*1 [835 72] NE2d 802 NYS2d Joseph George al., et v Appellants-Respondents, Dalton York, al., as of the State of et Governor New
Pataki, (Action al., Respondents-Appellants, et No. Respondents. 1.) George Appellant-Respondent, Karr,
Mrs. Lee Pataki, York, al., Governor the State et Respondents- (Action 2.) al., Appellants, et No. Respondents.
Argued 2005; May 3, March decided *3 POINTS OF COUNSEL (Cornelius Murray Aronowitz,
O’Connell and D. Albany James A. Shannon of counsel), for appellants-respondents the first above-entitled I. B action. Part of of chapter 383 Laws 2001, of the Governor to empowering compacts enter into with Indian authorizing tribes them to operate commercialized casinos, violates article 9 of I, § the New York State (Matter King Cuomo, v v Settle Constitution. 247; 81 NY2d of People Evrea, Rathbone, Van v Anderson 280; 49 NY 434; 145 NY Regan, Martinez, v Santa Clara Pueblo v 356; 53 NY2d 436 US Georgia, v Cherokee Nation 49; Worcester v 1; Pet [30 US] 5 Georgia, Cook, United v States 515; [31 US] 6 Pet 922 F2d 1026, States, cert sub denied nom. Tarbell v United 941; 500 US Corp., Dev., Catskill v Park L.L.C. Place Entertainment F 217 McCall, Blue Cross & Blue Shield Cent. N.Y.v 423; 2d Supp of 246 160.) chapter D of of the Laws of
89 authorizing II. Part 383 NY2d participation in lot York State’s a multistate
New tery, article 9 of the New York State Constitution. violates (Ramesar York, 811; 224 AD2d 88 NY2d v State Newof Mgt. Servs., 523; v 513 NY2d United States Molina v Games 58 Corp., Grezo, 854; F2d Hess v Port Auth. Trans-Hudson 566 Fund, & 44 30; US John Co. v State Univ. Constr. NY2d Grace Operating Auth., Tr. 84; v Manhattan & Bronx Collins Surface 563.) York, III. 361; 62 Braun v State New 203 Misc NY2d of chapter D of were B, C and of 383 the Laws of 2001 Parts adopted III, York State violation of article of (People Reardon, rel. Hatch v 184 NY Constitution. ex Long Clark, 26 2d 152; Franklin Natl. Bank Is. v Misc US of Pataki, v 724; Cuomo, 60; 176 AD2d 96 NY2d Winner v Silver 420; v 532; Matter v 31 NY2d Rathbone Rockefeller, Schneider of People, Wirth, 9; v 459; NY v 7 NY Matter Smith Newell of County, Supervisors 187; Fin Board St. Lawrence 148 NY ger Razing Pari-Mutuel Lakes Assn. v New YorkState Off-Track Betting Flushing Commn., v 207; Natl. Bank Munici NY2d 731.) City pal Corp. N.Y., Assistance 40 NY2d (Caitlin Halligan, Spitzer, Attorney Albany General,
Eliot J. Gregory Smirlock, and Marcus J. Mastracco Daniel Silbert counsel), respondents-appellants the first above- correctly plaintiffs’ I. The dismissed entitled action. court below challenges provision part B the Laws (New authorizing gaming. v of 2001 Mexico Mescalero Apache Mis Tribe, 324; Cabazon Band 462 US v California Washington Indians, 202; Tribes sion 480 US Confederated *4 Reservation, v No 134; Colville 447 US Matter Orens of Contrs., Inc., 564; vello, 458 180; NY2d v Oceanic US 99 Griffin Sylvania, Safety Inc., US GTE 447 Consumer Prod. Commn. v Pequot Conn., 1024; 913 F2d 102; Mashantucket Tribe v State of Supp State, v v F States 1268; Coeur Tribe 842 United d’Alene Saratoga County v Gabriel, 89; Commerce 125 F3d Chamber of 801.) lottery lottery au Pataki, II. terminal 100 The video NY2d chapter by part is a of the Laws of 2001 thorized C of 383 (Matter Apple constitutionally lottery. Big Food valid Vendors’ of Panel, 402; v 90 NY2d Whitman Assn. v Street Vendor Review Hayden, Trucking Assns., Inc., 457; v 531 US LaValle American Opportunity Nas Harris v Economic Commn. 155; 98 NY2d of County, Meurer, 993; 223; v 141 Misc 2d 171 AD2d Solon sau Trump People Ruggles, 424; v Hines, 93; 56 v 284 NY Hull v NY 346.) People Kim, The Perlee, Misc 2d III. 367; 228 AD2d v 154 portion requirement of their vendor racetracks reinvest a
247 (Matter purses breeding fee in track funds is constitutional. Boerner, 144; Seidletz, Misc 2d Matter von 6 Misc 58 2d of of Racing Agriculture Saratoga 583; Harness Assn. v & N.Y.State Breeding 22 Fund, 119; Horse Dev. Local NY2d Govt.Assistance Corp. Corp., 2 524; v Tax Asset Sales Receivable NY3d Matter of Towing Corp. Urbach, Moran New 443; v v 99 NY2d Cohen State of York, Salerno, 1; 739; 94 NY2d United States v 481 US Finger Racing Lakes Assn. v New State Pari- York Off-Track Betting People Commn., Mutuel 207, 1031; 30 NY2d 409 US ex Alpha Knapp, rel. Co. 48; Portland Cement v 230 NY Matter of 191.) Westinghouse Tully, Corp. Elec. v 63 NY2d IV multi lottery chapter state D authorized of 383 of the of Laws operates 2001 is constitutional because the State of New York lottery proceeds within its borders and all net are used (Hess aid of Corp., education New York. v Auth. Port Trans-Hudson 30; 513 Fund, US John Grace & Co. v State Univ. Constr. Operat 44 84; NY2d Collins v Manhattan & Bronx Tr. Surface ing Auth., 62 NY2d Braun 361; York, v 203 State Misc of 563.) 2Q01 Chapter compli V 383 of the Laws of was enacted ance III, with article 14 of the New York State Constitution. (Finger Racing v Lakes Assn. New Pari- Off-Track Betting Commn., Mutuel NY2d 409 207, 1031; US Matter of Silver, Schulz v 293, 835, 916; AD2d 86 NY2d 87 NY2d Nor wick v 923, 70 Misc 2d Rockefeller, 537; 40 AD2d 33 NY2d King Cuomo, Matter v Evrea, 81 NY2d Settle v 247; Van of 280; NY Matter v 420; Schneider 31 NY2d Matter Rockefeller, Regan, Joslin v 63 AD2d 746; Cam NY2d Matter 235.) paign Equity Marino, Fiscal v 87 NY2d Bleakley Schmidt, LLP, Platt & J. White Plains CFrederick counsel), Martin, D. Robert Meade and Susan Galváo of E. Racing Corporation, respondent-appellant
Yonkers first lottery gaming, above-entitled action. I. Video as envisioned part lottery C of the Laws of constitutes valid unambiguous language I,
under of article 9 of the lottery New York State Constitution. II. Video is a constitutional unambiguous provisions under the of article 9 of the (People New York State rel. v Constitution. ex Henderson Board Supervisors County People Westchester, 147 NY ex 1; rel. Rice, 473; O’Brien, Carter v 135 NY Matter 188 NY Sherrill 185; Burns, Protection 23; Matter 155 NY Association for *5 of King MacDonald, Cuomo, 234; 253 Matter v Adirondacks v NY of People Carroll, Alden, 247; 686; 81 NY2d v 3 NY2d Pink v 260 App Power, 800; 564, Div 285 NY Matter Berkel v 16 Van of 37.) NY2d III. The Karr that the video brief fails to establish
248
lottery
lottery
(Pe
legislation
is not a
is unconstitutional.
terminal
Finger
Racing
ople
Schuler,
684;
Misc 2d
Lakes
v
93
Betting Commn.,
Pari-Mutuel
Assn. v New York State Off-Track
946.)
Appellate
Depart
Division,
Third
30
IV The
NY2d
improperly
fixed
the constitutional
ment
crossed the line
powers
legislate.
separation
re
The
erred in
court below
of
V
(Teeval
fusing
uphold
remainder
the statute.
of
sever
People
People Mancuso,
463;
Stern,
346;
v
255
Co. v
301
NY
NY
Alpha
Knapp,
US
ex
Portland
Co. v
249
York,
v
155;
1;
NY2d
Cohen State
94
New
NY2d Dunlea v
of
Anderson,
265;
[Hartnett],
66 NY2d
Matter Klein
78 NY2d
of
662,
912;
504
v
US
Hotel Dorset Co. Trust
Cultural Resources
for
City
University
N.Y.,
358;
46 NY2d
Paterson v
State
of
of
of
of
Wolpoff
N.Y.,
Cuomo,
432;
14 NY2d
Matter
v
358; Cal. v F3d Artichoke Joe’s Grand Casino authority proper delegation legislation II. constitutes This the (Saratoga Legislature to the York State Governor. Pataki, 801; v Matter Levine Chamber Commerce 100 NY2d Bourquin Pataki, 696; Whalen, 510; v v 39 NY2d Dorst NY2d Energy Orderly 781; Cuomo, v 85 NY2d Matter Citizens Policy Cuomo, Cuomo, 398; 185; v 78 NY2d Clark NY2d Axelrod, 1; 71 NY2d Under Catholic Home Bur. Boreali v Dependent *7 344.) City York, III. This v New 65 NY2d Children of complied legislation’s fully with New York State enactment (Silver requirements. procedural Pataki, v 96 Constitution’s York, 891; Saxton 532; NY2d Heimbach v State New 59 NY2d of Carey, People Ohrenstein, 545; 342, v 153 AD2d 77 v 44 NY2d Silver, 80, 218 NY2d NY2d Matter Straniere v AD2d 89 38; of Racing Finger 825; Assn. v New York State Lakes Off-Track Betting Commn., 207; 30 Norwick v Rock Pari-Mutuel NY2d 923, 537; AD2d Matter 70 Misc 2d 40 33 NY2d efeller, of People 420; ex rel. Hatch v Rockefeller, Schneider v 31 NY2d Long Clark, Reardon, 431; Bank v 184 NY Franklin Natl. Is. of 724.) 26 Misc 2d pro Warren, Seneca, amicus curiae se Daniel T. West compelled to first action. I. New York is not allow above-entitled Gaming Regulatory of Indian Act class III under the (Rumsey Wilson, Indian Rancheria Indians v Wintun of Gaming Cases, 1250; 1094; In 331 F3d F3d re Indian Related 64 Pipefitters States, 385; v 407 US Local Union No. 562 United Turnage, Traynor [78 US] Tynen, 88; v v 11 United States Wall Mancari, States v 535; 535; 485 v 417 US United US Morton Flanagan People Kan, 54; 107; F3d v Kin 78 NY2d v Sforza, 326 Cook, Sec., v 922 500; NY2d United States Prudential-Bache 67 941.) II. The exceeded its author F2d ity 500 US (ch (Thatcher B). enacting v Mor Laws of 2001 Holberg Racing Assn., ris, 437; 184 Misc 11 v Westchester NY Cohen, 489; 581; 158 Misc Intercontinental Hotels Moskowitz v People Rico] Corp. [Puerto Golden, 45; v AD2d v World 18 People Gaming Corp., Rathbone, 852; v 185 Misc 2d Interactive Regan, 356; Ball 434; Anderson v 53 NY2d v Allstate 145 NY Plimpton Co., New York State 22; NY2d Debevoise & v Ins. Dept. 81 Evrea, Fin., v 49 657; & NY2d Settle Van Taxation 80 of 280.) erroneously Department decided III. The Third NY (Saratoga County be reversed. case and its order should Pataki, 801; v v 100 NY2d Chamber Commerce California of Spokane Indians, 202; US Tribe Band Mission 480 Cabazon of
251 Washington, 991; Indians v Seminole Tribe Fla. v F3d of of Narragansett Tribe, 44; Rhode v Indian Florida, 517 US Island Narragansett 919; 19 F3d US Indian Tribe v National 685, 513 Gaming Commn., 1335; 158 F3d Intercontinental Hotels Rico] Corp. [Puerto Golden, 9; v NY2d Band Pota Citizen Green, 179; watomi Indian Tribe Okla. v 995 F2d American Greyhound Racing, Supp Rumsey Hull, F 1012; Inc. v 2d 1250.) Wilson, Indian Rancheria Wintun Indians v 64 F3d (Neal City Brickman, Law Neal New York Brick- Offices (Vito counsel), Gold, Titone, man of & LLP Mintz J. Jr. of (Mi- counsel), Meyer, English Suozzi, Klein, PC., & Mineóla counsel), chael A. tion, for Standardbred Owners Associa- Ciaffa others, Inc. and amici in the curiae first and second above- Appellate adopted erroneously entitled actions. Division “expenses” may restrictive the kind view “proceeds” deducted from video terminal article under (Finger Racing 9 of the State Constitution. Lakes Betting Assn. v Commn., New York State Pari-Mutuel Off-Track 207; Boerner, NY2d Matter 58 Misc 2d Matter 144; von Saratoga County Seidlitz, 583; 2dMisc Chamber Commerce Saratoga Racing Pataki, 801; 100 NY2d Harness Assn. v *8 Agriculture Breeding Fund, & N.Y. State Horse Dev. NY2d 119.) (Ran-
Featherstonhaugh, Wiley, Clyne Albany Cordo, LLP, & counsel), Thoroughbred dall J. Ezick of for New Horse- Association, men’s Inc., curiae in amicus the first and second statutory requirement per I. above-entitled actions. The that a centage of the racetrack fee vendor revenues allocated breeding purses and funds enhanced is consistent with other (Matter statutory regulation racing industry. Boerner, of the of Finger 58 Mise Seidlitz, 2d Matter 144; 583; von 6 Misc 2d Racing Lakes Assn. v New York State Pari-Mutuel Off-Track Betting Saratoga Racing Commn., 30 207; NY2d Assn. Harness Agriculture Breeding Fund, v & N.Y.State Horse Dev. NY2d 119.) II. Funds allocated a vendor fee are not of the net proceeds and there is no constitutional as to limitation how those monies are thereafter allocated either the vendor or Legislature. Legislature the III. The Division of the the Lottery oper have the discretion to establish the fees to vendor lottery system ate the the record fails to establish abuse setting of discretion in the fee. video terminal vendor
