Untitled Texas Attorney General Opinion ( 2004 )

- _-
ATTORNEY GENERAL OF TEXAS
GREG ABBOTT
December 8,2004
The Honorable Frank J. Corte Jr. Opinion No. GA-0278
Chair, Committee on Defense Affairs and
State-Federal Relations Re: Whether constitutional authorization ofvideo
Texas House of Representatives lottery terminals on Indian tribal lands would
Post Office Box 2910 permit Indian tribes to offer casino gambling in
Austin, Texas 78768-2910 Texas (RQ-0214-GA)
Dear Representative Corte:
You request an opinion on questions related to House Joint Resolution 1 of the Seventy-
eighth Legislature, Fourth Called Session.’ See Tex. H.R.J. Res. 1,78th Leg., 4th C.S. (2004). This
resolution proposed amending Texas Constitution article III, section 47 to authorize the state to
operate video lottery terminals (“VLTs”) at racetracks and on Indian lands. “VLTs are electronic
games of chance played on video terminals.” HOUSE RESEARCHORGANIZATION,Focus REPORT,
BETTING ON VIDEO LOTTERY TERMINALS TO RAISE REVENUE 2 (Mar. 5, 2004)? Visually and
internally they are similar to slot machines. See id. “Most VLTs are video-based, overseen by state
lottery agencies, and can be monitored, controlled, and audited by a central computer system[.]” Id.
“Some VLT games are purely games of chance, while others are video versions of card games such
as poker and blackjack.” Id. See also Tex. Att’y Gen. Op. No. GA-0103 (2003) at 2 (defining
VLTs).
Article IR, section 47 of the Texas Constitution prohibits lotteries except for those
specifically excepted by section 47(e). See id. at 8; see also TEX. CONST. art. III, 5 47. Thus, a
constitutional amendment would be necessary to legalize VLTs in Texas. See Tex. Att’y Gen. Op.
No. GA-0103 (2003) at 8. The legislature did not approve the proposed constitutional amendment
that would have placed on the ballot a proposition to authorize video lottery terminals. See Tex.
H.R.J.Res.1,78thLeg.,4thC.S.(2004);H.J.o~T~~.,78thLeg.,4thC.S.218(2004).~Nordidthe
legislature approve legislation that would have implemented the proposed constitutional amendment,
‘Letter from Honorable Frank J. Cork Jr., Chair, Committee on Defense Affairs and State-Federal Relations,
Texas House of Representatives, tp Honorable Greg Abbott, Texas Attorney General (Apr. 27, 2004) (on tile with
Opinion Committee, also available af http://www.oag.state.tx.us) [hereinafter Request Letter].
2Avaikzbk at http://www.capitol.state.tx.us/hrofr/frac.
‘House Joint Resolution 1 failed of adoption on the House floor.
The Honorable Frank J. Corte Jr - Page 2 (GA-0278)
See Tex. H.B. 1,78th Leg., 4th C.S. (2004); H.J. OF TEX., 78th Leg., 4th C.S. 193 (2004); S.J. OF
TEX., 78th Leg., 4th C.S. 58 (2004):
I. Questions
You ask about the effect a constitutional amendment authorizing the state to operate VLTs
at racetracks and on Indian lands would have on the following groups of Indian tribes:
The Texas Band of Oklahoma Kickapoos, who were recognized by
the federal government in Public Law 97-429,25 U.S.C. 5 13OOb-11,
without any reference to the tribe’s right to offer gaming.’
The other two recognized tribes in Texas - the Alabama-Coushatta
Tribes of Texas and the Ysleta de1 Sur Pueblo (also known as the
Tigua Indian tribe) - which were recognized under the Ysleta de1 Sur
Pueblo and Alabama-Coushatta Tribes of Texas Restoration Act in
1987, 25 U.S.C. 5 13OOg-1; that legislation specifically states that
“[a]11 gaming activities which are prohibited by the laws of the State
of Texas are hereby prohibited on the reservation and on the lands of
the tribe.” 25 U.S.C. §[§I 737(a)[, 13OOg-6.1
Other Indian tribes not currently resident in Texas but with a
historical relationship to Texas lands, such as the Comanche, the
Kiowa, the Mescalero Apaches, and the Cherokees.
Indian tribes in Texas that have not been recognized officially [by the
federal government], but may be recognized in the future.
See Request Letter, supra note 1, at 1-2 (footnote added).
Your questions are summarized as follows: (1) may the state “authorize VLT gaming on
tribal lands outside the jurisdiction of the federal Indian Gaming Regulatory Act;” (2) if a
constitutional amendment and enabling legislation authorize VLTs on Indian reservations, will the
Indian Gaming Regulatory Act “authorize Texas tribes to conduct all forms ofcasino-style gaming;”
and (3) does the Indian Gaming Regulatory Act bar the state horn “receiving a share of the revenues
from VLTs without a grant of territorial exclusivity or other unique benefit to the tribe?” See id.
at 2. In addressing your questions, which raise issues of federal law, we rely on the relevant federal
statutes and judicial decisions.
