by unilaterally repealing critical parts of the Congressional Act settling an important dispute over federal flooding of tribal reservation lands.

The McCain-Franks bill has been favorably reported out of the relevant committees in both the Senate and the House of Representatives. The legislation is not of general application; rather, it is written for the sole purpose of blocking the Glendale Project.

Indian gaming is conducted pursuant to a 1987 Supreme Court decision which led to enactment of the Indian Gaming Regulatory Act of October 17, 1988 (“IGRA”). Since that time, many local governments and citizen groups have opposed tribal gaming development on lands newly acquired in trust status. Those challenges properly have been grounded on the very clear requirements of IGRA, which impose subjective standards for review and decision. To this end, the challenges to the Glendale Project under applicable federal laws – including both IGRA and the Indian Reorganization Act of June 18, 1934 – have been unsuccessful. By all legal assessments, the Tribe is clearly within the law.

However, the Tribe is subject to Congressional action since the Indian Commerce Clause of the United States Constitution gives Congress plenary power over Indian affairs. And this legal fact is the foundation of the McCain-Franks assault on the project. Thus, what should be a dispute determined on the basis of existing law suddenly becomes a battle over whether Congress should legislate a final resolution in contradiction to existing law.

Let there be no doubt about the fact that Congress can terminate the Glendale Project, but the real questions is whether it should do so through enactment of a dangerous precedent which likely would lead to other state Congressional delegations seeking “killer” federal legislation. And, the better question is whether this result is either necessary or advisable.

First, the Tohono O’odham situation is unique, in that the Tribe is pursuing an economic opportunity that is specifically tied to provisions of a federal land settlement statute. Reversing a key provision of that earlier legislation probably exposes the United States to a major Court of Federal Claims lawsuit for massive financial damages for the uncompensated taking of the tribal claims to the Glendale site that were legislated by the Gila Bend Indian Reservation Lands Replacement Act.

Second, how can this precedent be ignored when local politicians in other states propose similar legislative attacks on tribal projects that also are concededly legal under existing law? Rather than pursue claims on existing law, the door suddenly opens to outright statutory revocation of tribal rights.

Other local groups are almost certainly watching these developments. If Congress blocks the Glendale Project, then there is no reason why it would not block others without regard to existing law. A political resolution of Indian trust applications would reverse many decades of established law. The precedent needs to be carefully considered.

To read the complete article that appeared in Gaming Legal News, please click here.

Tuesday, May 12, 2015

Bills Propose to Reverse National Labor Relations Board Jurisdictions over Indian Tribal Governments

By Patrick Sullivan

The National Labor Relations Act (“NLRA”) was enacted by Congress in 1935. The Act, also known as the Wagner Act after its champion, New York Senator Robert F. Wagner, passed the Senate in May 1935, the House in June 1935, and was signed into law by President Roosevelt on July 5, 1935. The Act’s purpose was to encourage workers’ collective bargaining rights and protect them from retribution for organizing unions. The Act created the National Labor Relations Board (“NLRB”), a new agency, to enforce the new policy.

Despite the fact that Congress had enacted sweeping pro-Indian legislation in the form of the Indian Reorganization Act of 1934 in the previous year, the NLRA did not mention Indian tribes at any point. Until 2004, Indian tribes and tribally-owned businesses were generally assumed to be beyond the jurisdiction of the labor legislation with few exceptions.

In 2004, the NLRB reversed that assumption with a ruling that it had jurisdiction over the San Manuel Casino pursuant to the NLRA. The matter originated from a complaint filed with the NLRB by UNITE HERE! a large California hotel and restaurant workers’ union, which complained that the Tribe had allowed a competing union, the Communication Workers of America, access to the casino to organize its employees while denying UNITE HERE! representatives access to the site. The Tribe moved to dismiss the proceeding for lack of jurisdiction.

The NLRB held that it had jurisdiction, reasoning that (1) the NLRA applies to tribal governments by its terms, despite any express reference to Indian tribes, (2) the legislative history of the NLRA did not suggest a tribal exception, and (3) federal Indian policy did not preclude the application for the NLRA to the commercial activities of tribal governments. The board found an unfair labor practice and ordered the Tribe to allow UNITE HERE! access to the casino workers.

The Tribe appealed the ruling to the United States Court of Appeals for the District of Columbia Circuit. UNITE HERE! intervened as a defendant. The Court determined that the question of the NLRA’s application to Indian tribes turned on two related questions: (1) whether application of the NLRA to San Manuel’s casino would violate federal Indian law by impinging upon protected tribal sovereignty, and (2) whether the term “employer” in the NLRA reasonably encompasses Indian tribal governments operating commercial enterprises.