OPINION OF THE COURT J. ClPARICK, In we addressed whether the had the author- Governor compacts pursuant ity Indian tribes the to enter into with (25 (IGRA) Gaming Regulatory Act of 1988 USC federal Indian 1166-1168) allowing §§ §§ casino on 2701-2721; 18 USC (see Saratoga County the Chamber Indian lands within state [2003]). determined that Pataki, Commerce We NY2d entering unilaterally negotiating and the Governor’s actions in powers compacts separation violated into principles tribal-state policy decisions within because such actions involved compacts Legislature. power invali- of the Since the were the dated on this casino questions ground, the whether we did not reach compacts gaming permitted violated such tribal-state gambling prohibitions 9 of of article the commercial preempts York State Constitution whether IGRA presented squarely for our this area. Those issues are now presented validity video review. Also tery gaming is the constitutional lot- participation in
and New York’s the multistate lottery. Mega Millions
Chapter of 2001 introduced in the Sen- 383 of Laws was Assembly evening 24, 2001, on October ate and early morning 81-page 2001. The bill October range provisions part, aimed, at counter- contained wide negative ing anticipated at- economic effects terrorist generating September and at revenue. The tacks 11th message necessity, certifying the need submitted Governor on bill, vote had not been for an immediate legislators’ which required three calendar desks final form days Const, III, NY art The enacted the shortly immediately signed it and the into law bill Governor thereafter. provisions appeal parts and D of B, at issue on this are C Adding B autho- new Executive Law compact with to enter into “a tribal-state
rized Governor [federal] pursuant of Indians Seneca Nation *9 Gaming Regulatory Act . . a memo- of 1988 . consistent with (L [parties]” understanding 2001, ch between the randum 2). understanding permitted part B, 383, The memorandum of gaming negotiate compact parties III to allow class the adopted by compact up three The would be deemed casinos.1 agreement Legislature the certified the the when Governor gam- among things, provided access to for, other reasonable heavily type gaming under gaming regulated is the most 1. Class III examples “including III regulations give gaming of class The federal IGRA. [a]ny banking as or black- game” . . baccarat but not limited to . house satisfactory system ing recovery unions, a facilities labor civil adequate liability B and insurance. Part also autho- compacts rized Governor to enter into tribal-state with un- gaming up named tribes to to three class III fa- allow additional compacts cilities Ulster and Sullivan counties. Those would adopted likewise be deemed when the they requisite met union, Governor certified labor civil recovery liability requirements. and insurance (VLTs)—
CPart authorized use of video terminals including Aque- racetracks, Tax under Law 1617-a—at several (see Finger Yonkers, duct, Monticello, Lakes and Vernon Downs 1).§ part 2001, 383, L ch The C, bill also amended Tax Law § 1612 to include a revenue distribution scheme for the VLT (see 2).§ proceeds part L 2001, 383, C, ch Between 12% and designated of the total was 25% revenue vendor’s fee. The legislation provided portion fee vendor’s must be racing industry by enhancing applying reinvested purses it to appropriate breeding Finally, part and to the fund. D §§ amended Tax Law 1604 and 1617 to authorize the State’s (see
participation multijurisdictional lottery in a L ch §§ part D, group taxpayers, legislators
Plaintiffs are a of citizen state not-for-profit organizations “opposed spread gambling.” They January commenced this action summary judgment declaring parts Plaintiffs moved for CB, chapter D unconstitutional. Defendants (Park Place) intervenor-defendant each cross-moved for sum- mary judgment dismissing complaint. Supreme Court granted plaintiffs’ motions, the cross motion denied for sum- mary judgment challenged portions and declared the 383 of the Laws of 2001 constitutional. Appellate comprehensive opinion,
The modified, Division in a by reversing portion Supreme order Court’s that declared part C constitutional, and, declared C unconstitutional [2004]). modified, so affirmed AD3d 62 Court message necessity determined that the was Governor’s suf- requirements III, to meet ficient of article of the State found the State Constitution. It further that since allows the type issue, limitations, with certain “properly subject compact of a B” was tribal-state machines, jack, keno, betting games including sports roulette or casino slot 502.4). and lotteries 25 CFR *10 (11 83). Similarly, Appellate AD3d at the was constitutional lottery, authorizing D, that the multistate Division found constitutional—finding that the State “retains sufficient was lottery satisfy supervision the ... the over multistate lottery ‘operated by requirement be constitutional that ” (11 omitted]). [citations at The state’ AD3d Court also lottery proceeds determined that the net from the multistate (see properly state were dedicated to education AD3d 106). at part C—authorizing lottery operation
As to of video Appellate that were terminals—the Division concluded the VLTs components and, such, of lotteries rather than machines as slot 94). constitutionally permitted However, 11 AD3d at were legislation portion direct- the Court determined that the ing percentages that certain of the vendor fees be reinvested for enhancing breeding purses appropriate an did fund not requirement lottery proceeds meet the be constitutional exclusively support of dedicated education within 99). Appellate the rev- state 11 AD3d Division found enue distribution defect was severable because severance “either inflated fee or fee at all” would result in vendor no (11 Appellate Thus, AD3d at Division declared C appeal, in full. Plaintiffs and defendants unconstitutional now (1). (b) cross-appeal, right pursuant to CPLR 5601 We as modify parts Appellate B, C and D Division declare that respects all constitu- 383 of Laws of are tional.
New York State Constitution generally prohibits gambling, While our State Constitution subject exceptions. prohibition limited For this broad example, provides the Constitution pool-selling, lottery tickets,
“no or the sale of bookmaking, gambling, except other kind of operated by and the sale of lot- lotteries the state tery may au- in connection therewith as be tickets legislature, prescribed net thorized and exclusively proceeds applied to or of which shall be support in this state aid or of education as legislature may except pari-mutuel prescribe, and may prescribed by betting horse races legislature shall derive and from which the state government, support reasonable revenue for the *11 shall hereafter be authorized or allowed within this (NY [1]). § state” Const, I, art 9 municipalities
The Constitution further allows individual to by general special authorize, vote election, or certain “games bingo, types games of chance”—such as lotto or other winning where a winner is determined on the of a number, basis (see [2]). symbol § types color or Const, I, NY art 9 These games requires are Constitution, further restricted which only religious, nonprofit organizations certain or charitable (see games types will be authorized to conduct these NY [1]). § [2] only Const, I, art 9 In addition, “bona fide” members particular organization permitted “participate are to management operation game” permit- or of such and are not (see participation ted to receive remuneration for their NY [3]-[4]). § [2] proceeds Const, I, art 9 Further, the entire net games purposes from these must be dedicated to the lawful (see [2]). organization § [2] Const, NY I, art 9 The Constitu- prizes awarded—allowing tion also restricts the that can be no single prize more than for a $1,000 $250 a maximum total of (NY “any prizes series on one Const, occasion” art 9 [2]). argue prohibits
Plaintiffs that because the State Constitution gambling, subject specifically exceptions, commercial to stated Legislature may not authorize the Governor to enter into compacts, may tribal-state nor it allow video terminals permit participate lottery. the State to in a multistate Legislative strong presumption enactments are to entitled “a constitutionality” Schulz v State York, 84 NY2d [1994]). presumption 231, “While the irrefutable, is not parties challenging duly enacted statute face initial burden demonstrating invalidity ‘beyond the statute’s a reasonable ” (LaValle Hayden, quoting doubt’ v [2002], 98 NY2d [1997]). People respect Tichenor, 89 NY2d With parts legislation, plaintiffs C and D of the failed have to rebut strong presumption. inquiry that part However, the is different as to given expressly prohibits
B, the State Constitution gambling. commercial B, For we must instead determine preempts proscription whether IGRA this constitutional because gaming the State III allows class for certain charitable purposes. other
Background of IGRA analysis Necessary of the federal to our determination is (25 §§ Regulatory Gaming 2701-2721; Act of 1988 USC Indian 1166-1168). Contrary plaintiffs’ §§ assertion, IGRA 18 USC preempted but the field in the area of has gaming. negotiate regulate permits IGRA with tribes to states self-sufficiency part, promote the and eco- enacted, in was development [4]; 25 USC 2701 nomic of Indian tribes [1]). Congress have the that “Indian tribes determined gaming activity right regulate if on Indian lands exclusive activity specifically prohibited Federal law is not a matter of not, which does and is conducted within State gaming activity” policy, prohibit public criminal law and *12 (25 [5]). § 2701 USC separates types gaming into three classes—
IGRA
subject
degree
regula-
II and III—each
to a different
classes
solely
prizes
games
gaming
for
I
of “social
tion. Class
consists
engaged
gaming
minimal
or traditional forms of Indian
value
by
with,
in connection
tribal
of,
as a
individuals
(25
§
[6];
USC 2703
see also
jurisdiction
ceremonies or celebrations”
502.2).
solely
type
gaming is
within the
CFR
This
(see
§
[a]
subject
25 USC 2710
not
to IGRA
of the tribes
is
[1]).
types
gaming
bingo,
certain
lotto and
Class II
includes
banking
games
excluding
games—specifically
such as
card
card
[a]-[c]).
(see
§
[7] [A], [B]; 25 CFR 502.3
25 USC 2703
baccarat
subject
activity
permissible
land,2
to the
II
is
on Indian
Class
permits
jurisdiction,
otherwise
if located in a state that
tribe’s
passes
any purpose
gaming
if
Indian tribe
such
by
approved
Indian
the Chair of
National
that is
resolution
[1]).
(see
§
[b]
Gaming
25 USC 2710
Commission
remaining
gaming
types
gaming
not
includes all
Class III
[8]).
(see
gaming
type
§ This
I or II
25 USC
within class
requirements
highly regulated. In addition to the
most
gaming—a Chair-approved
ordinance and loca-
tribal
class II
permits
gaming—the class
such
in a
that otherwise
tion
state
according
gaming
tribal-
valid
must also be conducted
III
[C]).
(see
seeking
§
[d] [1]
compact
A tribe
25 USC 2710
state
any Indian
the limits of
as “all lands within
Indian lands are defined
by
in trust
reservation;
any
is either held
and . . .
lands title to which
any
by
or held
Indian tribe or individual
for the benefit of
United States
against
by
States
subject the United
individual
restriction
Indian tribe or
(25
governmental power”
exercises
over
an Indian tribe
alienation and
which
[4]).
§USC 2703
request
conduct
III
class
on Indian land must
that the
negotiate
attempt
develop
state
with the
tribe
a tribal-
(see
compact
regulate
gaming activity
state
25 USC 2710
[A]).
[d] [3]
“Upon receiving
request,
such a
the State shall
negotiate
good
with the Indian tribe in
faith to enter into such
(25
[A]).
compact”
[d] [3]
Any
a
subject
compact
USC 2710
approval
Secretary
of the Interior
[B]).
[d] [3]
USC 2710
Supreme
Prior to the enactment of IGRA, the United States
applicability
Court
addressed the
of state law to Indian
within the state of California
v Cabazon Band
California
[1987]).