4House Bill 1 passed to engrossment on the House floor and was referred to the Senate Committee of the Whole,
but failed to progress beyond a public hearing scheduled for May 14,2004, before the Senate Committee of the Whole.
‘For purposes of this opinion, “gambling” is synonymous with “gaming.” See Ellis v. State, 162 S.W.Zd 407,
408 (Tex. Grim. App. 1942) (“to bet or wager means to gamble or game for mmey or other stakes”).
The Honorable Frank J. Corte Jr - Page 3 (GA-0278)
II. VLT LeGslation. Seventv-eighth Lepislature, Fourth Called Session
House Joint Resolution 1 proposed the following addition to article III, section 47:
(0 The Legislature by general law may authorize the State to
operate video lottery games and to contract with one or more of the
following legal entities to operate video lottery games on behalf of the
State:
(1) a person licensed in this State to conduct
wagering on a horse race or greyhound race; or
(2) an Indian tribe recognized by the United
States government under federal law.
TEX. H.R.J. I&S. 1, 5 l(f),78th Leg., 4th C.S. (2004) (as introduced) (emphasis added).
The Secretary of the Interior (the “Secretary”) is required to publish a list of federally
recognized tribes in the Federal Register. See 25 U.S.C. 5 479a-l(a) (2000). The most recent list
includes the Alabama-Coushatta Tribes6 of Texas, the Kickapoo Traditional Tribe of Texas, and the
Ysleta de1 Sur Pueblo ofTexas. See 68 Fed. Reg. 68180-84 (Dec. 5,2003). The Secretary has also
adopted procedures whereby an American Indian group may seek federal recognition as an Indian
tribe. See 25 C.F.R. pt. 83 (2004).
The Committee Substitute to House Joint Resolution 1 expressly identified the three federally
recognized Texas Indian tribes, providing that the legislature might “allow only the following legal
entities to operate video lottery games on behalf of the State”:
(A) a person licensed in this State on May 1,2004, to conduct
wagering on a horse race or greyhound race . ;
@) the Ysleta de1 Sur Pueblo and Alabama-Coushatta Indian
tribes, which, under an agreement with this State in the form
prescribed by general law or negotiated by the governor and ratified
by the Legislature, operate the games on lands held in trust by the
United States for such tribes on May 1,2004 ; and
(C) the Kickapoo Traditional Tribe ofTexas, which, under an
agreement with this State in the form prescribed by general law or
‘Under federal law, the Alabama and Coushatta Indian Tribes of Texas are considered as one tribal unit, and
we will refer to them at times as the Alabama-Coushatta Tribe. See 25 U.S.C. $732 (2000).
‘YsletadelSur Pueblo isalso!amwnasTigua. S~~HOLJSEF~ESEARCHORGATION,FOCUSREPORT,BETTING
ON VIDEOLOTTERYTERMINALS TO RAISERWENUE6 (Mar. 5, 2004), available af http:llwww.capitol.state.tx.us/hrofr
Iframe4.htm#foc.
The Honorable Frank J. Corte Jr - Page 4 (GA-0278)
negotiated by the governor and ratified by the Legislature, operates
the games on lands held in trust by the United States for the benefit
of the tribe on which Class Ill gaming is permitted under the Indian
Gaming Regulatory Act of 1988
Tex. Comm. Substitute H.R.J. Res. 1,s l(f)(4)(A)-(C), 78th Leg., 4th C.S. (2004); see alsoH.J. OF
TEX., 78th Leg., 4th C.S., 8,29 (2004). The Committee Substitute also required the law authorizing
the video lottery system to provide that “net revenue generated from video lottery terminals operated
by an Indian tribe on Indian lands shall be distributed as set forth in the agreement authorizing the
tribe to operate video lottery games, provided that the State must receive not less than 25 percent
ofthe net revenue.” Tex. Comm. SubstituteH.R.J. Res. 1, § l(f)(9)@), 78th Leg., 4th C.S. (2004).
III. The Indian Gaming Regulatory Act
In 1988, Congress adopted the Indian Gaming Regulatory Act (“1GRA”or “Act”), 25 U.S.C.