In resolving these questions, the D.C. Circuit recognized the tension between the Supreme Court’s 1960 holding in Federal Power Commission v. Tuscarora Indian Nation, that “a general statute in terms applying to all persons includes Indians and their property interests,” and other Supreme Court precedents favoring tribal sovereignty, including the 1978 Santa Clara Pueblo v. Martinez holding that any impairment of tribal sovereignty required a clear expression of tension by stating that “if the general law relates only to the extra-governmental activities of the tribe, and in particular activities involving non-Indians, then application of the law might not impinge on tribal sovereignty.” Ultimately, the Court held that the impact of NLRB jurisdiction on the Tribe’s sovereignty was “negligible in this context, as the Tribe’s activity was primarily commercial,” that the Board’s decision as to the scope of the term “employer” in the NLRA was permissible, and affirmed the Board’s jurisdiction over the casino.

More recently, in Michigan, the Saginaw Chippewa Indian Tribe has appealed an NLRB ruling that the Tribe violated the NLRA. In October 2014, the NLRB ordered the Saginaw Chippewa Tribe to reinstate an employee allegedly fired for union organizing at the Tribe’s casino. The Tribe appealed to the Sixth Circuit Court of Appeals. If that Court rules that the NLRB lacks jurisdiction over the Tribe that decision would create a circuit split and likely end up before the United States Supreme Court.

The NLRB website states “The Board asserts jurisdiction over the commercial enterprises owned and operated by Indian tribes, even if they are located on a tribal reservation. But the Board does not assert jurisdiction over tribal enterprises that carry out traditional tribal or governmental functions.”

In January, Kansas Republican Senator Jerry Moran introduced S.248, the “Tribal Labor Sovereignty Act of 2015.” The Bill would amend that NLRA to exclude “any enterprise or institution owned and operated by an Indian tribe and located on its Indian lands.” At its February 2015 Executive Council Winter Session, the National Congress of American Indians, the largest Native American policy organization, passed a resolution in support of the bill. A similar bill has been introduced in the House of Representatives. The Senate Indian Affairs Committee will hold a hearing on the bill later this month.

Tuesday, May 5, 2015

The Texas Legislature Takes a “Texas Two Step” Approach to Indian Gaming

By Dennis J. Whittlesey

With new legislation introduced in Texas, it is an appropriate time to examine whether the Texas State Legislature is trying to do something for Indian Gaming or to Indian Gaming. The only certainty is that something is likely to happen! And, like the Texas Two Step, the legislative casino dance changes at the whim of the “leader” – which in this case is the Texas Legislature.

The overriding question is: What is happening here, and why?

For starters, it is important to understand two things: (1) the state’s three federally recognized Indian tribes do not share equal legal status and (2) the Legislature ostensibly has proposed to level the playing field so that all three enjoy an equal gaming opportunity. The three tribes are (1) the Texas Band of Kickapoo Indians in Eagle Pass, which is 143 miles southwest of San Antonio on the Rio Grande River and far from the Gulf Coast, (2) the Ysleta del Sur Pueblo Tribe – also known as the Texas Tigua Tribe, located near El Paso and far from the Gulf Coast, and (3) the Alabama-Coushatta Tribe of Livingston, 74 miles north of Houston and 76 miles northwest of Beaumont, and clearly much closer to the Gulf Coast and the hundreds of thousands of tourists annually traveling to the Gulf. Each of these tribes was recognized by a special Act of Congress.

Kickapoo was recognized by Congress through the Act of January 8, 1983, a federal law which imposed no restrictions on the Tribe’s right to conduct gaming. The Alabama-Coushatta and Texas Tigua Tribes were recognized through the Act of August 18, 1987, which restricted any tribal gaming to gaming activities that are lawful under Texas state law. The distinction between Kickapoo gaming opportunity and that available to the Alabama-Coushatta and Tigua becomes important under both the Texas state laws and, in turn, the federal Indian Gaming Regulatory Act of 1988.

It should be noted that the Alabama-Coushatta opened a casino in 2001 on its Livingston reservation that produced monthly revenues of an estimated $1 million for nine months. A federal court shut it down, and the facility has never reopened. Similarly, the Tigua Tribe operated a casino for a while, but it too was closed by court order. Since then, the Tigua gaming operation has been limited to a “sweepstakes” that the Tribe claims is legal under state law. In the meantime, the Kickapoo Tribe has been operating a Class II gaming facility on its reservation, but the State has refused to negotiate a Class III gaming compact.