Mission Indians,
In whether the law at issue could be enforced on Supreme recognized land, Court a distinction be- *13 prohibitory tween whether regulatory the law was in nature (see 209). purpose Cabazon, 480 US at If the of the law is to prohibit specific prohibitory conduct, it is considered and can be enforced on Indian If, land. on the other hand, the law allows “subject regulation,” regulatory conduct the law is (see 209). not enforceable on Indian land Cabazon, 480 US at “The shorthand test is whether the conduct at issue violates 209). public policy” (Cabazon, the State’s 480 US at Because State activity, allowed “a substantial amount of including bingo,” the Court determined that the statute at issue (see regulatory prohibitory was rather than Cabazon, atUS 211). The Court then went on to decide that California’s inter- regulating bingo est in compared was insufficient as with the significant tribal interests. (see
Congress response Rep enacted IGRA in to Cabazon S Cong, reprinted 100-446, No. 100th Sess, 2d in 1988 US Code 3071). Cong legislative history & Admin News, at The indicates Congress affirmatively intended that “unless a tribe elects jurisdiction lands, extend to tribal have State laws unilaterally jurisdic- Congress impose not or allow State will regulation gaming of Indian activi- tion on Indian lands (S Rep Cong, reprinted Sess, 5-6, ties” 100th 2d at 100-446, No. 3075). Cong News, Admin at The 1988 US Code & tribal- way compact designed state was reconcile tribal (see Rep concerning gaming III 100- interests class S No. state Cong reprinted Cong, 446, Sess, 6, 2d at 1988 US Code 100th 3076). & at News, Admin expressly preempt
Significantly, was “intended to IGRA governance gaming on Indian lands. field in the activities competing Consequently, Federal courts should balance to determine the extent to Federal, State, and tribal interests (S Rep gaming 100- which various activities are allowed” No. Cong Cong, reprinted in Sess, 6, 100th 2d at 1988 US Code 3076). Congress expected that the courts News, & Admin at apply prohibitory/regulatory distinction when decid- would ing permitted state, in a in a different was but whether (see way Rep applied 100-446, S No. than it was Cabazon Cong Cong, reprinted & Sess, at in 1988 US Code 100th 2d determining Specifically, News, rather than Admin at apply degree “the lands, to Indian to which a state’s laws would a State’s civil courts will consider distinction between body applicable, laws whether a of law criminal to determine prohibit allow or certain law, as a matter of Federal to either (S Rep Cong, 100-446, 2d at Sess, No. 100th activities” 3076).3 Cong reprinted News, & Admin at 1988 US Code Following the Second Circuit ad- IGRA, the enactment presented here Mashan- a similar situation to dressed [2d Pequot Cir Conn., 913 F2d 1024 tucket Tribe State 1990]). allowed determined that since Connecticut court highly gaming—although restricted class III it was certain only regulated prohibited than rather statute—the State type 1031-1032; F2d see Mashantucket, *14 history discussing the legislative specifically Although portion 3. the appli- referring gaming, II prohibitory/regulatory distinction was class and virtually respect to both II language in is identical with class cable IGRA [A]; [gaming [d] [1] is located gaming § [b] [1] [B] 25 USC 2710 class III by any gaming purpose person, for “permits in a that such state otherwise persuasive language reason treat the organization entity”]). or There is no differently. in these two subsections Arapaho Wyoming, also Northern Tribe v 389 F3d 2004]).4 [10th Cir Compacts
Tribal-State although that allows for Plaintiffs assert Constitution regulated prohibits types gaming, completely certain it still gaming. commercial the state to However, IGRA does not allow language purpose gaming. consider the behind the gaming permitted statute that is clear class III will be when permits gaming any purpose by “located in a State that such for (25 any person, organization, entity” § [d] [1] [B] or USC 2710 added]). [emphasis language intentionally This broad and by gaming permitted includes the limited York State New supervision authority Constitution under the of the New Racing Wagering Municipal {see York State Board General seq.). Through Congress 9-A; Law art IGRA, 9 NYCRR 5600.1 et preempted has area. the states Since York allows gaming—for purposes—such some III forms of class charitable gaming may lawfully provided be conducted on Indian lands it pursuant authorized tribal ordinance is carried out [1]). § compact {see [d] to a tribal-state 25 USC 2710 reject argument specifically We likewise IGRA provides prohibiting gambling apply that state laws will on § argue Indian lands. Plaintiffs that 18 for USC 1166 allows gambling constitutional ban commercial in article 9 to he applied to Indian lands. “all That section states that State laws pertaining regulation, licensing, prohibition or gambling, including appli- but not to criminal limited sanctions apply country thereto, cable shall same manner Indian apply and to the same extent as laws in the elsewhere (18 [a]). However, State” USC 1166 further statute provides pursuant ap- III that class conducted to an proved compact “gambling” tribal-state will not be considered [2]). purposes {see [c] Thus, of that section 18 USC prohibition against the state constitutional commercial apply compliance does not are in lands that with IGRA governed compact. a valid tribal-state Arapaho in the inter- The Northern court noted there is a conflict negotiate concerning pretation of with all IGRA—whether state must tribes any type gaming, III forms of class III when it allows of class only negotiate specific games permitted it in the whether must for the state 1310-1311). Arapaho, Northern 389 F3d at We do not address this issue authority plaintiffs challenged compacts to enter into tribal-state have negotiate games. general, authority particular rather than *15 260 require enter that does not states to
Plaintiffs state IGRA arguing compact that, as a tribes, into a tribal-state with Indian may “[t]he sovereignty, Federal not matter of state Government regulatory compel a the States to enact or administer federal (New [1992]). program” States, v 505 188 York United US Through may do so. However, it be to the state’s benefit granted degree authority a over IGRA the states are certain they gaming have class III sovereignty that otherwise would not due (see Flor- nations Tribe Fla. v Indian Seminole [3]). § ida, [1996]; Const, Thus, US art 8 517 US through process, compacting a benefit on IGRA confers by allowing negotiate input state it to and to have some into gaming how III will conducted. class authority this in if the state either However, is limited that negotiate good not in faith, does with a tribe or does do so not (see may bring Federal District 25 USC the tribe suit in Court § [d] [7] [B]).5 If the court determines the state has not good parties negotiated faith, in the court will order “to (25 60-day compact period” conclude within a USC [iii]). § agreement [d] [7] [B] If an is not reached within appoint time, mediator, that will who “shall select court [from state] proposed compacts from the tribe and the the two comports any the one with the terms of this Act and which best findings applicable other Federal law and with the and order (25 [iv]). timely [d] [7] [B] If the the court” USC 2710 state (see agrees, compact compact will the tribal-state that become which shall be made the United States the dissent’s specifically commercial negotiate extension of commercial intention to exemption federal statute and can Certainly, Const art 5. The G.B. Smith dissent particularly extend, Land; Constitution area sovereignty. [1985] VI and the this benefit. if commercial states from state law will be good gambling, according do so [2]). proposition G.B. true [referring to Indian or Laws of faith as Federal law thus Department Judges unmistakably Smith in the context of Indian “[t]his This only Pursuance Supremacy gambling were would be dissenting be affected every was Constitution, suggests clear” done with the to this preempts State to Indian “lifted correct, thereof . . . shall be the exemption from Clause of the United States Constitution Interior, op through a shall (Montana to be was without only dissent, but even lands, be bound contrary to which extended to non-Indian matters, when here express our The constitutional State was constitutional amendment. Laws of cannot be or lands held state Blackfeet we constitutional Congress authority notwithstanding” thereby, any Thing Congress are where intent of taxes]). the United dealing supreme Law preempted Tribe, has a traditional required has seen fit in trust legislate protecting ban. made with the 471 US ban on States lands, This (US its in [vi]). (or [d] [7] [B] agree 25 USC 2710 If the state does not sovereign immunity invokes under the Eleventh Amendment to Constitution), Secretary the United States of the Interior upon procedures conducting and the tribe will decide class [vii]). [d] [7] [B] III 25 USC 2710 Thus, if III class permitted any purpose, including in the state for *16 strictly purpose, permitted charitable it will be on Indian land consequence, with or without the state’s involvement. Given obviously regulation state involvement and is to be favored. plaintiffs argue
In requires alternative, that even if IGRA gaming permitted that class III be lands, on Indian the same required argu- result is not on land that is not Indian land. This portion part ment is directed to the B that authorizes the compacts allowing up Governor to enter into tribal-state (see three casinos in Sullivan and Ulster counties L 2001, ch [b]). § § B, 2, codified at Executive Law 12 With a few exceptions, gaming generally prohibited acquired by on lands Secretary of the Interior after the enactment of IGRA and (25 § held “in trust for the benefit of an Indian tribe” USC 2719 [a]). Gaming, permitted however, will be when Secretary, “the after consultation with the Indian appropriate tribe and including State and officials, local nearby
officials of other Indian tribes, gaming newly determines that a establishment on acquired lands would be in the best interest Indian tribe and its members, and would not be surrounding community, only detrimental to the but if gaming the Governor of the State in which the activity Secretary’s is to be conducted concurs (25 [A]). [b] [1] determination” USC 2719 plaintiffs urge Here, provision that both the constitutional public policy against and New York’s commercial prevent agreeing the Governor from that there would not abe detrimental effect on the communities at issue if casinos were provision located in those areas. The constitutional is relevant (d) (1) (B) only— to the determination under 25 USC gaming permitted any purpose whether class III and thus gaming whether should be allowed on Indian lands. Section (b) (1) (A) does not call for the Governor to make a deter- legality gaming. mination as to the Rather, the determination surrounding whether munity would be detrimental to the com- analysis potential negative
entails an of the conse- quences presented by presence casinos, such as social plainly consequences. not The Constitution does
or economic determining prevent no from that there would be the Governor community.6 particular detrimental effect on argument pertaining B is that it was last Plaintiffs’ authority delegation legislative Legislature improper for the compacts to execute tribal-state to authorize the Governor part B, 2, L ch and Ulster counties Sullivan [b]). Saratoga, § 12 In we determined codified at Executive Law “unilaterally authority did have the that the Governor negotiate compacts under . . . (100 and execute tribal IGRA” 824). at Court observed issues NY2d policy compact deci- involved would be covered tribal-state Legislature province Sara- sions that were within the toga, 100 NY2d to execute the
Here, the
authorized the Governor
specified
agreements
compacts
would
that such
tribal-state
legislature upon
governor’s
cer-
“deemed ratified
(L
provisions
compacts
certain
tification” that
contained
*17
[b]).
§
§
part
at
Law 12
2001,
383,
B, 2,
ch
codified
Executive
required
compacts
example,
Legislature
that the
contain
For
the
provide
unions,
the tribe
access
labor
assurances that
would
liability
recovery system
adequate
insur-
and sufficient
an
civil
(see
§
part
383,
Law
2001,
B, 2,
ance
L
ch
codified at Executive
[b]).
necessary policy
made the
12
The
has thus
compacts must
the
determinations
as to what
tribal-state
implement those
authorized the
contain and has
Governor
by executing
speci-
compacts
policy
to their
determinations
the
authority.
permissible delegation
the
That
This
a
fications.
legislation
specify
the
of the
or
does not
the names
tribes where
(see
change
not
this determination
will be located does
casinos
[1995] [“there
Bourquin
781,
need not
Cuomo,
v
NY2d
whether
retary
rounding
certain
land in trust
State and local taxation’
City
in 25
This
Secretary
cal tax rolls”
1478,
“unilaterally
holding
USC
We
1482-1483
and
property
Sherrill
the Oneida
community
after
note that
is consistent
reassert
and
determining
Governor
purchased
[2005]).
Indians and
which
Oneida
the United States
sovereign
the
“authorizes
”
with our
Indian Nation
Tribe would
(City
on land
USC
authorize
Nation
Court
provides
control and remove these
Sherrill,
interpretation of
that
the
determined that
was
have to follow the
was
Supreme Court
would
[b]
Secretary
responsible
544 US at
[1]
N.Y.,
the land ‘shall
once an Oneida reservation
on lands held
[A]).
544 US
be detrimental
of the Interior to
IGRA, allowing
the Oneidas
—,
from the
parcels recently
procedure set forth
property taxes on
Video constitutionality challenge C of Plaintiffs next chapter 383 of “the the Laws of 2001. That section authorized operation lottery gaming Aqueduct, Monticello, of video at Finger Yonkers, racetracks,” Lakes and Vernon Downs pursuant certain other racetracks that are III licensed article Racing, Wagering Breeding of the Pari-Mutuel Law and lo- (L county approved lottery gaming cated within that has video 1).§ C, ch lottery played using lottery The video terminals, video system through which are each connected to central use controllers”—computers “site that connect several VLTs both system. to each other the central In the most common lottery gaming, participants form of video at individual VLTs play against by purchasing each other electronic instant tickets pool. play, place from a finite In order to or individuals cash currency purchase other into the VLT to an electronic instant player “game ticket. The then determines the identifier” price purchased. be electronic ticket to The VLT displays receives the next ticket from site controller and predetermined player If wins, outcome—win loss. print “electronically
VLT will encoded instrument” which play games can used to be additional video or can redeemed for value.7 *18 argue lottery gaming played
Plaintiffs that because video is using they VLTs, the machines, which contend resemble slot lottery lottery state-sponsored all, video is a at rather but gambling by slot machine forbidden the But Constitution. Constitution, whereas slot machines are not mentioned they expressly permitted operated are, lotteries are when by lottery, lottery Thus, if the is a State. video statute providing regardless for it is constitutional of whether keno, only game lottery play 7. The electronic other offered video Quick which modeled the current Draw after Lotto and lotteries numbers, symbols in multiple players selecting a or involves series of colors randomly by the hopes matching drawn of their selections those later system. central 264 or even meet like, also look play lottery
terminals used of, the Penal definition slot machines.8 Law term we “lottery,” Since the does not define the Constitution a within the mean lottery first constitutes must determine what lottery— § The Law definition ing I, of article 9. Penal (see Penal Law consideration, chance and consisting prize Hines, [1940], 101 overruled [10]; § 225.00 v 284 NY People [1972]; Kohut, v 30 NY2d 190-191 grounds on other People Perlee, Dept 1996])—provides [1st 228 AD2d Trump this def because, as the Court below recognized, little guidance, all or games forms applies equally gambling inition for state- chance. the limited constitutional Clearly, exception (such as read allow casino game run lotteries cannot be roulette) blackjack lottery oper or constitute a valid if poker, with the Division Thus, ated we by agree Appellate State. (see 92) lottery at requires AD3d that constitutional and multiple the use of tickets something more—specifically, against to a opposed single player competing as participation, machine. single that an au- clear from the Constitution language
It is I, art Const, the sale of tickets NY lottery requires thorized [1] [“no lottery or the sale lottery tickets . . . except lot- tickets lottery teries the state and the sale operated by al- connection therewith . . . shall hereafter be authorized state”]). concerning debates lowed within this Senate state-run lotteries 9—allowing amendment to article against gambling— as exception general prohibition (see e.g. York State Senate reflect the same New understanding 14, 1965, June Constitution, New York Transcripts, Debate 4798). addition, history constitutional 4776, 4778, at In an ad- participation considered multiple reflects the Senate lottery of a ditional element the definition Constitution, 1965 New York State Senate Debate Transcripts, 14, 1965, June C is consistent with