$4 2701-21 (2000), in response to state concerns about the United States Supreme Court’s decision
in California v. Cabazon Band ofMission Indians, 480 U.S. 202 (1987). See S. REP. NO. loo-446
(1988), reprinted in 1988 U.S.C.C.A.N. 3071-72. Cubazon considered whether gaming on an
Indian reservation was subject to state regulation pursuant to Public Law 53-280,8 a federal law
granting California broad criminal jurisdiction over offenses committed by or against Indians within
Indian lands in the state. See Cubuzon, 480 US. at 207-08; 18 U.S.C. 5 1162 (2000); see also 28
U.S.C. 5 1360 (2000) (civil jurisdiction). The Supreme Court held that if the intent of a state law
is to prohibit certain conduct, it falls within Public Law 280’s grant of criminal jurisdiction to
the state, but if the state law generally permits the conduct at issue, subject to regulation, it is
a civil/regulatory law and the state is not authorized to enforce it on an Indian reservation. See
Cabazon, 480 U.S. at 209. “The shorthand test is whether the conduct at issue violates the State’s
public policy.” Id. The court in Cabazon held that Indian tribes in states that otherwise allow
gaming have a right to conduct gaming activities on Indian lands, unimpeded by state regulation.
See id. at 221-22.
IGRA permits federally recognized Indian tribes to conduct gaming activities under stated
circumstances and creates the National Indian Gaming Commission to regulate such activity. See
25 U.S.C. $3 2704-2710 (2000). The Act establishes three classes of gaming subject to differing
degrees of federal, state, and tribal regulation. See id. 5 2710. Class I gaming is limited to social
games, either ceremonial or for nominal prizes, and is free of all but tribal regulation. See id.
$5 2703(6),2710(a)(l). ClassIIgamingincludesbingo andrelated games, i.e., gamesplayed against
other players in which the house has no economic interest in the outcome. See id. 5 2703(7). It does
not include “electronic or electromechanical facsimiles of any game of chance or slot machines of
any kind.” Id. 5 2703(7)(B)(ii). A tribe may engage in Class II gaming if the state in which the
tribe is located “permits such gaming for any purpose by any person, organization or entity (and
such gaming is not otherwise specifically prohibited on Indian lands by Federal law).” Id.
5 2710(b)(l)(A). Class II games are free of state regulation but are subject to tribal regulation and
some federal oversight by the National Indian Gaming Commission. See id. § 2710(b)-(c).
*See Pub. L. No. 53-280, 67 Stat. 588 (codified at 18 U.S.C. 1162 and 28 USC. 1360).
The Honorable Frank J. Corte Jr - Page 5 (GA-0278)
Class III gaming includes all other forms of gaming, see id. 5 2703(g), in particular, the
“lucrative casino-style games such as blackjack, slot machines, roulette, and baccarat.” Ysletu del
&o-Pueblo v. Texas, 36 F.3d 1325,133l (5th Cir. 1994), cert. denied, 514 U.S. 1016 (1995). Class
IIl gaming thus includes VLTs. See 25 U.S.C. 5 2710(d)(l)(A) (2000). A tribe may engage in Class
III gaming if the state in which it is located “permits such gaming for any purpose by any person,
organization, or entity.” Id. 5 2710(d)(l)(B). Class III gaming must also be authorized by tribal
ordinance and must be “conducted in conformance with a Tribal-State compact entered into by
the Indian tribe and the State under paragraph (3) that is in effect.” Id. § 2710(d)(l)(C); see id.
5 2710(d)(3) (negotiation and terms oftribal-state compact). The compact must be submitted to the
Secretary of the Interior, who has 45 days in which to (1) approve the compact, (2) disapprove the
compact, or (3) take no action, in which case the compact is deemed approved, but only to the extent
it is consistent with the provisions of IGRA. See id. 5 2710(d)(8). IGRA includes a provision
authorizing a tribe to sue a state in federal court if the state refuses to negotiate a compact with the
tribe, see id. 5 2710(d)(7)(A)(i), but the Supreme Court has held this provision to be unconstitutional
for violating the Eleventh Amendment of the United States Constitution. See Seminole Tribe v.
Florida, 517 U.S. 44, 72-76 (1996).
IV. Whether the State Mav Authorize VLT Gaming on Tribal Lands Outside the
Jurisdiction of IGRA
A. Lands Belonging to the Alabama-Coushatta or YsIeta de1 Sur Pueblo
Tribe
You first ask whether the state may authorize VLT gaming on tribal lands outside the
jurisdiction of the federal Indian Gaming Regulatory Act. The Kickapoo Traditional Tribe ofTexas
is subject to IGRA. See NATIONAL INDIAN GAMING COMMISSION, GAMING TRIBES.~ See generally
Diamond Game Enters., Inc. v. Rena, 230 F.3d 365 (D.C. Cir. 2000) (Kickapoo Traditional Tribe
of Texas requested National Indian Gaming Commission to classify mechanical device as Class II
aid). Thus, this question does not relate to gaming on Kickapoo tribal lands in Texas, but it does
relate to gaming on Alabama-Coushatta and Ysleta de1 Sur Pueblo tribal lands.