The two “have not” tribes are the subject of state legislation that would remedy the situation. This would be accomplished by a bill introduced on March 12 by state representatives for districts in Houston and El Paso purporting to put all three Texas tribes on an equal footing. Indeed, the legislation has been touted in the press as “recognizing the gaming rights of all tribes in Texas.” It would do this by removing the restrictions of the 1987 federal law by extending the same rights to the two tribes recognized by that legislation to the level of rights enjoyed by the Kickapoo under the 1983 federal law. The bill sponsors’ stated intent is to amend the Texas Constitution to allow the Alabama-Coushatta and Tigua to engage in gaming on their tribal lands, and thus putting them on the same footing as the Kickapoo.

Within 24 hours of the introduction of the March 12 legislation, State Representative Joe Deshotel of Beaumont proposed to severely mitigate the pro-tribal benefits from the day-old legislation. The Beaumont politician introduced legislation proposing to authorize nine non-tribal “Las Vegas style” casinos to be located in counties on the Texas Gulf Coast. (As the reader will recognize, the sponsor’s hometown just happens to be in one of the counties that just happens to be on the Gulf Coast.)

The ostensible purpose of the new bill is far from the costs incurred by property owners in those designated counties during violent storms, such as hurricanes. However, its actual effect would be devastating to an Alabama-Coushatta gaming facility located far from the tourism mecca of the Gulf Coast. It is true that the Tigua and Kickapoo would benefit, but they almost certainly would lose destination casino traffic in light of the competing opportunity on the Gulf Coast.

The March 12 legislation looks great on paper. However, it looks much less so in light of the March 13 legislation. Moreover, current activity in the Legislature is even more troubling for tribal gaming. What initially seemed to be a fairly simple resolution is more complicated by recent statements by Texas legislators from Laredo, Houston, and Eagle Pass, as well as statements from anti-gaming lobbyists claiming a “clear majority” of lawmakers opposed to any expansion of gaming “even when times are hard.”

To read the complete article in the latest edition of Gaming Legal News, please click here.

Tuesday, April 28, 2015

Have the Odds of Casino Gaming in Tennessee Just Been Raised?

Tennessee has long been known for its strong tourist attraction. With Beale Street and Graceland in Memphis, the music industry and dynamic attractions of Nashville, the Aquarium in Chattanooga and beautiful Smoky Mountains in East Tennessee, the state continues to draw numerous tourists from all over the country, and beyond.

Gaming is not legalized in Tennessee. Tennesseans do, however, have easy access to gaming outside the state. Tennessee has eight contiguous states (Kentucky, Virginia, North Carolina, Georgia, Alabama, Mississippi, Arkansas and Missouri). Three of those states have legalized gaming (North Carolina, Mississippi and Missouri).

The statistics show that Tennesseans have been streaming across its borders to its sister states to take advantage of the gaming these states offer. This fact, along with the millions of dollars following Tennessee residents gaming in other states, has not gone unnoticed by the Tennessee legislature.

Perhaps mindful of this, State Representative Jason Powell submitted a bill to the Tennessee legislature last month. The bill proposes that Tennessee allow casino gaming.

There has long been opposition in the legislature to gaming in Tennessee. But for the first time in decades, a bill proposing gaming in Tennessee received a second in the subcommittee where it was introduced, and a discussion of the issues relative to gaming took place on the Tennessee Capitol Hill.

Dickinson Wright Partner Stuart Scott was asked by Representative Powell to address the legislature. Mr. Scott did so and was able to highlight for the legislature facts and statistics concerning gaming, Tennesseans and revenue.

For example, Tunica, Mississippi, has gaming. It is located in the northwest quadrant of the state. Between 2007 and the third quarter of 2012, Tennesseans made up over 30% of the gaming patrons there. During this same period of time, the data demonstrates that Tennessee residents outpaced residents of the host state by more than 50% at these Mississippi gaming sites. In fact, Tennesseans outpaced patrons from every other state during this time.

Tennesseans are consistently willing to cross state borders to find casino gaming – and take their tax dollars with them. Tennesseans are gaming; they are simply doing so in other states, and taking millions of dollars with them which could be used to benefit the state of Tennessee.

Ohio provides a prime example of the enormous financial benefits Tennesseans stand to gain from legalized gaming. Ohio opened four casinos between 2012 and 2013. In 2014 alone, Ohio brought in $268,000,000 in gaming revenue for its state.

In order to permit casino gaming, Mr. Scott explained to the legislative committee, there must be an amendment to the Tennessee constitution. While the process is lengthy, it permits time for input by all involved and likewise allows for a carefully crafted amendment that permits limited, intelligent gaming in precisely the areas desired.