The video authorized lottery tender consideration above, As players this definition. noted Indeed, Law although plaintiffs fit within the Penal contend VLTs machine, which, “a as a result of of a device definition slot automatically or object, operates, completely or other either insertion of coin that, depend- physical player, aid of act in such manner with the some (Penal chance, eject something of Law ing may it value” upon elements of [8]), “[glambling specifically excludes device” 225.00 the definition *19 (see [7]). lottery § 225.00 play to Penal Law and other items used a tickets
265 (cash currency) purchase or other to and electronic tickets prize compensation play a receive in the form of or chances to games. Multiple participation additional is satisfied that through system, VLTs are linked the site controllers to a central compete players against prizes purchas- one another for ing depleting pool a tickets from finite of electronic lot- instant tery predetermined tickets, awith set number of winners randomly by choosing distributed, numbers, or a series of keno symbols pool hope they, op- or from colors a finite that as posed players, to other colors, will have matched those numbers symbols satisfying or drawn, later thus the element of chance. significance It no is of constitutional that are the tickets paper. particular electronic instead of The methods conduct- ing lottery subject change language are to with time. The rigid prevent type update Constitution not so toas lottery Thus, and modernization. we conclude that the video lottery (1), a valid that, under article 9 than slot rather simply implemen- machines, are VLTs mechanical devices for the [8]).9 lottery [a] e.g. tation video Tax Law 1604 argue rights equal Plaintiffs also C violated their protection only legislatures because it allows certain local give prior approved argue They vote to for installation of VLTs. scrutiny applied that strict should be because the issue involves right Appellate denial of the to vote. However, as the Divi “[e]ven noted, sion in voter classification, a not State is prohibited recognizing from the distinctive interests of the residents of its sonable York, permit political NY2d Staten Island subdivisions” [1990] residents, (City [holding but no other New New York v State that was it rea secession]). City residents, Thus, vote on the issue scrutiny, rather than strict we use rational basis standard reviewing using When standard, review. a rational basis “a clas upheld against equal protection challenge an sification must be Attorney opinions support The General on plaintiffs relied of their argument lottery inapposite Ops that the video is not a are 84-F1). Atty 68; Ops Atty opinion Gen No. The 1981 Gen addressed found proposed games, computer poker unconstitutional video blackjack, tickets, multiple participation, did involve or electronic predetermined winning identification of tickets based on random selection. Rather, games single pitting against those or skill player involved a his her opinion Lottery proposal by machine. involved Division permit betting events, of professional sports outcome which involves winning picking predicting element of skill in team outcome game. *20 any reasonably if state of that could there conceivable facts is provide [I]ndeed, . . for the . a rational basis classification hypothesize may of the even the motivations court objective legitimate Legislature to discern conceivable promoted by Care Facility Wing, provision 94 NY2d under attack” 284, 290-291 (Port [1999] Jefferson [citations Health omitted]). quotation Here, it have internal would marks Legislature to that certain race rational for the determine been greater potential of reve were in need track communities lottery generated than others video nue that would be get prior ap require local and, result, those areas to as proval. Lottery
Reinvestment of Video Revenues cross-appeal, arguing part is that C constitutional Defendants they respects. Specifically, distri- in all assert the revenue breeding provision requiring funds bution reinvestment purses if it is and, even for the enhancement is constitutional provision severable. not, that the reinvestment is provided C for allocation of revenue from video Part prizes lottery. pay be no less than The funds used to out must 2). (L § part 383, C, Fifteen 2001, ch of video sales 90% paid— prizes percent remaining were revenue—after the Lottery for administrative was allocated to the Division of (L § part operating expenses 383, C, 2, ch 2001, codified [A]). legislation § [a] [5] The also authorized Tax Law 1612 operator fee for the track between 12% 25% vendor’s (L § remaining prizes part 2001, C, 2, 383, after ch the revenue [A]).10 portion § [a] [5] Further, a Tax codified at Law 1612 purses required to enhance fee to be reinvested the vendor’s was (L breeding appropriate 2001, ch to fund and for distribution an [B]). Specifi- § § [a] [5] part Law 1612 C, 2, codified at Tax 383, year, begin- cally, fee the first and 45% of the vendor’s for 35% purses, ning year, and no enhance the second was allocated to appropri- apportioned to an fee was than 5% the vendor’s less breeding fund. ate change to the distribution of reve- 10. This section was amended operator track as a vendor’s and 29% the nue to allot 10% the Division changed enhancing purses was fee portion The of the vendor’s dedicated
fee. to 25.9% for the first years for for next and 34.5% years, three two 26.7% percentage The of the vendor’s fee contributed year that. each after years and first five 5.2% breeding changed 4.3% the fund was also 3). (L 2, year 2003, 63, §§ part ch subsequent each W, (L very recently The statute been amended ch 2005, has 2).11 part repeal provisions, 61, CC, of the reinvestment however, not render our does consideration of this issue moot. only, legislation prospective This new it ef “shall take (L immediately” part fect CC, result, ch As a controversy validity actual remains the constitutional provision the reinvestment C of 383 of the Laws payments already for the that have been made under (c) (1). Tax Law 1612 provision
We hold that reinvestment C proceeds requires constitutional. The Constitution that the net *21 lottery exclusively applied from the sale tickets “shall be to support legislature or in aid or may of education in as the the state (NY [1]). § prescribe” proceeds” Const, art “Net means gross proceeds appropriate charges expenses. less and It Legislature necessary expenses for the to determine the incurred operation lottery remaining portion and, of the thus, what lottery proceeds. the total revenue will net Here, constitute Legislature prescribed proceeds has all net consists of money remaining payment expenses, after the of administrative including the vendor fee. misapprehend
Plaintiffs the nature of the funds. reinvested moneys separate beyond These are a deduction, other costs expenses, paid and from the amount to a the racetracks as they simply part Rather, vendor fee. constitute a of the vendor fee itself—but a whose use to has decided regulate. respect Thus, racetracks, with to fees earned heavily regulates racing industry, State, which has made policy simply determination that the tracks retain as cannot profit payment their entire after costs, fee but must reinvest percentage industry Placing back in the itself. such restric- profits tions on the use of the tracks’ earned is a common practice industry. Many racing in the statutes for that allow require revenues to the racetracks from various that a activities 11. The provisions recent amendment removes the revenue distribution that required portions enhancing of the fee purses vendor’s to be allocated to appropriate breeding and an fund. The fee new statute increases the vendor’s “thirty-two fifty percent annually, twenty-nine for the first million dollars percent annually, for twenty-six percent the next hundred million dollars (L [b]). 61, part CC, 2,§ amending § thereafter” legislation ch The Tax Law 1612 provides marketing for further “an additional vendor’s allowance . . marketing promotion . to used track for the and as- be vendor (L CC, lottery gaming operations” sociated costs of its video ch §2). portion permitted
specified reinvested those revenues be Breeding Racing, Wagering way e.g. {see Pari-Mutuel § compensation by nonprofit [1] [b] [50% of received Law 229 simulcasting wagering corporation racing from or association [ii] [1] [a] purses]; York to be distributed outside New pool resulting [percentages rac- total from on-track harness [50% [3] [a] exclusively purses]; ing to be bets used pools portion on off-track distributed of retained commission exclusively racing corporations to be used associations increasing purses]; [1] [20% of “breaks” derived from bets on races and 50% “breaks” other off-track bets harness funds]). paid to breeders’ races belongs racetracks in the
The revenue to be reinvested to the paid fee that must be to the first instance. Since the vendor requirement State, tracks is imposes cost reinvestment racetracks, not on the an administrative cost on the proceeds Lottery. are But net State Division of the proceeds remaining Division, after not to the costs racetracks. Legislature’s regulate the racetracks in this
The decision to constitutionally way policy within its reflects a determination purview. first, was entitled to determine mandatory percentage the race- *22 reinvestment of a certain breeding purses profits in tracks’ improve enhanced and funds would industry, declining racing in recent the health of the racing years,12 industry would at- second, a revitalized and that lo- VLTs were to tract more visitors to the racetracks—where be lottery participate in video would turn increased cated—who gaming, raising for education. thus additional revenue only but also as fee,
A vendor’s offered not as reimbursement lottery to offer tickets for sale an incentive for the vendor York instead to enough purses Agriculture & N.Y. State Horse the facilities quality racing tion coming which are used in therefore [breeding effectuate racetracks, to the revenues In to the New pay purses, funds are raced, races in other states. Because used”]). part (the) which regard, to attract facing here in New York legitimate public “the instrument from improve attracting defendants turn attracts declining racing tracks quality the Breeding fewer to contend that in recent revenues, quality of the horses that are horses, bet, resulting through interest more (see players “general improvement of the Dev. Saratoga Harness high-quality spectators, the which have and Fund, still. top purpose” been unable to offer horses have been Similarly, breeding funds less fewer Legislature horses NY2d years, money spent people have been Racing applying 119, lead to better- since has bred, and sport and the New Assn. chosen drawn [1968] a large from por premises, necessary the vendor’s ais administrative cost of operating lottery, if no because there is one to sell tickets (or operate VLTs), lottery, ultimately there will no and no be money part expressly Indeed, earned for C education. contem- plated that vendor’s fee to be established would “ensure the lottery support ensuring maximum for education while also implementation [Tax (authorizing effective operation Law 1617-a lottery)] through provision video reason- compensation able reimbursements to vendor for tracks (L participation pilot program” part C, ch 2001, 383, 2).§ policy by Legislature The determination greatest enacted allocation funds would in the result benefit properly to education was its to make. generally par-
It is the courts to determine whether by ticular vendor’s fee set is reasonable. While perhaps imagine canwe a case where a “fee” was so excessive nothing flagrant as to constitute more than end run around requirement proceeds applied that the net exclusively begin to education, the fee at issue here does not approach Every lottery agent that standard. ticket in the state (see 2805.10), receives a fee of of total 6% ticket sales NYCRR higher paid part far Indeed, than the fee to the racetracks under C. originally enacted, the vendor fee was to be fixed Lottery the Division of the at between 1.2% After 2.5%.13 conducting study comparing the rates with fixed those highest permissible states, other the Division set the rate at the single signed At level, however, level—2.5%. not a racetrack up participate lottery pilot program.14 in the video Legislature therefore amended the statute to allow for a fixed (a reinvested).15 percentage portion of 2.9% of which was to be significantly Still, New York’s vendor fee remains lower than 13. Part C set the vendor’s fee at between 12% 25% the total reve- wagered 383, C, nue less the paid prizes amount L ch prize payout Since the is to be no less than total L ch 90% of sales C, 2), gross the fee amounts between 1.2% and 2.5% sales. *23 capital 14. The initial operating investment and continued of offer- costs ing lottery gaming significant. provide space video can be The vendor must for terminals, them, staff, provide install and parking maintain increased Racetrack, security for VLT Finger example, area. for Lakes construction, anticipated variety of employees its costs of new and a other improvements nearly million, by to be none of $11 which would be incurred the State. 15. The 2003 amendment increased fee the vendor’s to 29% of total reve- wagered paid prizes—or gross nue less the amount L 2.9% of sales 63, W, § 3). 2003, ch part The 2005 amendment has increased the vendor’s fee offering Thus, we dis- at racetracks.
that of other states VLTs by Appellate agree fee set that the vendor’s with the Division part chapter “inflated,” C of was and find entirety. in Laws of 2001 constitutional its Mega Millions constitutionality Finally, plaintiffs challenge D of legislation, of the Laws of 2001. Pursuant Lottery agree- authorizing an of the to “enter into the Division government-authorized group of or more other one ment with jurisdictions providing operation aof for the and administration (L multi-jurisdiction, lottery” joint, ch 2001, and out-of-state 1617). § § part D, codified Tax Law York entered 3, Mega participate agreement in with nine other states to into an prohibits lot- above, As Constitution Millions.16 noted “operated exception general, for lotteries teries in by but makes [1]). (NY Const, I, the state” art Mega agreement specifically provides that the The Millions lottery generated by in within each state remains revenue jurisdiction’s according to rele- that state distribution lottery agreed operate requirements. vant The states sharing operating expen- jointly—including start-up costs money, responsibility paying prize out each As for the ses. proportionate percentage for a of its sales state is liable agreement provides that the further total amount of sales. conflict be- of the state will control the event laws Any Mega agreement. claims Millions state law and the tween litigation involving tickets sold in New must or held account- York law. No state will be determined under New agents negligent or em- for the actions omissions able permitted lottery. ployees Each state is also of another state upon Mega agreement six Millions either withdraw from the immediately by operation if withdrawal is notice or months’ of law. arguments position. support of their make two
Plaintiffs “operated they argue that the multistate First, (NY required Const, art the Constitution the state” as [1]). proceeds “applied they are not Next, assert that the net support exclusively this state” to or aid or education [1]). (NY arguments in turn. I, 9 address these Const, art We sales, gross varying as the revenue increases 2.6% to between and 3.2% CC, § L ch Massachusetts, Illinois, Maryland, Mich- Georgia, 16. The other states are Washington. Jersey, Ohio and igan, Virginia, New *24 271 jurisdictions Although involved, several are New York retains Mega so sufficient control over the sale of Millions tickets According operates lottery it the within the state. to both the Mega agreement Law, Tax terms the Millions and the New authority specify the and in manner retains where what (see [7]). § lottery [a] may [6], the Tax tickets be sold Law 1604 Lottery power The the Division also has to license ticket agents compensation and determine the manner and amount of (see [b]). agents § Mega [a] due to such Tax [9]; Law 1604 The procedures comply any Millions and, with New York law if they comply, longer time no the State is free to withdraw from agreement. administrative
That other states share in certain costs change and functions does not our conclusion. The Division of Lottery regularly with contracts outside vendors and other equipment entities for various and services to in the assist operation lottery. Although operate of the state different states aspects lottery,17 change different of multistate that does not operation Mega New York’s Millions within the state. While may every aspect the State not have over exclusive control Mega lottery, operates lottery Millions it the multistate (see required § within York as I, Constitution art Cl])-18 proceeds Mega
Next, we address whether the net
from
Mil-
“applied exclusively
support
lions are
to or in aid or
of educa-
(NY
[1]).
proceeds
tion in
Const,
this state”
art
Net
are
reasonably
remaining
understood as the amount of revenue
af-
prize money
necessary
ter the
distribution
administra-
example,
Lottery
17. For
Virginia
grand prize
maintains the
funds and
Georgia Lottery Corporation
drawing.