1. Restoration Act
Gaming on Alabama-Coushatta and Ysleta de1 Sur Pueblo tribal lands is not
governed by IGRA, but by another federal statute, the Ysleta de1 Sur Pueblo and Alabama and
Coushatta Indian Tribes ofTexas Restoration Act,” (“the Restoration Act”), which restored federal
recognition to these two tribes. See 25 USC. $9 731-737 (2000) (restoring federal supervision to
Alabama-Coushatta tribe); id. 55 13OOg-13OOg-7 (restoring federal supervision to Ysleta de1 Sur
Pueblo); see also Ysletu de1 Sur Pueblo, 36 F.3d at 1334-35 (addressing gaming on Ysleta de1 Sur
Pueblo tribal lands). Section 737, which applies to the Alabama-Coushatta tribe, states as follows:
“‘&e Ysleta de1 Su Pueblo and Alabama and Coushatta Indian Tribes of Texas Restoration Act, Pub. L. No.
100-89, 101 Stat. 666 (1987) (codified at 25 U.S.C. $5 13OOg-13OOg-7 and25 U.S.C. $5 731-737).
The Honorable Frank J. Corte Jr - Page 6 (GA-0278)
(a) In general
All gaming activities which are prohibited by the laws ofthe State of
Texas are hereby prohibited on the reservation and on lands of the
tribe. Any violation of the prohibition provided in this subsection
shall be subject to the same civil and criminal penalties that are
provided by the laws of the State of Texas. The provisions of this
subsection are enacted in accordance with the tribe’s request in Tribal
Resolution No. T.C.-86-07 which was approved and certified on
March 10,1986.
(b) No State regulatory jurisdiction
Nothing in this section shall be construed as a grant of civil or
criminal regulatory jurisdiction to the State of Texas.
(c) the courts of the United States shall have exclusive
jurisdiction over any offense in violation of subsection (a) of this
section that is committed by the tribe, or by any member of the tribe,
on the reservation or on lands of the tribe. .
25 U.S.C. 3 737 (2000). Identical provisions apply to the Ysleta de1 Sur Pueblo. See id. 5 13OOg-6.
The Fifth Circuit in Ysletu de1 Sur Pueblo, after reviewing the Restoration Act and its
legislative history, concluded that the Restoration Act’s specific provisions on gaming applicable
to the Ysleta de1 Sur Pueblo prevailed over IGRA and governed gaming on that tribe’s lands. See
Ysleta delSurPueblo, 36 F.3d at 1329, n.3,1332. Thus, the Restoration Act, and not IGRA, “would
govern the determination of whether gaming activities proposed by the Ysleta de1 Sur Pueblo are
allowed under Texas law, which functions as surrogate federal law.” Id. at 1335.
The federal district court in Alabama-Coushatta Tribes v. Texas, 208 F. Supp. 2d 670 (E.D.
Tex. 2002), relying on the Fifth Circuit decision in Ysleta de1 Sur Pueblo, held that the Restoration
Act provisions on gaming also govern gaming on Alabama-Coushatta tribal lands. See Alabama-
Coushatta Tribes, 208 F. Supp. 2d at 674, 681 (25 U.S.C. 5 731-37 governs gaming on Alabama-
Coushatta tribal lands). The Alabama-Coushatta and the Ysleta de1 Sur Pueblo tribes are subject to
Texas law governing gaming just as other citizens or entities located in Texas. See generally Texas
v. Ysleta de1 Sur Pueblo, 220 F. Supp. 2d 668,688-91 (W.D. Tex. 2001), aff 69 Fed. Appx. 659,
2003 WL 21356043 (5th Cir.), cert. denied, 124 S. Ct. 497 (2003). ’
2. Johnson Act
The federal Gambling Devices Act, 15 U.S.C. $5 1171-1178 (2000),
commonly known as the Johnson Act, is also relevant to the Alabama-Coushatta and Ysleta de1 Sur
Pueblo tribes. These two tribes are subject to the following provision of the Johnson Act:
The Honorable Frank .I. Corte Jr - Page 7 (GA-0278)
It shall be unlawful to manufacture, recondition, repair, sell,
transport, possess, or use any gambling device within Indian
country as defined in section 1151 of Title 18
Id. 5 1175(a). “Indian country’means “(a) all land within the limits of any Indian reservation under
the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and,
including rights-of-way running through the reservation, (b) all dependent Indian communities
within the borders of the United States , and (c) all Indian allotments, the Indian titles to which
have not been extinguished, including rights-of-way running through the same.” 18 U.S.C. 5 115 1
(2000).
