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Gaming Guru

 

New Technologies Bring New Forms of Tribal Gaming

3 March 2004

On Monday of this week, the United States Supreme Court denied Justice Department appeals of cases involving new forms of electronic gaming devices which have been used by tribes in Nebraska and Oklahoma. By rejecting the appeals by the Justice Department, the High Court let stand precedent that authorized the use of devices that look very much like video gaming devices or slot machines to play "Class II" tribal games.

Under the Indian Gaming Regulatory Act of 1988 ("IGRA"), there are various "classes" of gaming setting different levels of governmental approval. Class II gaming does not require a state compact (or contract) in order for the tribes to operate this form of gaming. Instead, Class II gaming is regulated by the National Indian Gaming Commission ("NIGC"), which inspects and oversees such gaming. This means that neither the Governor nor the State Legislature play a role in allowing these games on reservation lands.

Class II games are defined by IGRA to consist first of bingo, "whether or not electronic, computer, or other technologic aids are used in connection therewith," and also includes "pull-tabs, lotto, punch boards, tip jars, instant bingo, and "other games similar to bingo." "Lotto" in this context is defined to mean a board game played with counters, similar to bingo. It is not any form of lottery operation.

According to the government's appeal, the two devices at issue in both cases resembled slot machines, but dispensed bingo or pull-tab games. The lower courts had ruled that these devices could be used as "electronic aids" to bingo for the Class II market. The prior decisions had also resulted in an "Advisory Opinion" from the NIGC late last year suggested that these games can be used if they meet certain requirements.

National Indian Gaming Commission Chair Phil Hogen reacted to the Supreme Court's decision as follows:

"The Supreme Court's decision to let stand the decisions of the Courts of Appeal in these significant cases addressing the scope of gaming by Indian tribes, permissible as Class II and without the requirement of a Tribal-State compact, brings further clarity to an issue important to gaming in Indian Country and its thorough regulation."

"Those earlier decisions formed the basis of regulatory steps the National Indian Gaming Commission has taken recently to distinguish Class II devices that tribes can use in the absence of compacts. Further progress in this area can now be made, and hopefully soon the controversies in this area will be put to rest."

Tom Nelson the former Director of Licensing and Enforcement for the Michigan Gaming Control Board ("MGCB") and now a consultant with Gaming Regulatory Consultants ("GRC") (www.GRCgaming.com) has been closely monitoring these developments. Regarding this recent court decision, Tom Nelson said, "This clears the way for the NIGC to draft appropriate technical standards that will provide greater certainty as to what is a Class II game."

Gaming Regulatory Consultant's other co-owner, Pat Leen, the former Compliance Manager and Manager of the MGCB Gaming Laboratory added: "That, in turn, will allow manufacturers who have produced Class III games to enter this market. This will provide a greater variety of Class II games in the long run."

The National Indian Gaming Commission is currently working on detailed guidelines relating to the approval of Class II games. With states becoming more and more resistant to gaming expansion, these games will likely proliferate rapidly to Indian casinos that have been unable to reach a compact with a state or where such devices have not been permitted in the past.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com