conducts the actual
constitutionality
18. Other
have
participa
courts
addressed the
of a state’s
(see
tion in a
Taft,
multistate
State ex rel. Ohio Roundtable v
2003 WL
21470307,
App
[2003], appeal
2003 Ohio
LEXIS 3042
not allowed 100 Ohio St
1484,
[2003];
Commn.,
3d
Lottery
Accordingly, Appellate Division should be the order of the by declaring part of defendants, C modified, costs to with chapter and, so modi- of 2001 constitutional 383 the Laws fied, affirmed. (dissenting part). 9 I, Article New J. G.B. Smith, enacting Legislature prohibits the from
York State Constitution authorizing gambling legislation and directs commercialized gambling. light preventing Legislature pass In such laws the Indian in this case is whether main issue article Gaming Regulatory (IGRA) (Pub 25 100-497, L codified at
Act 1166-1168) §§ §§ authorizes the 2701-2721 and 18 USC USC e.g., part chapter legislation, Legislature B of 383 enact empowering negotiate the Laws of Governor to compacts enter into and with Indian tribes for the establishment operation commercialized casinos New York ordinarily impermissible. State where such casinos would IGRA, law, on a Based review relevant does not authorize Legislature legislation. the New York State enact such Ac- cordingly, Legislature absolutely authority had no to enact B of the Laws 2001. Because the authority legisla- does not have the enact purported legislation tion, that has no effect. From it fol- County pursuant Saratoga Governor, lows that who (100 Chamber Commerce v NY2d [2003], Pataki cert [2003]) legislative approval denied US must have valid in order to bind State to tribal-state compact, power compact does not have the to even enter into negotiations with Indian tribes for the establishment “for- *26 profit” gaming in Moreover, casino New York State. IGRA does require and not cannot or authorize the Governor to enter into negotiations. such majority’s part
The conclusion, constitutional, B is fails adequately plain language to consider the of I, 9, article New statutory (e.g., Municipal York’s scheme the General and Law Law) prohibits gambling, Penal which commercialized and New strong, long-standing public policy against gambling York’s making part Rights I, reflected a article 9 of Bill of importantly, the New York State Constitution. Most majority’s bypasses conclusion the citizens of New York State expressed opposition gambling who have their commercial to way say, and who have other, not had their one or the via the process, amendment as to whether the should be given authority legislation allowing type to enact for the contemplated gambling part commercialized, I, casino under B. (1) part chapter therefore, dissent and would hold that: B of (2) any compact(s), pursuant is unconstitutional; entered into to (3) chapter B 383, unenforceable; are void and casinos opened pursuant operating compact and now to such a should (4) illegal;1 be declared and Governor other New York State officials should be declared unauthorized to enter into In B August pursuant chapter compact a was Indians, purportedly entered into New York State and the Nation of Seneca resulting Niagara in the of the Seneca Alle- establishment Casino Seneca gany subject legislation Casino. Because authorized the Governor negotiate State, compact, resulting and enter a New into behalf of York gaming prohibited establishment casinos that conduct under New York (e.g., any part B activities in furtherance should, immediately) compact negotiations and until cease unless amended. York State Constitution is the New Facts Background County origins Saratoga case at bar has its Chamber (supra). In then Mario v Pataki Governor Commerce legislative auspices of but without au Cuomo, under the IGRA compact
thorization, gis with the St. Re entered into tribal-state allowing III to establish class Mohawk Tribe Tribe casino at Akwesasne reservation commercialized its initially
upstate does York. This Court held that “IGRA governing preempt are which state actors state law (Sara negotiate agree gaming compacts” competent (1) 822). Additionally, toga County, 100 this Court NY2d negotiation compacts that the of tribal-state involves concluded affecting residents, the health and welfare state issues implicating Legislature; power
policy choices within the (2) by acting legislative Governor, without autho that the ruled (3) separation-of-powers rization, doctrine; had violated Saratoga compact void and unenforceable. declared County specifically following open question: would such left assuming compact, that the Governor had authorization into article 9 of the New State Constitution it, enter violate (s 824-825). Saratoga County, However, 100 NY2d at ee question that must be answered is whether the first *27 legislative power Legislature, light of limitations on set the Constitution, has forth in 9 of the New York State article 383) (e.g., chapter authority pass part B of to a law the compacts negotiate empowering into to and enter the Governor gaming prohibited under the State for the establishment of question must be above, indicated Constitution.3 As negative. answered in the
law, a valid 517 US spect to lawful compact, the class 44 the unlawful compact [1996]). Thus, 25 USC 2710 must be deemed unenforceable. the casinos would III casino-style gaming activity. [d] [1] [C]; have to cease Seminole Tribe conducted at these Moreover, operations in the absence of Fla. v facilities Florida, with re- particular no state actor who 2. This noted that IGRA “identifies Court question up left state law Pueblo compacts; that to negotiate the shall 1997], 1546, 522 US Kelly, [10th Cir cert denied Ana 104 F3d Santa [1997])” (id.). question. County reached that Saratoga court never 3. Chapter
BPart 383 of the Laws Legislature emergency In an October the State met in session to consider those devastated the measures assist September promote disaster, Trade eco- 2001 World Center development generate nomic the state and revenue. Late session, each branch of the considered an 81-page containing including parts, bill omnibus, distinct (2001 parts relating gambling Senate-Assembly three NY Bill 9459).4 Assembly During S A the Senate and debates on legislators including, bills, items, these discussed number (1) process to, but not limited which the bills came before (each necessity accompanied by message them bill was and (2) required debate), an immediate vote was after the relatively they important time short had to consider the wide-sweeping proposed gambling provisions, bills, the es- pecially part generating B, which were touted as a means of rev- generally departure enue and criticized both aas drastic from policy against specifically New York’s regarding commercial (3) gambling,5 the evils associated with such the fact many legislators regard- that ing rank file were left the dark decision-making process provisions (e.g., on these some legislators hearings public commented that there no were measures), proposed gambling conference committees for the (4) legislators they the fact that number indicated that pass although they would vote to the bills because, did not nec- essarily agree proposed gambling they fully with measures, supported including proposed other measures, those which provided electricity for low cost as a businesses dislocated expan- result of Center, destruction of the World Trade system, Development sion of the Child Health Plus Urban Corporation guarantees, liberty loan and the creation of zones for Trade Center Area. World Disaster Legislature passed
On 25, 2001, October 24 and these bills, which became 383 of 2001. case the Laws of This proposed legislation, Under B the Governor would receive authority compacts up enter into tribal-state for the establishment of C, Lottery six new casinos Indian lands. Under Division (Division) permitted operation would be to license the video *28 pari-mutuel D, terminals at Under the Division be al- racetracks. would participate any joint, multijurisdiction, lottery game lowed to in out-of-state adopted statutory existing requirements in accordance with the for planning reporting. and example, 5. For as a on the Senator Duane referred to “tax poor.” D B, of C and parts a to the challenge constitutionality involves I However, of focus on opinion, of 383. for this chapter purposes (1) provides B of of of 2001 which: the Laws with the compact the execute a tribal-state “may Governor a [IGRA] of Indians consistent with Seneca Nation pursuant understanding governor between [MOU] memorandum on of Indians executed president and the Seneca Nation (2) (Executive [20, [a]);6 § 12 permits 2001]” June Law “authorizing compacts to execute tribal-state gaming Governor in the of Sullivan to three class III facilities counties up (Executive (3) that, [b]);7 § 12 and Ulster” Law and provides of a slot machine shall not be unlawful where “[possession duly to a gaming compact, such and use is possession pursuant Nation, and an Indian tribe or under governor executed by (Penal [b]). . . Law 225.30 [IGRA] .” 18, 2002, of Indians entered August On the Seneca Nation date, To have with York State.8 two casinos into New compact been built On or about December compact. this pursuant in Falls, Casino New York Niagara Niagara Seneca Brief for Park Place Entertainment opened business 24; at Seneca Gaming Corporation Company Corporation, Overview, <http://www.senecagamingcorporation.com/ cached at <http://www.courts, companyoverview.html>, state.ny.us/reporter/webdocs/SenecaGamingCorpCoOver- view.htm>). 1, 2004, On or the Seneca May Allegany about Salamanca, in for business Seneca Casino opened MOU, up provided III” were for. One 6. Under the three “Class casinos County City Niagara Niagara in the Falls. One was to he located was City Finally, County provided in Erie in the the MOU located Buffalo. territory, III gaming on current reservation should “the establishment Class facility, point pursue the future decide with the Nation at some (Rec- at such later date” precise location to be determined the Nation 156-157). Appeal, ord on Here, determined and the casino loca- the Indian tribes have been specified. were not tions states, Compact pertinent part: 8. The Tribal-State Compact “This made entered into between Seneca Na- and (‘Nation’) Indians, sovereign Indian nation
tion of (‘State’) [IGRA] pursuant provisions State New York THEREFORE, STATE, and the consistent the NATION “NOY[ Understanding the State with Memorandum of between President of the Seneca Indians exe- Governor Nation undertak- cuted June 20th consideration forth, hereby into ings agreements set enter hereinafter Compact.” Gaming III Class *29 Overview). Gaming Corporation Company Both are casinos cur- rently operating. History
Procedural and Parties January declaratory judgment 2002, On the instant ac- Supreme Albany County.9 Court, tions were filed in in Plaintiffs (1) allege parts chapter B, both D actions that: C and basically provides only violate article permissible which that state-operated gambling forms of in are New York betting pari-mutuel education, lotteries to raise funds for on games religious, operated by horse races, and certain of chance (2) organizations; nonprofit chapter charitable or and 383 was enacted in III, violation of article York New State parts Constitution. seek a B, Plaintiffs declaration that C and D chapter illegal, the Laws of 2001 are unconstitutional, permanent injunction enjoining and null void, and and state implementing legislation. officials and others from After commenced, the actions were Park Place Entertainment (now Inc.) (Park Corporation known as Entertainment, Caesars Place) sought to intervene as a defendant in Action 1. Park No. largest gam Place, which itself described as “one of the world’s ing companies,” argued that it has a substantial interest ensuring upheld B is as constitutional, and that it adversely by any judgment would be invalidating affected and hound Regarding B of 383.10 its substantial April interest, Park Place asserted that it entered into (Action 1) 9. The Dalton action No. was commenced on behalf a broad taxpayer-voters (Joseph Dalton, coalition of Motley, citizen Reverend Duane Karr, Bratton, Mr. Lee G. Stanford Reverend John Ekman and Chaskiel Ro- (Senator zenburg), legislators Assembly state and Frank Padavan Member Parment) (New organizations William Yorkers Constitutional Freedoms, Ltd., Against Gambling Presbyterian Coalition Casino Church) England and New Congregational opposed spread (Action 2) throughout brought York The New State. Karr action No. was Karr, taxpayer-voter spread behalf of Lee a citizen opposed Mrs. gambling throughout York New State. George Pataki, defendants both actions were: Governor State York, Board, Roth, Racing Wagering New the New York J. State Arthur York, Commissioner Taxation and Finance of the State of New of the Division Lottery, McCall, Comptroller New York H. Carl New State Association, Racing Finger Association, Racing Racing Corpora- Lakes Yonkers tion, Raceway, Raceway Management, Mid-State Inc. and Monticello Incorporated. Note, 21, 2002, by stipulation of discontinuance dated November both ac- prejudice only tions were as to defendant H. McCall. discontinued with Carl during argument, 10. When asked about its interest in this matter oral IGRA, may management Park Place tribes enter into noted under Regis agreement Tribe under which an with the St. Mohawk management development exclusive Park Place secured rights Further, York State. for the Tribe’s future casinos New op agreement for an Park Place asserted that it entered into (i.e., acquire property Hotel and Kutsher’s Resort tion Club) Country County, York in order to build in Sullivan 11 Finally, to have location. Park Place claims casino at that *30 “expended preparation in for the construc millions of dollars manage operation project expects to on of this that it tion By [Tribe].”12 stipulation of and order dated Febru behalf attorneys parties ary 1 and the of 15, 2002, the to Action No. agreed may in this action Park Place that Park Place intervene answering responding pleading or to the and shall serve a complaint. April Park Place 2002, In defendants and each state pursuant brought preanswer to CPLR 3211. motions dismiss complaint in en- moved to its The state defendants dismiss tirety of Park the first three causes Place moved to dismiss By relating part chapter B Laws 2001. of 383 of the of action Supreme the mo- 30, 2002, Court dismissed order dated October entirety premature. Ac- Further, date, in on that tions their parties permit- Nos. 1 and 2 were consolidated and the were tion summary judgment. ted to for cross-move judgment granted summary July Supreme 2003, On Court constitutionality upheld favor. The court in defendants’ complaints parts chapter B, and D and dismissed the C entirety. po- State Constitution in their court held that the Place, managing experienced companies, like to assist in contracts Park with purpose that a gaming operations. Indian Park Place also noted stated tribe, development that the monies promote is to the economic IGRA generated end, it is gaming are used towards that and that from activities management experienced in the tribes’ interest to affiliate themselves with companies, a in “the filed Land- Place that March Mohawks 11. Park asserted Depart- of the U.S. application with the Bureau Indian Affairs Into-Trust option to of the Kutsher’s land under of the Interior to have 66 acres ment gaming to be used Park taken into trust for Mohawks Place (Record record, According applica- Appeal, purposes” on pending. tion is still developers/operators/ largest telling It that one of the casino Place, Companies, in like Park who have managers this suit. has intervened stand to developing Indian casinos New State process are in the they down are money chapter if B of 383 is struck quite bit of lose unable to: (1) casinos; development of the initial investment in the recoup their fees) (2) manag- management operating reap (e.g., the benefits and/or open ing the casinos. no ses bar to Indian casino in New York because “New adopted public policy permits Yorkers have that considerable gambling, although regulated.” holding, adopted In so court holding Pequot the Second Circuit’s Mashantucket Tribe v (913 [2d 1990] [ruling Conn. F2d 1024 Cir states negotiate that allow charities to conduct III class must same]) good wishing faith awith tribe to do the and the anal ysis Saratoga Judge County.13 from Read’s dissent July Appellate Department 7, 2004,
On Division, Third Supreme modified the Court’s order. The Court affirmed the Supreme ruling constitutionality regarding parts Court’s B Dand 2001; however, 383 of the Laws of it declared Regarding part B, C was unconstitutional. the Court that, determined
“pursuant may IGRA, state enter into tribal- compacts permitting particular state casino-type gaming III, class
activities tribal lands if the permits any person particular state gaming to conduct those any purpose, including
activities for a chari- *31 purpose. compact permits table a That a certain game to in a be conducted manner that is otherwise inconsistent with law state will not render invalid it game completely prohibited. if the is not Because permits New York the at activities issue here subject purposes, heavy regulation, for charitable to properly subject the the of a tribal-state (Dalton compact” 2004]). Dept [3d Pataki, 11 AD3d 67 Moreover, Court the held that the Governor would able to negotiate compacts tribal-state with Indian to conduct tribes casino-style gaming on lands that not were “Indian lands” at time if the of enactment the with IGRA’s Governor concurs the Secretary gambling of the Interior’s determination that casino would be in the best of Indian interest tribe surrounding detrimental to communities. appeal cross-appeal, respectively, Plaintiffs and defendants (1). (b)
pursuant to CPLR 5601
Discussion
By holding
chapter
B
that
of
of 2001 is
383
Laws
majority
constitutional,
this Court and the lower courts
that,
Judge Read,
if
According
“IGRA
a state allows
mandates
III gaming by any person,
may
games
tribe
same
class
a
seek
conduct
842).