The Johnson Act defines “gambling device” as follows:
(1) any so-called “slot machine” or any other machine or mechanical
device an essential part of which is a drum or reel with insignia
thereon, and (A) which when operated may deliver, as the result
of the application of an element of chance, any money or property,
or (B) by the operation of which a person may become entitled to
receive, as the result of the application of an element of chance, any
money or property; or
(2) any other machine or mechanical device (including, but not
limited to, roulette wheels and similar devices) designed and
manufactured primarily for use in connection with gambling, and (A)
which when operated may deliver, as the result ofthe application of
an element of chance, any money or property, or (B) by the operation
of which a person may become entitled to receive, as the result of the
application of an element of chance, any money or property.
15 U.S.C. 5 1171(a)(l)-(2) (2000). Video lottery terminals are gambling devices within this
definition. See Citizen Band Potawatomi Indian Tribe v. Green, 995 F.2d 179, 180-81 (10th Cir.
1993).
IGRA includes the following partial exemption from the Johnson Act:
The provisions of section 1175 of Title 15 shall not apply to
any gaming conducted under a Tribal-State compact that-
(A) is entered into under paragraph (3)
[relating to Tribal-State compact] by a State in which
gambling devices are legal, and
(B) is in effect.
25 U.S.C. 5 2710(d)(6) (2000). See Citizen BandPotawatomiZndian Tribe, 995 F.2d at 181 (IGRA
for limited waiver of Johnson Act liability under certain circumstances). The Alabama-Coushatta
and Ysleta de1 Sur Pueblo tribes are subject to the Restoration Act and not IGRA. Because the
The Honorable Frank J. Corte Jr - Page 8 (GA-0278)
Restoration Act does not explicitly exempt these two tribes from the Johnson Act, it appears they
may not possess or use VLTs on their lands.”
B. Lands Belonging to Other Groups of Indians
You also ask whether the state may authorize VLT gaming on tribal lands belonging
to Indian tribes “not currently resident in Texas but with a historical relationship to Texas lands””
or “Indian tribes in Texas that have not been recognized [by the federal government] but may be
recognized in the future.” Request Letter, supra note 1, at 2. Of course, Texas may not authorize
VLT gaming on any such lands that are subject to the Johnson Act.
Any legislation singling out such groups of Indians for special treatment would raise issues
under the Equal Protection Clause ofthe United States Constitution. See U.S. CONST. amend. XIV,
5 1; see also Washington v. Confederated Bands and Tribes ofthe Yakima Indian Nation, 439 U.S.
463, 500-01 (1979); Am. Greyhound Racing, Inc. v. Hull, 146 F. Supp. 2d 1012, 1075-76 (D.
Arizona 2001), vacated on other grounds, 305 F.3d 1015, 1018 (9th Cir. 2002). Pursuant to the
Equal Protection Clause, racial classifications are given strict scrutiny by a reviewing court and are
constitutional only if they are narrowly tailored to further compelling governmental interests. See
Adarand Constructors, Inc. v. Pena, 515 U.S. 200,227 (1995); see also Rice v. Cayetano, 528 U.S.
495, 517-24 (2000) (striking down a race-based voting limitation). Federal authority to enact
legislation singling out tribal Indians for special treatment derives from the power of Congress to
regulate commerce with Indian tribes, from the treaty power, and from the federal trusteeship over
Indian lands established by federal statute. See U.S. CONST. art. I, 5 8, cl. 3; art. II, 5 2, cl. 2; 25
U.S.C. 3 177 (2000). Thus, Indian tribes occupy a unique status that allows the federal government
to enact legislation singling out tribal Indians even where the legislation “might otherwise be
constitutionally offensive.” Confederated Bands and Tribes of the Yakima Indian Nation 439 U.S.
at 501. Federal laws “reasonably designed to further the cause of Indian self-government” and
applicable only to members of a federally recognized tribe involve a political and not a racial
classification and are subject to the rational basis test for equal protection. SeeMorton v. Mancari,
417 U.S. 535, 554 (1974).
States do not have a similar unique relationship with Indian tribes and may enact legislation
according special treatment to Indian tribes only when authorized to do so by Congress. See
Confederated Bands and Tribes of the Yakima Indian Nation, 439 U.S. at 500-01; Peyote Way
Church of God, Inc., v. Thornburgh, 922 F.2d 1210, 1218 (5thCir. 1991). We findno federal law
authorizing Texas to adopt laws singling out groups of Indians “not currently resident in Texas but
“The Restoration Act is silent with respect to the process, procedure and oversight of any gaming activity that
may be authorized by the State of Texas. Under the language of the Restoration Act and IGRA, federal policy and
oversight provided for under IGRA that is not inconsistent with the Restoration Act applies to the tribes subject to the
Restoration Act. It is not clear how a court might address this question and whether it might fmd the limited waiver of
the Johnson Act liability found in IGRA applicable also to the Alabama-Coushatta and Ysleta de1 Sur Pueblo hibes.