Some members of the legislative committee considering the bill were also unaware of the control the State may exercise over gaming. There has been concern that permitting casino gaming in Tennessee would have the same effect as authorizing the lottery did. Of course, once the lottery was authorized within the state, lottery ticket purchases were permitted ubiquitously.

Unlike the lottery, casino gaming can be controlled both in terms of location and concerning the number of casinos allowed. Mr. Scott explained that Ohio, for example, only permitted four casinos. These four casinos, one in each of Ohio’s largest cities, brought in just under $64,000,000 in gaming tax revenue in the fourth quarter of 2014 alone. Ohio has already received in excess of one billion dollars in gaming revenue since the fourth casino was completed in 2013.

Several of the legislators were unaware of the fact that the State retains total control over how gaming revenue is spent. In its current form, Representative Powell’s bill will divide gaming revenue between K-12 education and gaming addiction programs. The state entities benefiting from gaming revenue, however, may be supplemented. For example, city and county funds, property tax abatement, infrastructure work and law enforcement support may be considered, among a host of other positive ways to distribute casino gaming proceeds among state agencies, which will benefit all Tennesseans.

Following Mr. Scott’s presentation, the committee broke with what has become a long-standing tradition. Instead of killing the bill promptly, the bill was sent for a fiscal study, which is to take place in the summer of 2015. This is the first time in decades a bill of this nature regarding casino gaming has been allowed to proceed out of a subcommittee, Representative Powell confirms. A discussion of issues relative to casino gaming in Tennessee may begin later this year during the next legislative session.

Tuesday, April 21, 2015

USVI Casino Control Commission Hosts IMGL Gaming Law Conference

The United States Virgin Islands Casino Control Commission hosted the International Masters of Gaming Law Annual Spring Conference on St. Thomas on March 29-31. The conference started off with a welcome from USVI Casino Control Commission Chairwoman Violet Anne Golden and a keynote address by USVI Governor Kenneth E. Mapp. Governor Mapp advised the conference audience that it is time for the USVI to expand its gaming operations beyond the current casino on St. Croix and explore initiation of Internet gaming in the USVI. Governor Mapp emphasized that he supports the USVI gaming industry and its expansion as an element of the USVI economy. In this regard, the USVI Attorney General issued an opinion in 2013 concluding that the USVI’s previously enacted gambling law, which allows Internet-based gambling, does not conflict with federal rules. However, it is recognized that the previously adopted legislation requires tweaking in light of legal and regulatory developments regarding Internet gaming since the original enactment of the USVI gaming legislation in 2001. The USVI is also investigating the possibility of opening the USVI to sports betting.

The International Masters of Gaming Law Conference featured speakers from around the world discussing online and offshore gaming, fantasy sports, legalized sports wagering, global gaming reforms, lottery expansion efforts, compliance issues, FinCEN’s AML protocols for casinos, and the increasing expansion of Internet gaming on a worldwide basis.

In addition to several IMGL master classes set for the iGaming Compliance Conference in Amsterdam (June 25) and G2E in Las Vegas (September 28), the IMGL will host its Annual Fall Conference this year in Lima, Peru, on October 14-16 in conjunction with the International Association of Gaming Regulators.

USVI Casino Control Commission Chairwoman Calls for Regional Gambling Cooperation

At the International Masters of Gaming Law Conference held on St. Thomas, USVI, in March, USVI Casino Commission Chairwoman Violet Anne Golden called for regional dialogue and cooperation amongst the Caribbean countries permitting gambling on their islands. Noting that amongst the Caribbean islands there are both regulated and unregulated gambling activities, Ms. Golden declared that it is in the best collective interests of the Caribbean countries to establish a regional gaming regulatory association focused on standardizing gaming regulations in the Caribbean. In particular, establishing some uniformity of the regulatory environment could encourage investment in new gaming facilities operating in line with the standards required and expected by the major United States and world casino operators and gaming equipment suppliers. The expansion of legal, well-regulated gaming on the Caribbean islands will bring with it expanded economic development, increased employment opportunities for the island populations, and increased revenues for government functions, all of which are of critical importance to the Caribbean nations. A precursor to such a cooperative Caribbean regulatory association may well be establishing an annual regional conference supported by a number of Caribbean nations focusing on Caribbean gaming and regulatory issues that encourages an open dialogue between Caribbean gaming regulators and Caribbean gaming operators and gaming equipment suppliers.