(Saratoga County,
on its lands”
have Legislature pass ordinarily not, i.e., a law a it could State empowering law agreement enter an
the Governor comport gambling activity that does not with establishment activity gambling at issue Constitution. Since State’s put approved citizens has before and here not been general prohibition against exception as gambling I, State Consti- set forth article the New York authorizing pass legislation tution, the cannot agreements for the establishment Governor to enter into commercial gambling B Therefore, facilities. as be set aside unconstitutional.14
must Gaming Regulatory Background Purpose Act of the Indian pursuant Congress passed to its on IGRA October (US power regulate Indian commerce “with the Tribes” [3]) response art and in to the United States Const. Supreme Band Mis v Cabazon Court’s decision California (480 [1987]). Cabazon, was In which sion Indians US year Supreme enacted, the decided about a IGRA was before prohibits regulates rather held a which than Court state gambling permit Indian tribes to conduct must (see, Cabazon, at The Court further their lands 480 US conducting would from held that Indian tribes gambling be forbidden gambling altogether particular prohibits if state (id.). regulatory/prohibitory distinction, To deal with this test is whether court stated: “The shorthand Cabazon (Cabazon, policy.” public conduct at violates State’s issue 209.) provide primary purpose IGRA is “to US gaming by statutory operation for the tribes basis development, promoting economic self- means of tribal (25 sufficiency, strong governments” USC 2702 tribal *32 [l])-15 gaming into on Indian lands three classes.16 divides
IGRA games prizes games, for minimal and I defined as social Class is, § Law That Law 12 and the amendments Penal 14. Executive (a) (1) (b) § must be set aside as unconstitutional. 225.30 “corrupting attempts regulate gaming so as avoid 15. IGRA also primary the Indian tribes are the benefi- and seeks ensure that influences” (see [2]). § gaming USC of the 25 2702 ciaries “The ‘Indian lands’ means— term “(A) reservation; any all lands within the limits of Indian “(B) any by either held in trust the United lands title to which is by or held benefit of Indian tribe or individual States for the
281 games, traditional Indian or ceremonial are within the exclusive jurisdiction subject of the Indian tribes and shall not be to the [1]). provisions § § [a] of IGRA 25 USC [6]; Class games, bingo, pull jars, tip punch II such as lotto, tabs, boards games, banking games (e.g., and card but not card chemin de blackjack), jurisdiction fer, baccarat and fall within tribal but subject provisions are § to the [7]; IGRA 25 USC 2703 [2]). [a] gaming, Class III which is defined as “all forms (25 gaming gaming” that are not I class or II class USC [8]) banking racing, cards, includes horse slot machines and the commercialized, casino at issue subject here, is to the terms and conditions of tribal-state compacts.
Requirements Gaming for Class III provides,
IGRA gaming “Class III activities shall be lawful on Indian only lands if such activities are—
“(A) by authorized an ordinance or resolution that— “(i) adopted by governing body of the Indian jurisdiction having tribe over lands, such “(ii) (b) requirements meets the of subsection this section, and
“(iii) approved by the Chairman,
“(B) permits gaming located in a State that any purpose by any person, organization, entity, any Indian subject tribe or individual to restriction the United against States alienation and over which an Indian tribe exercises (25 governmental [4]). power” §USC 2703 Generally, gaming acquired on lands after Secretary October of the Interior and held “in trust for tribe,” the benefit of an except Indian for “lands . . . contiguous located within or of [an Indian] boundaries (25 reservation,” [1]). permitted is not However, [a] USC 2719 IGRA authorizes on acquired Indian lands after October 1988 if the Sec- retary Interior,
tribes, ing community, acquired lands would be in the best interest of the Indian tribe and its and local determination” “after consultation with gaming activity members, determines officials, *33 (25 but and would not be detrimental USC 2719 [b] is to he including only that a § the Indian tribe and if the conducted concurs in the officials Governor [1] establishment [A]). other the State in which appropriate to the surround- nearby Secretary’s newly 282
“(C) in conformance with a Tribal-State conducted compact into the Indian tribe and the entered (25 (3) paragraph under that is effect” USC [l]).17 [d] determining gaming III allowable on In whether class will be compacting requirement pri- lands, the tribal-state discussing mary importance However, this before under IGRA. legislative necessary requirement, it is to examine IGRA’s his- history tory regarding compacts makes clear that because this (1) Congress: engaged in a state and Indian tribe considers (2) compact equal sovereigns; negotiations considers be ensuring public policy law and are interest, that its state’s (3) compacting process; important to, does adhered require or laws in its own constitution state abandon Report, regulate gaming. III or Senate order to have class 555) (US accompanied that eventu- Senate Bill S which ally bill legislative history, IGRA and sets forth IGRA’s became part: provides, pertinent [T]he [Select compacts. . . . “Class III—tribal-State (Committee)] on Indian Affairs con-
Committee compacts tribes and cluded that the use of between mechanism to states is the best assure sovereign are met with re- interests both entities regulation complex gaming spect enter- racing, pari-mutuel dog prises as horse and such jai gaming, alai and so forth. The Committee casino strong notes the concerns states that state laws regulations relating sophisticated forms of gaming respected where, on Indian lands class III be preempt the field Rep No. with Indian lands would through tribal-state system tribes to without over class III tive interests of the state and into account. any person, organization, compacts, the federal permits regard to class III According a valid jointly regulate 100-446, gaming compacts on Indian Moreover, tribal-state specific gaming, set forth in the conducted 100th to its only be compacts, states maintain “some lands” government gaming, Congress legislative governance Cong, 2d there regulation compact permissible on Indian entity (Seminole Tribe, 517 US at gaming. tribe can Sess, history, cedes (i.e., of such This gaming no class III if states and Indian lands Statement two regulatory oversight contemplated USC system IGRA “is intended to USC 2710 gaming equal sovereigns) activities on compact, permits exists so (id.). Policy, measure of [d] [1] that such [d] Under states and Indian tribes Indian lands” on Indian lands that the [1] authority [C]) will be 6). However, [B]). employed purpose gaming on authority in a expressly respec- system Thus, taken state (S *34 exceptions, regulations with few such laws and do apply. not now The Committee balanced these against strong opposition concerns tribal to imposition jurisdiction of State over activities on Indian lands. The Committee concluded that compact process setting is a viable mechanism (S equal sovereigns” various matters between two Rep Cong, Explanation 100-446, No. 100th Sess, 2d Major Provisions, at Report provides The Senate further that: governments significant
“both State and tribal have governmental interests in the conduct of class III gaming. encouraged States and tribes are to conduct negotiations within the context the mutual benefits that can to and tribe and States. This is a flow from strong presumption provide and serious that must negotiations. governmen- A tribe’s framework for raising provide tal interests include revenues governmental services for the benefit the tribal community promoting and reservation residents, public safety as well as lands, law and order on tribal realizing objectives self-sufficiency of economic regulating and Indian self-determination, and activi- persons jurisdictional ties of within its borders. A governmental respect State’s interests with to class gaming interplay III on Indian lands include the gaming public policy, safety, such with the State’s impacts interests, law and other as well as on the regulatory system, including State’s its economic raising {id. interest revenue for its citizens” added]). [emphasis
Regarding Report provides intent, Committee’s the Senate that: compact
“It is the Committee’s intent requirement justifica- for class III not be used as a excluding tion a State for Indian from tribes such gaming protection or for the of other State-licensed gaming enterprises competition from free market {id.). with Indian tribes” required forgo any governmental
Further, “States are not rights engage regulate gaming except in or III class whatever they may voluntarily {id. compact” cede to a tribe under added]). [emphasis IGRA respect compact requirement,
With to the tribal-state III tribe, gam- to conduct class seeking provides initiate asking land, compacting process by on its ing may activity is to take proposed place the state which for the a tribal-state negotiations entering engage purpose compact 25 USC 2710 [d] [3] [A]). When tribe requests into both the tribe compact negotiations, a state enter (id.).18 However, IGRA good the state shall faith negotiate enter a compact. does not that a state into require accept Moreover, III shall not on states where imposed class (5) provides: is forbidden. USC *35 have the to right regulate
“Indian tribes exclusive that, ju- provides “The have IGRA United States district courts shall by arising over . cause of initiated Indian tribe risdiction . . action negotiations with Indian tribe for from the failure of a State to enter into the (d) § purpose entering compact [25 into a under USC 2710 the Tribal-State (25 (3) (A)] § negotiations good [d] [7] to faith” 2710 or conduct such in USC [i]). Note, Supreme has held that the Indian Com- [A] the United States Court Congress grant power abrogate Clause the to the states’ merce does not (d) (7), § sovereign immunity through 2710 “and therefore from suit 25 USC (7) (d) jurisdiction § that not consent to grant 2710 cannot over a State does (Seminole 47). Tribe, 517 US at be sued” request to enter USC compact Further, proof § 2710 was entered shifts compact negotiations where an Indian compact negotiations [d] to the state [7] [B] into, [i], [ii]). and the tribe to prove more than introduces state did not did not it respond 180 evidence that it negotiated respond days before, in good to good the Indian tribe’s faith, requested no tribal-state faith the burden (see 25 a state pointed for with a State compact submission However, compact a . . . State “[I]f. days], treated as Tribal-State a , [IGRA compact. the and an Indian tribe fail consents to the state and Indian tribe. within a . . the court and other Indian court a court shall order 60-day proposed [the] mediator shall select . . . the tribe and the finds that the proposed compact applicable period” proposed compact [within the State compact compact” to (25 conclude a Tribal-State State has federal USC 2710 (25 shall each submit to a [ ] USC (25 § State], law]” and submit Indian failed to USC 2710 represents § [d] one [tjribe [7] proposed [d] negotiate days which best [B] their last best [7] [B] compact. to conclude such [iii]). Further, [d] [7] compact mediator the selected [iv], mediator’s good faith comports [B] . . [v].) [after [vi]). shall offer ap- “If “If a days], shall consent . the mediator [within “If the State does not . . Secretary prescribe, in notify Secretary [of Interior] shall tribe, procedures . . . consultation with the , . . . proposed the mediator compact “consistent with the selected law], [IGRA], [state and the and . . . relevant gaming may on the Indian lands over “under which class III be conducted (25 [vii]; jurisdiction” see 25 [d] [7] [B] USC 2710 the Indian tribe has which CFR gaming activity ity gaming on Indian if lands activ- specifically prohibited by
is not Federal law and not, is conducted within a State which does as public policy, prohibit matter such criminal law and added). gaming activity” (emphasis foregoing, long proposed gam- Based on the as the III class ing activity prohibited by pub- is not criminal state’s law and policy, compact- lic an Indian can tribe initiate the tribal-state ing process obligated negotiate good under which a state is (d) (7). subject faith, However, 25 USC 2710 in the instant gaming contemplated case, the commercialized casino prohibited public policy.19 under York New law and proposed gaming prohibited
Because the casino under the York New State Constitution and Penal Law, and such strong public policy against conflicts with New York State’s gambling, Legislature commercialized did not have the power legislation authorizing to enact the instant the Governor negotiate compacts and enter into with Indian tribes for the “for-profit” establishment of casino York New State. require Moreover, IGRA does not and cannot force or pass authorizing a law the Governor to execute agreements activity for the establishment of that is violative of public policy. State’s laws and above, As indicated legislative approval, without valid negotiate can Governor neither *36 by entering compact. nor bind the State into a Against Gambling New York’s Prohibition Commercialized prohibits gambling, including New York commercialized for-profit, gaming contemplated prohibition casino herein. This Rights” is set forth in the “Bill of of the State Consti- 9).§ adopted Const, tution art I, I, NY Article 9 was “protect [ ] family meager . . . the man of resources from his imprudence own Corp. at the tables” International Hotels [Puerto Rico] citing Golden, [1964], NY2d Car- Reports Proceedings ter and Stone, of and Debates of the 1821]). (1) [Hosford Convention I, of at 567 Article pertinent part: the New York State reads, Constitution “except provided, lottery as hereinafter no or the lottery pool-selling, bookmaking, tickets, sale any or gambling, except operated other kind lotteries by the state and the sale of tickets con- gaming activity 19. Because the prohibited, instant the State under obligation negotiate good no faith. pre- may authorized and as be nection therewith proceeds by legislature, net of which scribed support exclusively applied or to or in aid shall be may pre- legislature in this state as education betting except pari-mutuel on horse scribe, and by legislature may prescribed races be a reasonable reve- state shall derive from which the government, support of shall nue for the hereafter state; and the allowed within he authorized or legislature prevent pass appropriate laws to shall of- provisions against this section.” fenses (Emphasis supplied.) (2) provides: Article may by village
“any city, the state or within town majority qualified approving of the vote voting proposi- municipality aon electors special general or elec- at a tion therefor submitted legislative supervi- subject to state authorize, tion one or both of the control, conduct of sion and commonly games following categories of of chance (a) prizes bingo are in which lotto, or known as: designated numbers or awarded on the basis sym- conforming symbols or to numbers on a card (b) prizes games random; in which bols selected winning number or of a are awarded on basis symbols symbol colors, or or numbers, color or previously among those chance from determined played, result determined as the or whether selected drawing spinning or otherwise wheel, a of a by chance.” (2) provides: further
Subdivision subject games be authorized, such shall “If may among following others which restrictions, (1) only legislature: prescribed fide bona organizations non-profit religious, charitable firefighter non- and similar veterans, volunteer *37 permitted profit organizations to conduct shall be (2) any game proceeds games; of entire net such purposes exclusively to the lawful devoted shall be (3) except person organizations; no bona of such partici- any organization shall fide member of pate such game; operation management of or such in the (4) any person receive remuneration no shall and participating management operation for any in the or of game.” (2): Additionally, respect with to subdivision provided by single prize law, “Unless otherwise no any fifty dollars, shall exceed two hundred nor shall prizes aggregate of more series one occasion than legislature pass ap- one thousand dollars. The shall propriate purposes laws to effectuate the of this games [and] rigidly subdivision ensure that such are regulated prevent gambling.” commercialized provision, Legislature Consistent with this has outlawed 225).20 gambling commercialized Penal Law art give § In order to effect to article 9 of the New York State Constitution, the enacted article 9-A of the General Municipal Licensing Law, New York’s of “Games Chance Law” § Municipal seq.). purpose General Law 185 et The stated of legal prohibition article 9-A is consistent with New York’s strong public policy against gambling. commercialized General Municipal purpose Law which sets forth the of article provides, pertinent part: 9-A, legislature hereby raising