12We assume that such tribes own land in Texas that might be affected by Texas law, even though they are not
federally recognized in Texas.
The Honorable Frank J. Corte Jr - Page 9 (GA-0278)
with a historical relationship to Texas lands” or “Indian tribes in Texas that have not been recognized
. [by the federal government] but may be recognized in the future.” Request Letter, supra note
1, at 2. Texas may authorize such groups of Indians to engage in VLT gaming in the state to the
same extent it authorizes any other person or group to conduct such gaming. But see 15 U.S.C.
$5 1171-1178 (Johnson Act).
V. Whether Leealization of VLTs on Indian Reservation Also Legalizes Other
Casino Games on Reservation
You raise the following question: if Texas permits one kind of Class lII gaming activity, are
all Class III gaming activities lawful on Indian lands or only the specific type of Class El gaming
permitted by the state? See id. Federal appellate courts have reached different conclusions on this
question. See Rumsey Indian Rancheria of Win&n Indians v. Wilson, 64 F.3d 1250,1256 (9th Cir.
1994) amended by 99 F.3d 321(9th Cir. 1996) (state need only allow Indian tribes to operate games
that others can operate); accord Cheyenne River Sioux Tribe v. South Dakota, 3 F.3d 273,279 (8th
Cir. 1993). See also Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024,1029-l 03 1 (2d Cir.
1990), cert. denied, 499 U.S. 975 (1991) (where state permits some Class III games in a highly
regulated form, it must negotiate under IGRA for casino-type games of chance); Lac du Flambeau
BandofLake Superior Chippewa Indians v. Wisconsin, 770 F. Supp. 480,487-88 (W.D. Wis. 1991),
appeal dismissedfor w.oj., 957 F.2d 515 (7th Cir.1992) (where state was authorized to operate any
kind of lottery, it had to negotiate with Indian tribe over including in tribal-state compact anycasino-
type game).
Some judicial decisions on this question rely on the following IGRA provision:
(1) Class III gaming activities shall be lawful on Indian lands only if such
activities are-
(B) located in a State that permits such gaming for any
purpose by any person, organization, or entity. .
25 U.S.C. § 2710(d)(l)(B) (2000) (emphasis added). The court in Cheyenne River Sioux Tribe
determined that “[tlhe ‘such gaming’ language of. .25 USC. [§I 2710(d)(l)(B) does not require
the state to negotiate with respect to forms of [class III] gaming it does not presently permit.”
Cheyenne River Sioux Tribe, 3 F.3d at 279; accord Dalton v. Pataki, 780 N.Y.S.2d 47, 59-60
(N.Y.A.D. 2004).
Some courts have held that IGRA incorporates the holding of Cabazon that if state law
generally permits gaming, subject to regulation, the state is not authorized to enforce its law on an
Indianreservation. See Cabazon, 480 U.S. at 221-22;seealsoMashantucketPequot Tribe, 913 F.2d
at 103 1 (Cabazon analysis applicable to Class Ill gaming). “Applying the Cabazon analysis to IGRA
essentially requires states to negotiate over all [Class RI] games that are not specifically prohibited
by criminal law or public policy, rather than the narrower class of games that the state expressly
The Honorable Frank J. Corte Jr - Page 10 (GA-0278)
authorizes,” Amy Head, The Death of the New Buffalo: The Ftfth Circuit Slays Indian Gaming in
Texas, 34 TEX. TECH.L. REV. 377,392 (2003).
In Ysleta de1 Sur Pueblo v. Texas, 852 F. Supp. 587 (W.D. Texas 1993), rev;i, 36 F.3d 1325
(5th Cir. 1994), the Ysleta de1 Sur Pueblo tibe sought to negotiate with the Texas governor under
IGRA for a compact allowing it to conduct various Class III gaming activities on its tribal land. The
state maintained that only those Class III gaming activities expressly allowed in Texas could be the
subject ofnegotiations with an Indian tribe. See Ysleta de1 SW Pueblo v. Texas, 852 F. Supp. at 593-
94. The trial court determined that IGRA applied to the Ysleta de1 Sur Pueblo and construed that
statute to incorporate the Cabazon analysis for determining the scope of Class III gaming. See id.
at 591,595-96. It found that Texas law permitted some persons to engage in casino gaming under
the “carnival exception” in Penal Code section 47.01. See id. at 595. Section 47.01(l), which
defines the term “bet” for purposes of the chapter 47 prohibitions against gambling, provides that
a bet does not include:
an offer of merchandise, with a value not greater than $25, made by
the proprietor of a bona tide carnival contest conducted at a carnival
sponsored by a nonprofit religious, fraternal, school, law
enforcement, youth, agricultural, or civic group, including any
nonprofit agricultural or civic group incorporated by the state before
1955, if the person to receive the merchandise from the proprietor is
the person who performs the carnival contest.
