The Honorable Frank J. Corte Jr. Chair, Committee on Defense Affairs and State-Federal Relations Texas House of Representatives Post Office Box 2910 Austin, Texas 78768-2910
Re: Whether constitutional authorization of video lottery terminals on Indian tribal lands would permit Indian tribes to offer casino gambling in Texas (RQ-0214-GA)
Dear Representative Corte:
You request an opinion on questions related to House Joint Resolution 1 of the Seventy-eighth Legislature, Fourth Called Session.1 See Tex. H.R.J. Res. 1, 78th Leg., 4th C.S. (2004). This resolution proposed amending Texas Constitution article
Article
See Tex. H.B. 1, 78th Leg., 4th C.S. (2004); H.J. of Tex., 78th Leg., 4th C.S. 193 (2004); S.J. of Tex., 78th Leg., 4th C.S. 58 (2004).4
The Texas Band of Oklahoma Kickapoos, who were recognized by the federal government in Public Law 97-429,
25 U.S.C. § 1300b-11 , without any reference to the tribe's right to offer gaming.5The other two recognized tribes in Texas — the Alabama-Coushatta Tribes of Texas and the Ysleta del Sur Pueblo (also known as the Tigua Indian tribe) — which were recognized under the Ysleta del Sur Pueblo and Alabama-Coushatta Tribes of Texas Restoration Act in 1987,
25 U.S.C. § 1300g-1 ; that legislation specifically states that "[a]ll gaming activities which are prohibited by the laws of the State of Texas are hereby prohibited on the reservation and on the lands of the tribe." 25 U.S.C. §[§] 737(a)[, 1300g-6.]Other Indian tribes not currently resident in Texas but with a historical relationship to Texas lands, such as the Comanche, the Kiowa, the Mescalero Apaches, and the Cherokees.
Indian tribes in Texas that have not been recognized officially [by the federal government], but may be recognized in the future.
See Request Letter, supra note 1, at 1-2 (footnote added).
Your questions are summarized as follows: (1) may the state "authorize VLT gaming on tribal lands outside the jurisdiction of the federal Indian Gaming Regulatory Act;" (2) if a constitutional amendment and enabling legislation authorize VLTs on Indian reservations, will the Indian Gaming Regulatory Act "authorize Texas tribes to conduct all forms of casino-style gaming;" and (3) does the Indian Gaming Regulatory Act bar the state from "receiving a share of the revenues from VLTs . . . without a grant of territorial exclusivity or other unique benefit to the tribe?" See id. at 2. In addressing your questions, which raise issues of federal law, we rely on the relevant federal statutes and judicial decisions.
II. VLT Legislation, Seventy-eighth Legislature, Fourth CalledSession
House Joint Resolution 1 proposed the following addition to article III, section 47:
(f) The Legislature by general law may authorize the State to operate video lottery games and to contract with one or more of the following legal entities to operate video lottery games on behalf of the State:
(1) a person licensed in this State to conduct wagering on a horse race or greyhound race; or
(2) an Indian tribe recognized by the United States government under federal law.
Tex. H.R.J. Res. 1, § 1(f),78th Leg., 4th C.S. (2004) (as introduced) (emphasis added).
The Secretary of the Interior (the "Secretary") is required to publish a list of federally recognized tribes in the Federal Register. See
The Committee Substitute to House Joint Resolution 1 expressly identified the three federally recognized Texas Indian tribes, providing that the legislature might "allow only the following legal entities to operate video lottery games on behalf of the State":
(A) a person licensed in this State on May 1, 2004, to conduct wagering on a horse race or greyhound race . . . ;
(B) the Ysleta del Sur Pueblo and Alabama-Coushatta Indian tribes, which, under an agreement with this State in the form prescribed by general law or negotiated by the governor and ratified by the Legislature, operate the games on lands held in trust by the United States for such tribes on May 1, 2004 . . . ; and
(C) the Kickapoo Traditional Tribe of Texas, which, under an agreement with this State in the form prescribed by general law or negotiated by the governor and ratified by the Legislature, operates the games on lands held in trust by the United States for the benefit of the tribe on which Class III gaming is permitted under the Indian Gaming Regulatory Act of 1988. . . .