“The declares that the of promotion funds for the charitable, of fide bona religious patri- educational, scientific, health, undertakings, otic causes where beneficia- public are undetermined, ries in the interest. It hereby prior that, finds as conducted to the enact- games article, ment of this of chance were the subject exploitation by professional gamblers, of promoters, hereby and commercial interests. It is policy legislature declared to be the that all phases supervision, licensing regulation games games chance and the conduct example, provides, person guilty 20. For Penal Law 225.05 “A promoting gambling degree knowingly in the second when he advances or profits gambling activity.” Moreover, pursuant from unlawful to Penal Law (4), activity’ when, person gambling acting 225.00 “A other than ‘advances engages materially any player, as a he in conduct aids form of which activity. conduct directed Such conduct includes but is not limited to toward contest, scheme, particular game, the creation or device establishment of activity involved, para- acquisition premises, or toward the or maintenance of therefor, phernalia, equipment apparatus the solicitation or induce- toward therein, persons participate play- ment of the actual conduct of the toward ing thereof, any recording phases arrangement toward the of its financial or phases, phase operation.” or toward other of its *38 closely and that the laws chance, be controlled should strictly regulations pertaining be thereto should and construed the regulated rigidly the conduct and that enforced; of game should be so and all attendant activities adequate instituted as to and controls so discourage its all commercialization of including premises the rental commercial forms, of games chance, maximum and to ensure a of for availability proceeds games chance the net of of of worthy application exclusively causes and for onlyjustifica- undertakings specified herein; that the support such is to and tion this article foster for undertakings, worthy and causes and article one the state mandate constitution, section nine of of of amended, be carried out should gam- rigid regulations prevent commercialized prevent participation by bling, criminal and other prevent elements and the diversion undesirable (Gener- purposes herein authorized” funds from the added]). [emphasis Municipal al Law 185 body charged Similarly, administra- with the the activities of the Licensing Law, the New York’s of Chance tion of New Games (Board), Racing Wagering consistent Board are and strong public policy legal prohibition and York’s with New Municipal gambling. against Law General commercialized (1) provides that the Board shall: 188-a games “Supervise the administration [ ] licensing adopt, and amend law and chance governing repeal regulations the issuance rules and thereunder and the and licenses amendment of conducting games licenses, which under such regulations and shall have rules effect force municipalities binding upon all law and shall issuing upon board, to licenses, licensees quali- issued to licenses shall be the end games only, shall be and that said licensees fied purposes fairly properly conducted licensing games the said chance in the manner prevent games prescribed chance law and to being thereby to be conducted authorized from purposes purposes or other commercial conducted for participated in authorized, than those therein and the undesirable elements criminal or other being games from diverted from the funds derived purposes provide uniformity authorized, and to throughout in the administration of said law prescribe application state, the board shall forms of licenses, licensees, licenses, amendment of reports games of the conduct of and other matters *39 (Gener- incident to the administration of such law” al Municipal Law 188-a § [1] [emphasis added]). Municipal (4), § pertain- Likewise, ing Law, General 9-A, article types organizations games authorized to conduct strong public chance in State, New York reflects New York’s policy against gambling. Municipal commercialized General Law (4) § provides that:
“ organization’ ‘Authorized shall mean and include religious organization fide bona or charitable or organiza- bona fide educational, fraternal or service organization tion or bona fide of veterans or volun- firemen, teer incorporation, charter, which its certificate of legislature, constitution, or act of the among purposes shall have its dominant one or more purposes of the lawful as defined in article, this provided operate profit that each shall without provided organiza- members, its each engaged serving tion has one or more the law- purposes period ful as defined in this article for a years immediat[e]ly prior applying three for a license under this article.” argued Legislature authority
It has been that the State had (1) enact B of 383 of the Laws of 2001 because: ostensibly since New York allows what class III for purposes, charitable and other New York must allow the com- (2) for-profit mercialized, casino here; at issue by approving gambling citizens of State, New York for chari- purposes, thereby approved table and other have class III com- gaming. argument unavailing mercialized casino This because focusing instead of on whether the New York State Constitution pass authorizing authorizes a law agree bring Governor to unconstitutional, about commercial- gambling, argument incorrectly ized this focuses on the noncom- gambling permits justification mercial New York State for compacts the contention that New York State can enter for the gambling establishment of commercialized facilities on Indian way, argument plain lands. Put another fails to consider the § language of the and how I, of article State Constitution21 authority, Legislature’s provision affects this constitutional legislation related to commercialized thereof, lack to enact or gambling. § generally proscribes I, 9 above,
As noted article proceeds applied except towards the net are for lotteries where betting games pari-mutuel races,22 on horse education, (e.g., types organizations engaged chance to certain organizations) specific, nonprofit limited and conducted charitable). games purposes (e.g., I, 9, article these Under they strictly regulated are not com- chance are to ensure example, net I, article 9 dictates where mercialized. For proceeds go, manages operates game, person or that no who management operation paid participating in shall be (2) game, prize Further, article amounts. legislature pass appropriate provides laws to ef- that, “The shall [and] purposes that such of this subdivision ensure fectuate the games *40 gam- rigidly regulated prevent commercialized to are legislation passed, pursuant bling.” this constitutional The to similarly Licensing Law, directive, i.e., the of Chance Games “discourage gambling in all its of commercialization seeks games premises including of of commercial forms, the rental availability the net a maximum of chance, and to ensure [ ] exclusively application games proceeds chance of of unambigu- provision plain a is and language 21. “When of constitutional indicated ous, given to ‘the intention of the framers ... as full effect should be (Matter by People” King v by employed’ approved and the language the omitted]). 247, Cuomo, [1993] [citations 81 NY2d in legislative power of this state shall be vested “[t]he it is true that While (NY Const, III, 1),§ Court assembly” art this has stated: the senate and postulate, the “It needs no citation of authorities to sustain Constitution, legislative power is the except as restrained provision supreme, and that a untrammeled and constitutional legislature partic- cognizance of the which from the withdraws regulates legisla- subject, qualifies or the exercise of ular or which subject, of that respect particular to a incident power tive Nothing under its control. other matters and incidents leaves all legislative power, except that which from the sum of is subtracted (Matter by necessary implication expressly or withdrawn” is [1886]). Co., 350-351 Thirty-Fourth R.R. 102 NY St. IGRA, activity categorized gaming. as class III would be 22. Under this I, exception set forth in article activity a constitutional specific Because this authorizing negotiate the Governor Legislature § could enact law only for the establish- ultimately compact with an Indian tribe and enter into betting horse races would be facility pari-mutuel on ment of a where conducted. (General Law causes and
worthy
undertakings”
Municipal
185).
§ 9 of the
foregoing,
I,
§
Based on the
article
for commercialized
clearly prohibits
State Constitution
gaming
chance,
further,
and
and
acts
games
commercialized
purposes
of the
to enact
power
as a limitation on the
laws
Legislature
games
to such
of chance.23
pertaining
gaming
Here,
B
au-
Legislature,
enacting part
chapter
to execute
for the
compacts
thorized
Governor
tribal-state
III,
class
casino
fa-
gaming
establishment
six
up
for-profit
cilities
Indian lands
lands
“after-acquired”
pursuant
(1) (A).
(b)
25 USC 2719
There is no
and the majority
dispute,
the gaming
contemplated
facilities
under
agrees,
(and
legislation
games
engaged
to be
at these
facilities)
are commercial
nature and fall
within the
squarely
I,
of commercial
under article
type
activity
prohibited
Moreover,
§ 9.24
authorizing
execution of
provisions
for the
compacts
tribal-state
establishment
above-
I,
mentioned
facilities do not
with article
prohibited
comport
Thus,
9.25
view of the limitation on
Legislature’s
power
I,
9,§
set forth in article
and the
where
axiom that
a constitu-
I,
prohibits
activities,
Legislature
23. Because article
these
passing
allowing
e.g.,
restrained from
&
laws
such activities
Blue Cross
[1996]).
McCall,
Further,
Blue Shield Cent. NY. v
purposes, the nature tribes, located, are then criminally the State which tribes prohibited (Id.) engage gaming.” governments, are free to in such *42 legislative argument, although his- Respondents’ supported IGRA’s 27. Cabazon, upheld a similar tory, Supreme the Court leads to an odd result. In law cited do provisions by respondents IGRA case for State’s to provide Legislature not authorization enact like B that laws 383. IGRA presupposes authority York State has the to enact such laws.28 However, the fact IGRA, not that IGRA nothing preempts lands, the field in the area of on Indian not the IGRA gaming role on Indian defined of states the regulation lands,29 not the states requirement negotiate compacts that faith, not the fact that good compact meant requirement state, to take into account interests tribe and not the that Secretary fact of the Interior has the to impose power commercialized casino if a is not entered gambling compact into, article counters 9 limitation to the Legislature’s legislation State, to enact power authorizing through Governor, to for agreement execute of un establishment constitutional, illegal commercialized Put another gambling. However, argument. my own, i.e., Justice Stevens had reservations akin to argument that the dissenting makes little In a opinion, sense. written joined by Scalia, Justice Stevens and wrote that: Justices O’Connor and Justice Stevens “Today prepared acknowledge Court seems to that an Indian may tribe’s commercial transactions violate with non-Indians however, public policy.’ reasons, ‘the State’s . . . The Court that operation high-stakes games bingo afoul of does run public policy permits California’s State because the some forms and, gambling specifically, bingo. ap- some forms of I find this proach policy’ curious, say ‘public to the least. The State’s policy concerning gambling specific is to authorize certain gambling carefully comply regulation activities with defined and that provide revenues either for the State or certain itself unregulated all purposes, prohibit charitable commercial operated private profit. argue lotteries that are To that the bingo public tribal games comply policy with the of California permits gambling because the some other is tantamount arguing driving an hour over 60 miles is consistent with public driving up policy speeds because the State allows at 224-225). (Cabazon, miles an hour” 480 US problem particular 28. One presupposing with IGRA that a state has the authority exactly legislation enact similar to B is that no two states have history why all, regarding gambling the same or behind motivations gambling proscribed, why particular prohibit some or no chose to state city statute, rights provision. via ordinance or bill states, sovereign through are IGRA nations allows compacting gain on Indian process, to measure of control over lands [1996]). Tribe, US 44 Seminole *43 294 necessarily governs
way, law, the exercise law, state not federal Legislature’s power legislation.30 enact of the to gaming states that “Class III activities shall be lawful IGRA only if . . in a on Indian lands such activities are . located State nization, permits entity” gaming (25 USC for 2710 purpose [d] [1] [B]). by any Applying person, Justice orga reasoning it does that if case, Stevens’ to the instant not follow permits purposes, it class III for charitable must a state gambling by way permit on of a commercial Indian lands provision compact of in violation a state’s own constitutional (Cabazon, dissenting]). most, At [Stevens, J., at 222-227 480 US required permit III on Indian the state be to class would interpretation purposes. Such would not lands charitable an Nothing the York in IGRA violate New State Constitution. contrary. requires Moreover, can the Constitution be the by People York. amended the of the State of New (737 Supp Pequot v F 169 Mashantucket Tribe State Conn. of [1990]) [1990], F2d v Cabazon California affd (480 [1987]), heavily US 202 two cases Band Mission Indians by respondents, change relied on do not this conclusion because controlling applicable. In Mashan- these are neither nor cases sought Pequot negotiations tucket, the to into with Tribe enter games casino-type the State Connecticut to conduct chance statutory generally Connecticut’s scheme on its reservation. nonprofit gambling permitted prohibited commercial but nights” organizations Vegas games to conduct “Las organizations. At funds the heart chance raise of both the District Mashantucket decision was conclusion regulated rather Court and the Second Circuit Connecticut required prohibited gambling and thus was than negotiate Connecticut Pequot compact hand, Tribe. On the other with the §I, York article 9 of New State the instant case involves long- provision York’s Constitution, which reflects New standing against type policy of commercialized sought permitted on the here and acts as a limitation be legislation part authority Legislature’s like B of to enact (See history long York’s constitutional New 383. discussion Saratoga County prohibiting gambling Chamber Commerce in legislature’s compact requirement, not on a focus is IGRA’s Similarly, thereof, legislation given power, or to enact area. lack (100 [2003]) County focused on Saratoga Court’s decision in NY2d authority compact, rather than on whether had whether Governor limitation. legislate a constitutional Legislature’s ability to was thwarted [2003] [G.B. Pataki, Smith, J., concur 826-828 NY2d ring antigambling provi dissenting part].) The supreme only the State and can be re sion law of People by amending pealed York State New XIX, constitution NY Const, art significantly
Constitution more deference should accorded Mashantucket, which did than statutes issue statutes strong antigambling policy not reflect as York’s and as New repealed. have since been respect Cabazon,
With it should be noted that while IGRA *44 adopted language pertaining has II and Cabazon to class class gaming, primary III resolved, on the facts and issue to Caba- be distinguished First, can zon from the instant case. unlike the California) (i.e., case, instant state that Cabazon involved a did antigambling policy not Second, have as clear York. New attempt operate bingo Cabazon an Indian involved tribe’s parlors gaming which, IGRA, under falls under class II and jurisdiction oversight regulation by within tribal with Gaming Moreover, National Indian Report Commission. Senate accompanied eventually which that became the bill IGRA (i.e., legislative history) language IGRA’s links from Cabazon, regulatory/prohibitory gaming i.e., the distinction, to class II remaining gaming, gambling silent III while as to class activity at issue here. and very Given this the fact that class II and gaming regulated ways, Congress class III are different contemplated gam- different for class II class III treatment (1) ing. analysis Third, involved an Cabazon of: whether stat- county addressing gambling ute and ordinances were criminal (2) (i.e., (i.e., prohibitory) regulatory); or civil and whether Cali- fornia could enforce its laws on Indian land. The Legislature instant case whether has the author- considers ity legislation to enact in direct is contravention New York State Constitution. plain unambiguous
Thus, view limitation on legislative authority § set forth in article 9 of the New York Legislature Constitution, the State did not have the authority part chapter to enact B of 383 of the Laws of 2001. any reading Further, neither IGRA nor of Mashantucket and authority. grant Legislature could Accord- Cabazon ingly, chapter void and un- B of 383 must be set aside as (regarding § including constitutional, Executive Law authority compacts) and Governor’s to enter into tribal-state (b) (a) (1) (regard- to Penal the amendments Law 225.30 ing legalization for class III machines of slot purposes). holding regarding affirming B of court’s the lower
In thereby disregarding I, 9 limita- the article 383, and essentially majority Legislature, concluded has on the tion provides to circumvent for the a means that IGRA legislation pass limitations and constitutional this State’s suggests, with at least conclusion not. This could it normally control regard exerts lands, that IGRA on Indian supplants passed legislation State’s and even over how sovereign as a York State’s status In of New Constitution. view is the Constitution York State’s and the fact that New state supreme incorrect. State, this notion is law of the regard extending power effectively IGRA, with Moreover, people improper because Constitution, to the State’s Secretary Congress of the Interior or the State, approve Legislature, the State Constitution or the State any Thus, if XIX, Const, art thereto NY amendments subject permitted people and vote on to consider are not rights constitutional Constitution, their the State covered under have been violated. exceptions approved people example, certain have
For *45 regulated, highly gambling, general as as well ban on the State’s § games I, 9 under article chance authorized noncommercial 9-A of the Gen- and article State Constitution of the New York high-stakes Municipal commercialized However, the Law.31 eral gaming chapter contemplated part games B of 383 under (3) provides: § 186 Municipal Law 31. General “ only games the mean and include of chance’ shall ‘Games wheels’, boards’, ‘merchandise ‘coin ‘merchandise known as cards’, ‘raffles’, jars’ and such other boards’, and ‘bell ‘seal board, prizes in by the which may authorized games as be specific winning number or designated the basis of a are awarded symbols colors, symbol determined numbers, or color or commonly ‘bingo as or games known chance, including hut not of this fourteen-H under article are controlled lotto’ which ‘bookmaking’, ‘policy or numbers including not chapter and also penal law. ‘lottery’ in 225.00 as defined section games’ and money by player one wagering of involve game of chance shall No against player.” another (2) (1) including: craps; “games of chance” other has authorized The Board (7) (5) (6) (4) wheel; (3) nine; money color six; big big roulette; blackjack; (11) (10) (9) seven; the (8) beat hazard; and over chuck-a-luck; under wheel; (15) (14) (13) wheel; poker (12) seven; best race dealer; joker horse hang; (see (18) (17) 5620.3- (16) wheel; 9 NYCRR wheel; raffles card hand; fruit 5620.22).