TEX. PEN.CODE.ANN. 9 47.01(1)(C) (V emon 2003). Because the “carnival exception” permitted
some persons to engage in casino gaming, the state was required to negotiate with the tribe about the
Class III casino games requested by the tribe. Ysleta de1 SurPueblo v. Texas, 852 F. Supp. at 595-96
(also relying on definition of “lottery’ in Texas Lottery Act). The trial court opinion in Ysleta del
Sur Pueblo v. Texas thus determined that a federally recognized tribe in Texas may negotiate with
the state about conducting all Class III games.
As we have noted, the Fifth Circuit disagreed and determined that the Restoration Act, and
not IGRA, applied to the Ysleta de1 Sur Pueblo. See Ysleta de1 SW Pueblo, 36 F.3d at 1327. This
court expressly left open the question whether IGRA incorporates Cabazon with regard to Class III
gaming. See id. at 1333, n. 17. While the Fifth Circuit determined that the Eleventh Amendment
barred the tribe’s action against the state under the Restoration Act, remanding the case with
directions to dismiss the tribe’s suit, see id. at 1332, 1335, the court in Alabama-Coushatta Tribes
v. Texas, 208 F. Supp. 2d 670 (E.D. Tex. 2002), rejected the argument that all other holdings in the
Fifth Circuit case were dicta. See Alabama-Coushatta Tribes v. Texas, 208 F. Supp. 2d at 674-75
(CitingFlorida Cent. R. Co. v. Schutte, 103 U.S. 118,143 (1880) andNardonev. Reynolds, 538 F.2d
113 1,1135 n. 11 (5th Cir. 1976)). In summary, the Fitth Circuit determined that the Restoration Act
did not incorporate the Cabazon test, see Ysleta de1 Sur Pueblo, 36 F.3d at 1333-34, but it did not
construe IGRA.
The question before us involves an interpretation of IGRA, a federal statute. Neither the
United States Supreme Court nor the Fifth Circuit has decided the scope of Class III gaming for
The Honorable Frank J. Corte Jr - Page 11 (GA-0278)
recognized Indian tribes in states that pefmit only limited kinds of Class IlI gaming activities, while
other federal courts of appeals have reached different decisions on this question. Under these
circumstances, we conclude that this question is an open question of federal law in this state, and as
such, cannot be given a definitive answer in an attorney general opinion. See United States v.
Gomez, 911 F.2d 219,221 n.2 (9th Cir. 1990) (giving no special weight to Idaho Attorney General
Opinion construing federal law).13 The Kickapoo Traditional Tribe of Texas is at present the only
Texas tribe to which IGRA applies. Thus, it is the only Texas Indian tribe that may negotiate with
the state about conducting Class III games. If any other Texas Indian tribes become subject to IGRA
through federal recognition or congressional enactment, those tribes will also be able to negotiate
about conducting Class III games, and the scope oftheirpermissible gaming activity will depend on
the judicial construction of IGRA provisions authorizing Class IIl gaming.
VI. Whether IGRA Bars the State from Receiving a Share of the Revenues from VLTs tin
Indian Reservations
You ask whether IGRA bars the state horn receiving a share of the revenues from VLTs
without a grant of territorial exclusivity or another unique benefit to the tribe.
IGRA provides that a tribal-state compact for Class III gaming may include provisions
relating to “the assessment by the State of such activities in such amounts as are necessary to defray
the costs ofregulating such activity.” 25 U.S.C. 3 271O(d)(3)(C)(iii) (2000). IGRA farther provides
as follows:
Except for any assessments that may be agreed to under
paragraph (3)(C)(iii) of this subsection, nothing in this section shall
be interpreted as conferring upon a State or any of its political
subdivisions authority to impose any tax, fee, charge, or other
assessment upon an Indian tribe or upon any other person or entity
authorized by an Indian tribe to engage in a class III activity. No
State may refuse to enter into the negotiations described in paragraph
(3)(A) based upon the lack of authority in such State, or its political
subdivisions, to impose such a tax, fee, charge, or other assessment.
Id. § 2710(d)(4).
IGRA does not expressly provide that a tribal-state compact for Class III gaming may include
provisions for sharing gaming revenues with the state. The Interior Department has, however,
approved revenue-sharing provisions in some tribal-state compacts negotiated under IGRA.
See Oversight Hearing On the Indian Gaming Regulatory Act of 1988 before the Senate Comm.
“Opinions of a state attorney general on state law questions are entitled to careful consideration by federal
courts and are generally regarded as highly persuasive. See Harris County Comm ‘rs Cf. v. Moore, 420 U.S. 77,87 n. 10
(1975).