Tex. Comm. Substitute H.R.J. Res. 1, § 1(f)(4)(A)-(C), 78th Leg., 4th C.S. (2004); see also H.J. of Tex., 78th Leg., 4th C.S., 8, 29 (2004). The Committee Substitute also required the law authorizing the video lottery system to provide that "net revenue generated from video lottery terminals operated by an Indian tribe on Indian lands shall be distributed as set forth in the agreement authorizing the tribe to operate video lottery games, provided that the State must receive not less than 25 percent of the net revenue." Tex. Comm. Substitute H.R.J. Res. 1, § 1(f)(9)(b), 78th Leg., 4th C.S. (2004).
IGRA permits federally recognized Indian tribes to conduct gaming activities under stated circumstances and creates the National Indian Gaming Commission to regulate such activity. See
Class III gaming includes all other forms of gaming, see id. § 2703(8), in particular, the "lucrative casino-style games such as blackjack, slot machines, roulette, and baccarat." Ysleta del SurPueblo v. Texas,
IV.Whether the State May Authorize VLT Gaming on Tribal LandsOutside the Jurisdiction of IGRA
A. Lands Belonging to the Alabama-Coushatta or Ysleta del Sur Pueblo Tribe
You first ask whether the state may authorize VLT gaming on tribal lands outside the jurisdiction of the federal Indian Gaming Regulatory Act. The Kickapoo Traditional Tribe of Texas is subject to IGRA. See National Indian Gaming Commission, Gaming Tribes.9 See generally Diamond Game Enters., Inc. v. Reno,
(a) In general
All gaming activities which are prohibited by the laws of the State of Texas are hereby prohibited on the reservation and on lands of the tribe. Any violation of the prohibition provided in this subsection shall be subject to the same civil and criminal penalties that are provided by the laws of the State of Texas. The provisions of this subsection are enacted in accordance with the tribe's request in Tribal Resolution No. T.C.-86-07 which was approved and certified on March 10, 1986.
(b) No State regulatory jurisdiction
Nothing in this section shall be construed as a grant of civil or criminal regulatory jurisdiction to the State of Texas.
(c) . . . the courts of the United States shall have exclusive jurisdiction over any offense in violation of subsection (a) of this section that is committed by the tribe, or by any member of the tribe, on the reservation or on lands of the tribe. . . .
The Fifth Circuit in Ysleta del Sur Pueblo, after reviewing the Restoration Act and its legislative history, concluded that the Restoration Act's specific provisions on gaming applicable to the Ysleta del Sur Pueblo prevailed over IGRA and governed gaming on that tribe's lands. See Ysleta del Sur Pueblo,
The federal district court in Alabama-Coushatta Tribes v. Texas,
It shall be unlawful to manufacture, recondition, repair, sell, transport, possess, or use any gambling device . . . within Indian country as defined in section 1151 of Title 18. . . .
Id. § 1175(a). "Indian country" means "(a) all land within the limits of any Indian reservation under the jurisdiction of the United States Government, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation, (b) all dependent Indian communities within the borders of the United States . . ., and (c) all Indian allotments, the Indian titles to which have not been extinguished, including rights-of-way running through the same."
The Johnson Act defines "gambling device" as follows:
(1) any so-called "slot machine" or any other machine or mechanical device an essential part of which is a drum or reel with insignia thereon, and (A) which when operated may deliver, as the result of the application of an element of chance, any money or property, or (B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property; or
(2) any other machine or mechanical device (including, but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and (A) which when operated may deliver, as the result of the application of an element of chance, any money or property, or (B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property.
IGRA includes the following partial exemption from the Johnson Act:The provisions of section 1175 of Title 15 shall not apply to any gaming conducted under a Tribal-State compact that —
(A) is entered into under paragraph (3) [relating to Tribal-State compact] by a State in which gambling devices are legal, and
(B) is in effect.