IMGL Past President Robert Stocker echoed Chairwoman Golden’s call for regional cooperation during the “Changes in Offshore Gaming Regimes” panel at the IMGL Conference, noting that the Caribbean countries permitting gaming operations need to get their houses in good order in anticipation of the eventual opening of Cuba to the United States general tourist trade. Stocker noted that it is only a matter of time before Cuba and the Cayman Islands, as well as the Atlantic island of Bermuda (which is in the preliminary stages of establishing casinos on the island), open their doors to casinos. These are other tourist-oriented jurisdictions seeking to lure tourist dollars to their islands. While in some cases such gaming expansion will in all likelihood be many years away from reality, the sooner the Caribbean islands that currently allow gaming get themselves into solid regulatory status in compliance with the United States and international regulatory trends, the greater the likelihood of their being able to withstand increased competition from the opening of legal gaming in other competing tourist destinations.

Tuesday, April 14, 2015

North Fork Tribe Sues State for Compact in Latest Chapter of Gaming Saga

By Patrick Sullivan

By the summer of 2014, it appeared that the North Fork Rancheria of Mono Indians of California had finally made it over the last hurdle to begin construction of a Class III casino with 2,000 slot machines and 40 gaming tables in Madera County, California. But a successful anti-gaming ballot initiative reversed the Tribe’s Class III gaming compact in November, and the Tribe is now suing to regain its lost ground.

The Tribe had pursued its goal for more than 10 years, executing a memorandum of understanding with Madera County in 2004. In 2011, the Tribe won a “two-part” gaming eligibility determination for its newly acquired off-reservation casino site under the Indian Gaming Regulatory Act (“IGRA”). The determination was based on conclusions by the Secretary of the Interior that a gaming facility was in the best interests of the Tribe and not detrimental to the surrounding area, with the concurrence of the governor.

The Tribe negotiated a gaming compact with Governor Jerry Brown which was signed by the governor in August 2012. In February 2013, the Tribe successfully placed a 305-acre parcel in trust status for the project, 36 miles from its Rancheria. On October 22, 2013, the Secretary of the Interior published notice that the compact was federally approved. California requires that Class III gaming compacts be legislatively ratified, and on June 27, 2014, the legislature ratified the Tribe’s compact. Governor Brown signed the compact ratification bill on July 3.

The Tribe received a devastating blow when, immediately after the legislative ratification, Stand Up for California!, a gaming watchdog group opposed to what it calls “reservation shopping” by California Indian tribes, began the process of gathering signatures to refer the North Fork compact, along with a second off-reservation gaming compact, to the voters. The group successfully placed the referendum on the November 2014 general election ballot and commenced an $18.5 million campaign to defeat the compacts, reportedly outspending supporters of the project by 45-1. Almost all of the opposition funding came from other Indian gaming tribes and their investors. The Picayune Rancheria of Chukchansi Indians claimed the North Fork project would reduce revenues at their own casino by as much as a third (the Chukchansi casino is currently closed due to a tribal leadership dispute).

Stand Up! had previously sued the State, the governor and other officials in California state court seeking to prevent the governor from even executing the North Fork compact. After Stand Up! began the referendum process, the Tribe intervened in that litigation and filed a counterclaim challenging the validity of the referendum. The Tribe claimed that (1) the ratification could not be undone by referendum under California law, and (2) IGRA’s requirement that states negotiate compacts “in good faith” preempted such a referendum to the electorate. On June 26, the state court allowed the referendum to proceed, ruling that the compact ratification was subject to referendum under California law as a “legislative act” and not an exempt “administrative act.” The Court further held that California’s referendum process could be read in harmony with IGRA and was not preempted by the federal law.

In January 2015, the Tribe requested that the State reopen compact negotiations. In a January 16, 2015, letter to the Tribe’s attorney, Joginder Dhillon, Senior Advisor for Tribal Negotiations to Governor Brown, wrote: “Given that the people have spoken, entering into negotiations for a new compact for gaming on the Madera parcel would be futile.”

Dhillon’s letter was exactly what the Tribe needed to demonstrate that the State had refused to negotiate. On March 17, the Tribe filed a federal lawsuit against the State of California in federal district court alleging that the referendum overturning the compact ratification and the renewed refusal to enter new negotiations violated IGRA. The Tribe asked the court for a declaration that the State had failed to negotiate a Class III gaming compact “in good faith” in violation of IGRA and for an order requiring the State to resume negotiations.

The State has yet to file an answer, but California’s waiver of its Eleventh Amendment immunity to the Tribe’s bad-faith suit means that the Tribe will likely prevail and win the right to conduct Class III gaming at the site. In the meantime, nothing prevents the Tribe from conducting Class II gaming on the site, as Class II gaming does not require a compact.

To read the complete article, please click here.