297 approved by people.32 Legisla- words, not In the were the other by purporting power, policy ture, to make a within its decision enacting delegated authority part i.e., B, the the Governor compacts, authority pursuant that, execute tribal-state legislative power I, 9, limitation on forth article set Legislature Accordingly,part improper not B is an does have. legislative authority delegation plaintiffs contend. This Legislature authority implies that the had the to enact B. authority Instead, empower because does not have the agreement a state official to enter into for the gambling, Legislature’s establishment commercialized “delegation” consequence. anwas action without
Although (3), Municipal under General Law other games may following of chance authorized Board, games, Compact, included the instant Tribal-State have not (1) “games been authorized as of chance” York under New law: (2) (3) (4) poker; poker; baccarat; keno; carribean stud it ride let (5) (6) (7) (8) gow pai poker; gow pai minibaccarat; tiles; red (9) (10) (11) (12) dog; super pan; Spanish bo; sic war; casino (13) (14) blackjack; blackjack; multiple action three card poker. games permitted engaged These are not to be purpose by any person, organization entity 25 USC §2710 [d] [1] [B]). Accordingly, even if New York State could legally compact, into enter it tribal-state could refuse to negotiate regarding with Seneca Nation Indians operation games e.g., Cheyenne tribe’s these unauthorized 1993]). [8th Riv. of S.D., Sioux Tribe F3d State Cir Note negotiate also that can refuse to if the Seneca operate game Nation of Indians wants a variation of (id.). game light Moreover, authorized the article Legislature’s power, subject limitation to the matter of clearly B falls within the ban on commercialized gaming. legislation, authorizing specifically portions
This the exe- *46 put through compacts, cution of should first have been the example, blackjack, regulated, game[ 32. For ] “authorized of chance” 5620.5), York, approved is people NYCRR was the New materi- ally major game Niagara different the played from at the Seneca Casino. One difference is the maximum bet The maximum bet the “autho- amount. for (id.). game equivalent chips rized” is or its in maximum bet $5 Meanwhile the $2,500, game for the “same” at the Niagara the Seneca Casino times Place, regulated, game amount of the Brief for “authorized” Park people approve game It is clear that “this” the of New York State did not blackjack. process people of York State could amendment so that the New high- compacts the decide whether such establishment games gaming permissible under the or should become stakes Legislature can enact and the State Constitution whether authorizing compacts. legislation Because the execution of such gaming games, pro- high-stakes commercialized and and the the put people regarding compacts the were not before visions through the rights process, York’s the amendment citizens have been violated. presents problem regarding
Affirming part B another During ability people to exercise their collective voice. theoretically, argument, respondent conceded that oral state placed legal having impediment no casinos there would be requirements regard- City Albany long New York and as ing after-acquired Indian Indian lands held trust for an tribe (25 [A]) Secretary Specifically, [b] [1] if USC 2719 are met. (1) example, purchases in, for New York of the Interior: land (2) Albany City tribes; for Indian and holds it trust establishment(s) newly on the determines that a acquired Indian lands be in the best interest tribe would members, not be detrimental to the surround- and its and would (3) community; ing concurs, the Governor there could Albany City commercialized Indian New York process, required approval, via the amendment without people York. of the State New
Conclusion Contrary majority’s position, part B of duly given the article 9 limita- because, enacted statute ability legislation empowering Legislature’s to enact tion on the agreement to enter the establishment the Governor gambling, Legislature did not have commercialized authority way, York’s Put another since New to enact B. statutory author- does not have the constitutional gambling, ity legislation it to establish commercialized to enact certainly legislation empowering the Governor cannot enact establishing purpose compacts casinos for the execute sole gambling place. take commercialized will where pertaining majority points made a number of validity of Indian and the can exert on lands control state games gaming compact, IGRA, under i.e., that, it noted under a apply prohibiting do not laws commercialized state enjoys regulatory over more control lands, that a state *47 gaming ordinarily, further, Indian regarding that casino than it would gaming, regulation is to such “state involvement and 261.) (Majority op points However, favored.” do not be at these necessarily step precedes consider the negotiation that the Governor’s entering compacts, gaming i.e., Indian the legislative necessary Saratoga authorization held under County. Regarding majority step, the this states that under Saratoga County, negotiating entering compacts involve policy major- power Legislature decisions within the of the ity op Saratoga County, 262; at However, NY2d Legislature subject decision did not consider that the to a prohibits enacting constitutional limitation that it from the type legislation given clear, at issue here. In other it is words, statutory Legislature’s the constitutional and limitations on the power gambling, to enact laws furtherance of commercial passing example that laws in that area cannot be considered an policy power Legislature. aof within decision the Since passing establishing laws commercialized not a policy power Legislature, decision within the the Legislature’s enactment B 383 cannot stand.33 sovereign right, Congress, Also, as New State is in its own through Legislature IGRA, cannot dictate what areas the can legislate in or direct the to take action it could ordinarily especially legislation take, when the that results from such dictation be in direction would direct contraven- Legislature’s tion with a constitutional limitation on author- ity given approved in a Moreover, act area. article 9 was people general prohibition of the State of York as a against gambling, exceptions, with certain a and as limitation general Legislature’s right legislate. sup- on the IGRA cannot plant provision that constitutional because that would necessar- ily rights mean and interests that IGRA is most concerned protecting, outweigh i.e., with tribes, those Indian people ofwill of New York State. (527
Finally, [1999]), 706, 748, Alden Maine US a Congress require case which held that could not state be Supreme court, sued in a state stated: Court regarding governance IGRA was meant preempt field Further, gaming activities Indian lands. a main thrust of IGRA if a is that any type state a certain purpose, allows conduct for a state must al- Indian engage low tribes to conduct on lands purpose. key concepts speak prohibition against These to whether a state law lands, a certain kind of can apply conduct on Indian not whether Legislature may pass given laws area.
“Although grants powers broad the Constitution Congress Congress, requires that our federalism with their treat the States in manner consistent *48 joint sovereigns participants residuary status as and governance . . . in the of the Nation.
“Congress power power. not all has vast but When Congress legislates affecting States, in matters may sovereign mere it prefectures these entities as not treat Congress corporations. must accord
or joint participants the esteem due to them as States premise system, beginning in a federal one with the sovereignty and central Government both the ample separate Congress to has means States. compliance it laws, federal with valid but ensure sovereignty respect the of the States.” must negate According Congress decision, to the Alden could goes policy that back over three York State constitutional New negate Congress, through did not or Moreover, IGRA, centuries. negate policy. an in- submit to such intend to terpretation, that Rather than Supreme otherwise, rules this
until Court York State adhere to the clear mandate the New Court should Constitution. chapter foregoing, part B of should be held on the
Based any compact(s), illegal entered void, unconstitutional, and as chapter pursuant part held as void B of should be into pursuant opened operating any unenforceable, casinos compact opera- unable to continue to such a should declared York State officials and the and other New tions Governor engage in activities furtherance be declared unable should part chapter Further, the lower B of I would reverse summary judgment portion granting on that court decision chapter complaints pertaining part appellants’ B 383 and causes of action. reinstate those Attorney General, as is case,
In Governor and the forgo duty requiring right, them to have seen their their apply federal statute. State Constitution New York they Normally for the Constitution. be advocates would people of New York of the State is to leave result Rights. provision in its Bill of for a a state advocate without ap- Attorney Perhaps, should have General this Court govern- pointed is clear that the federal case, In while it one. preempted in how be conducted the field ment has preemption that forces New lands, it not follow does on Legislature approve York to its have Governor commercial gambling spite Nothing York the New State Constitution. requires up IGRA to set commercial acquired by or on Indian lands lands Indians. agree majority’s holding regarding
Because I do not with chapter B 2001,1 383 of the Laws of dissent. (dissenting). majority’s R.S. J. I from dissent hold- Smith, ing C of the Laws of 2001 is constitu- Appellate holding tional, and would affirm the it Division’s (1) requirement is not. The of article I, 9 the New York proceeds lottery applied Constitution that the net of a “shall be exclusively support or in aid or of education” can be too eas- ily may require spend evaded if the vendors to portion they of the funds receive from the for noneduca- *49 purposes Legislature’s choosing. tional originally provided The statute as enacted for a “vendor’s fee” to racetracks of between 12% and 25% of the revenue remaining payment prizes, required after and to the vendors purses “reinvest” between 35% and 45% that fee in enhanced breeding Legislature required and a In fund. words, other after-prize that between 4.2% and 11.25% revenue be devoted prizes increasing breeding to racetrack and horses—not to the support Legislature “aid or of education.” The not could have appropriated lottery purses funds for racetrack or horse breed- ing, accomplish by and should not be to allowed the same end directing vendors to “reinvest.” simple. me,
To the issue that is It not that, is relevant as the majority notes, other statutes direct racetracks to divert some purses breeding (majority op of their income to and at funds 267-268); apply lottery to income which those not statutes is subject “exclusively income and is not to to . . . education” §I, restriction of article 9. Nor is it relevant that the maximum part vendor’s under fee C was increased from to 25% 29% 269); remaining prizes (majority op revenue after at levels, reinvestment was included in fee so both the increase proves nothing about whether the reinvestment had the effect inflating the fee. majority’s position plaintiffs
The essence is that have proved not a that the reinvestment is device to thwart majority suggests constitutional limitation. The that vendor’s fee called for the statute is not inflated required may reinvestments—that the fee be the a lowest any event, that the reinvestments take
vendor would anyway. may expenditures make the racetracks would he “[t]he majority says Legislature was entitled to also that expenditures are a reason- that the reinvestment determine” way attendance, that increased enhance racetrack able (majority op lottery at in turn increase revenues attendance will plaintiffs proved agree the reinvestment I have not that that designed provisions C were to evade the constitutional very disprove requirement; prove evasion, it or to is hard majority generally “[i]t agree it. I also with the that particular vendor’s fee ... determine whether the courts to 269); usually (majority op indeed, at it will reasonable” impossible why precisely so. That is a “reinvest- for courts to do temptation requirement that offers ment” saying escape Indeed, the constitutional restriction. wants “flagrant perhaps imagine” a where a end it “can case requirement would be invali- run” around the constitutional 269), majority (majority op seems sanction dated being flagrant. I find end run that falls short advance approach I, 9, of article this too lax an to the enforcement simply legislatively-directed no I hold think we should from vendor’s fees to noneducational diversions of funds purposes are allowed. Judges Judge and Read Kaye Chief Rosenblatt, Graffeo Judge Judge Smith dissents in G.B.
concur with Ciparick; *50 chapter modify by declaring part B and votes to opinion; Judge separate R.S. in a Laws of 2001 unconstitutional opinion to affirm in another Smith dissents and votes pertains Judge in much thereof as which G.B. Smith concurs so of the Laws of 2001. C of modified, etc. Order