Those of you out there interested in Native American casinos and not receiving San Diego 6 News may not have heard yet, but it was reported on June 2nd 2009, that the Native American tribe the San Pasqual Band of Mission Indians filed a colossal $550 million claim, the previous day, against the state of California. This claim is required before a lawsuit can be brought. The $550 million is to compensate for lost revenue due to Governor Schwarzenegger’s rejection of Class III gaming licence applications for a number of Native American casinos owned by the tribe.
Native American casinos built on tribal lands are unlike other casinos in that they are not subject to direct state regulation. This is due to a Chippewa couple’s successful challenge of the State’s right to tax their property. After various appeals the Supreme Court ruled that States do not have the right to tax Native Americans on Native American land and furthermore and most crucially here, that States do not have the right to regulate Native American activity on Native American reservations.
This ruling led to innovative Native Americans building Native American casinos which could offer larger cash jackpots, the Native American casinos proved popular with all Americans and thus a seemingly innocuous property tax bill led to the billion dollar industry that Native American casinos have become today. The industry however, is not without regulation, though this is more of a Federal matter than a State one. After a series of court cases in the late seventies and early eighties, the Indian Gaming Regulatory Act (or the IGRA to those in the know, yes that is you as well now!) was introduced in 1988.
The act sets out three classes of gaming, known simply as Classes I, II and III. Gaming Classes I and II, include traditional Indian games and bingo. Class I is solely regulated by Tribal Government and Class II is on the whole regulated by Tribal Government but is overseen by a Commission. Class III gaming is what one would usually associate with Native American casinos, Roulette, Slots, Poker, Blackjack, Craps etc. The IGRA restricts class III gaming until certain stipulations are met. One of which, of particular interest when looking into this case, is that the tribe and the state must have negotiated a compact.
Compacts are agreements which are made in good faith between the State and the Native American casinos. In this case the state compact specifies that 42,700 Class III licenses are to be made available to Native American tribes, the claim alleges however, the State of California has only awarded 32,151 and is therefore denying the Native American casinos 10,549 licenses.
It would seem a straightforward case on first sight, in that the State does not seem to be complying with the compact. Yet these cases are not usually without controversy. Keep your eyes peeled for more on this fascinating case coming soon.
Article written by Victoria Fell, June 2009.
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