The Honorable Frank J. Corte Jr - Page 12 (GA-0278)
on Indian Affairs, 108th Cong. (2003) (statement of Aurene M. Martin, Acting Assistant
Secretary-Indian Affairs, Dept. of the Interior).‘4 The Interior Department stated its position to a
Senate Committee in July 2003 as follows:
To date, the Department has only approved revenue-sharingpayments
that call for tribal payments when the state has agreed to provide [a]
valuable economic benefit of what the Department has termed
“substantial exclusivity” for Indian gaming in exchange for the
payment. As a consequence, if the Department affirmatively
approves a proposed compact, it has an obligation to ensure that the
benefit received by the state under the proposed compact is
appropriate in light of the benefit conferred on the tribe. Accordingly,
if a payment exceeds the benefit received by the tribe, it would violate
IGRA because it would amount to an unlawful tax, fee, charge, or
assessment. While there has been substantial disagreement over what
constitutes a tax, fee, charge, or assessment within this context, we
believe that if the payments are made in exchange for the grant of a
valuable economic benefit that the governor has discretion to provide,
these payments do not fall within the category of prohibited taxes,
fees, charges, or other assessments.
Id.”
In answer to your question, the Interior Department will not approve a tribal-state compact
allowing the state to receive a share of the revenues from VLTs without a grant of territorial
exclusivity or another unique economic benefit to the tribe.
We point out that Senate Bill 1529, proposing amendments to IGRA, was introduced in the
United States Senate in 2003. See Indian Gaming Regulatory Act Amendments of 2003, S. 1529,
108th Cong. (2003). The proposed amendments include a provision governing the apportionment
of revenues, which states that the Secretary may not approve a compact or other agreement that
includes an apportionment of net revenues with a state unless the following conditions are met:
(I) the total amount of net revenues [from gaming]
(aa) exceeds the amounts necessary to meet the requirements
of [tribal government operations or programs and to provide for the
general welfare of the Indian tribe and its members pursuant to 25
“Availabk nf http:ilindian.senate.gov/2003~gs/O70903~~~.PDF
15See also Letter from Honorable Neal A. McCaleb, Assistant Secretary, Indian Affairs, Department of the
Interior, to Honorable B. Cheryl1 Smith, Tribal Chief, Jena Band of Choctaw Indians, at l-2 (Mar. 7,2002) (on file with
Opinion Committee) (disapproving tribal-state compact because it required payments ofgamingrevenues to state without
a state grant of exclusivity rights or other quantifiable economic benefit to the tribe).
The Honorable Frank J. Corte Jr - Page 13 (GA-0278)
USC. 5 2710(b)(2)(B)(i) and (ii)‘” and to make apportionments
pursuant to subsection (f)(4)(B)(ii) of S. 1529,]i7 if applicable; and
(bb) [the apportionment] is in accordance with regulations
promulgated by the Secretary under subparagraph (C); and
(II) a substantial economic benefit is rendered by the State to the
Indian tribe.
See id. (footnote added) (proposing an amendment to 25 U.S.C. 5 2710). Because your questions
relate to IGRA, we advise you to monitor Senate Bill 1529 and other amendments to IGRA that
Congress may propose as well as any judicial decisions on this statute.
?he cited provision pertains to apportionment of gaming revenues to the tribe. See 25 U.S.C. 5 2710@)(Z)
(B)(i)-(ii)(2000).
“The cited provision pertains to apportionment of gaming revenues in excess of those apportioned for tribal
needs under a section ofthe proposed amendment allowingthese excessrevenuesto be apportioned to local governments
to the extent of actual costs incurred by affected local governments as a result of the gaming activities. See Indian
Gaming Regulatory Act Amendments of 2003, S. 1529,10&h Cong. $2(f)(2)(B)(ii) (2003).
The Honorable Frank J. Corte Jr - Page 14 (GA-0278)
SUMMARY
The Restoration Act does not authorize the Alabama-
Coushatta and the Ysleta de1 Sur Pueblo tribes to operate VLTs on
tribal land.
Whether a federally recognized Texas Indian tribe may
negotiate with Texas under the Indian Gaming Regulatory Act about
only the specific Class Ill games allowed by Texas law, or whether it
may negotiate about all Class Ill games is an open question in this
state.
A tribal-state compact for Class IlI gaming activities under the
IGRA may include provisions allowing state assessments of gaming
activities as necessary to defer the costs of regulating the gaming
activities. A compact may not allow the state to receive a share of
Class III gaming revenues unless the compact grants territorial
exclusivity or another unique economic benefit to the tribe.
BARRY R. MCBEE
First Assistant Attorney General
DON R. WILLETT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
Susan L. Garrison
Assistant Attorney General, Opinion Committee