Turtle Talk

On April 27, 2016, California Congressman LaMalfa introduced H.R. 5079, titled the “California Compact Protection Act.” This legislation was spurred by proposals of the North Fork Rancheria and the Enterprise Rancheria in California to develop two separate gaming facilities under IGRA’s two-part determination exception. It appears intended to prevent those two tribes from developing class III gaming facilities on sites approved by the Department of the Interior in 2011.

H.R. 5079 would amend the Indian Gaming Regulatory Act itself by preventing the Secretary of the Interior from approving a tribal-state gaming compact, or prescribing class III gaming procedures, for tribes when the California State Legislature (or California’s voters) do not ratify the compact. To understand this proposed amendment to IGRA, it is important to put it into context.

IGRA’s Enactment

In the mid-1980’s, as the Cabazon case and others were progressing through the federal courts, Congress was considering several different legislative proposals to regulate Indian gaming. Congress ultimately approved S. 555, which became the Indian Gaming Regulatory Act. Many tribal leaders opposed S.555, in large part because of the provisions requiring tribes to negotiate gaming compacts with state governments as a precondition to operating gaming facilities (there are numerous references to tribal opposition in the Senate Report accompanying IGRA, Senate Report 100-446.IGRA). Those leaders believed that the compact provisions would give states a tool to prevent Indian tribes from operating gaming facilities on their lands – even where those tribes met all of the other requirements of the Cabazon decision and IGRA itself.

Members of the U.S. Senate tried to assure concerned tribal leaders that IGRA’s compact provisions could not be used by states to block tribes’ inherent right to operate and regulate lawful gaming on tribal lands, or to allow states to control activities that should be regulated exclusively by Indian tribes.

On page13 of Senate Report 100-446, Sen. Inouye acknowledged tribal opposition, and stated:

After lengthy hearings, negotiations, and discussions, the Committee concluded that the use of compacts between tribes and states is the best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of [gaming].

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It is the Committee’s intent that the compact requirement for class III not be used as a justification by a State for excluding Indian tribes from such gaming or for the protection of other State-licensed gaming enterprises from free market competition with Indian tribes.

On pages 33-34 of the Senate Report, Sen. McCain squarely addressed tribal concerns:

The Committee Report is clear as to the purpose of Tribal/State compacts as called for in Section 11(d). I understand Senator Evans’ concerns regarding the potential overextension of the intended scope of the Tribal/State compact approach. Toward this end, I believe it is important to again underscore the statement that appears on page 10 of the Report: “The Committee does not intend to authorize any wholesale transfer of jurisdiction from a tribe to a state.” From time immemorial, Tribes have been and will continue to be permanent governmental bodies exercising those basic powers of government, as do Federal and State governments, to fulfill the needs of their members. Under our constitutional system of government, the right of Tribes to be self-governing and to share in our federal system must not be diminished.

In response to criticism from Indian country, members of Congress pointed to the language of IGRA itself, which requires states to negotiate gaming compacts in good faith. Where a state does not comply with this obligation, IGRA allowed tribes to file a lawsuit against the state, and to request that the Secretary of the Interior prescribe “procedures” (i.e. a gaming compact) to regulate tribal gaming facilities. In other words, the members of Congress assured tribes that IGRA’s compact language could not be used to block tribal gaming facilities.

The Seminole Decision

Almost immediately after IGRA’s enactment, tribes and states became engaged in litigation over the compact provisions. The original fears regarding IGRA’s compact language, expressed by many concerned tribal leaders, came to pass when the U.S. Supreme Court issued its decision in Seminole Tribe v. Florida. In that case, the Supreme Court stated that tribes could not file lawsuits against states for their refusal to negotiate gaming compacts in good faith. The Court held that only the states themselves, and not Congress, could authorize such lawsuits.

Following the Seminole decision, many states began to demand that Indian tribes “share” gaming revenues in exchange for negotiating class III gaming compacts (despite the fact that IGRA itself prohibits states from imposing taxes on Indian gaming facilities). Some gaming compacts required tribes to pay between 15 and 25 percent of their slot machine revenues to the state in exchange for certain benefits (like exclusive gaming in certain markets). Other compacts required tribes to submit to state regulation of certain activities on tribal lands.

In light of the Seminole decision, tribes could not utilize the remedies Congress adopted in IGRA to exercise their inherent right to operate and regulate gaming facilities on their lands – the right recognized by the Supreme Court in the Cabazon decision.

IGRA Today, and H.R. 5079

The State of California, alone among the states, agreed to waive its sovereign immunity in 1999 to allow Indian tribes to file a lawsuit against the state for failure to negotiate gaming compacts in good faith. The State of California is the only state where the entire Indian Gaming Regulatory Act – including its remedial provisions – is in full effect.

In recent years, the Obama Administration has sought to push the playing field back toward the balance Congress originally adopted in 1988. The Department of the Interior has disapproved gaming compacts where states have demanded revenue sharing payments that amount to illegal taxes under IGRA. It has also disapproved compacts that allow states to regulate tribal activities beyond those allowed by IGRA.

In addition, the 9^th Circuit Court of Appeals issued a landmark decision in 2010, when it ruled that the State of California’s demands for revenue sharing payments from the Rincon Band of Luiseno Indians violated IGRA. Following that decision, the Rincon Band of Luiseno Indians was able to get a gaming compact through IGRA’s remedial provisions (i.e. “Secretarial procedures”). That result was only possible in California.

Elsewhere around the country, tribes and states have been engaged in litigation about IGRA’s compact provisions – especially as they relate to revenue sharing, taxes, and regulation of activities on tribal lands. These lawsuits have happened recently in Florida, New Mexico, South Dakota, Oklahoma, and California.

Congress has never amended IGRA’s compact provisions. The National Congress of American Indians, the National Indian Gaming Association, tribal leaders and Indian gaming advocates have long opposed efforts to amend to IGRA that do not include a remedy to the Supreme Court’s Seminole decision.

H.R. 5079 would be remarkable for several reasons. First, it would mark the first amendment to IGRA’s compact provisions in the law’s 28-year history. Second, it would constitute a federal rebuke of California’s policy decision to give full effect to IGRA. Third, it would enshrine the Seminole decision into IGRA itself – marking a significant departure from the compromise approved by Congress in 1988.

This last point merits some emphasis. As explained above, Congress passed IGRA in the face of significant opposition from Indian country. That opposition was based on concerns that IGRA’s compact language could be used to deny the inherent rights recognized in the Cabazon decision. Congress responded to those concerns by assuring Indian country that its inherent rights were not subject to a state veto (unless the state itself opted to outlaw gambling in all of its forms). H.R. 5079 would mark a dramatic shift in congressional policy, because it would modify IGRA to subject tribes to a state veto of the rights recognized in Cabazon.

Given the amount of litigation pending around the country on these issues, combined with the legislative process, it is very possible that H.R. 5079 could be expanded to affect tribal-state gaming compacts across the country – further solidifying the Seminole decision as federal policy. Watching this play out will be very interesting.