Any legislation singling out such groups of Indians for special treatment would raise issues under the Equal Protection Clause of the United States Constitution. See U.S. Const. amend.
States do not have a similar unique relationship with Indian tribes and may enact legislation according special treatment to Indian tribes only when authorized to do so by Congress. SeeConfederated Bands and Tribes of the Yakima Indian Nation,
V. Whether Legalization of VLTs on Indian Reservation AlsoLegalizes Other Casino Games on Reservation
You raise the following question: if Texas permits one kind of Class III gaming activity, are all Class III gaming activities lawful on Indian lands or only the specific type of Class III gaming permitted by the state? See id. Federal appellate courts have reached different conclusions on this question. See RumseyIndian Rancheria of Wintun Indians v. Wilson,
Some judicial decisions on this question rely on the following IGRA provision:(1) Class III gaming activities shall be lawful on Indian lands only if such activities are —
. . . .
(B) located in a State that permits such gaming for any purpose by any person, organization, or entity. . . .
Some courts have held that IGRA incorporates the holding ofCabazon that if state law generally permits gaming, subject to regulation, the state is not authorized to enforce its law on an Indian reservation. See Cabazon,
In Ysleta del Sur Pueblo v. Texas,
an offer of merchandise, with a value not greater than $25, made by the proprietor of a bona fide carnival contest conducted at a carnival sponsored by a nonprofit religious, fraternal, school, law enforcement, youth, agricultural, or civic group, including any nonprofit agricultural or civic group incorporated by the state before 1955, if the person to receive the merchandise from the proprietor is the person who performs the carnival contest.
Tex. Pen. Code. Ann. § 47.01(1)(C) (Vernon 2003). Because the "carnival exception" permitted some persons to engage in casino gaming, the state was required to negotiate with the tribe about the Class III casino games requested by the tribe. Ysleta del SurPueblo v. Texas,
As we have noted, the Fifth Circuit disagreed and determined that the Restoration Act, and not IGRA, applied to the Ysleta del Sur Pueblo. See Ysleta del Sur Pueblo,
The question before us involves an interpretation of IGRA, a federal statute. Neither the United States Supreme Court nor the Fifth Circuit has decided the scope of Class III gaming for recognized Indian tribes in states that permit only limited kinds of Class III gaming activities, while other federal courts of appeals have reached different decisions on this question. Under these circumstances, we conclude that this question is an open question of federal law in this state, and as such, cannot be given a definitive answer in an attorney general opinion. SeeUnited States v. Gomez,
VI. Whether IGRA Bars the State from Receiving a Share of theRevenues from VLTs on Indian Reservations
You ask whether IGRA bars the state from receiving a share of the revenues from VLTs without a grant of territorial exclusivity or another unique benefit to the tribe.
IGRA provides that a tribal-state compact for Class III gaming may include provisions relating to "the assessment by the State of such activities in such amounts as are necessary to defray the costs of regulating such activity."
Except for any assessments that may be agreed to under paragraph (3)(C)(iii) of this subsection, nothing in this section shall be interpreted as conferring upon a State or any of its political subdivisions authority to impose any tax, fee, charge, or other assessment upon an Indian tribe or upon any other person or entity authorized by an Indian tribe to engage in a class III activity. No State may refuse to enter into the negotiations described in paragraph (3)(A) based upon the lack of authority in such State, or its political subdivisions, to impose such a tax, fee, charge, or other assessment.
Id. § 2710(d)(4).
IGRA does not expressly provide that a tribal-state compact for Class III gaming may include provisions for sharing gaming revenues with the state. The Interior Department has, however, approved revenue-sharing provisions in some tribal-state compacts negotiated under IGRA.
See Oversight Hearing On the Indian Gaming Regulatory Act of 1988before the Senate Comm.
on Indian Affairs, 108th Cong. (2003) (statement of Aurene M. Martin, Acting Assistant Secretary-Indian Affairs, Dept. of the Interior).14 The Interior Department stated its position to a Senate Committee in July 2003 as follows:
To date, the Department has only approved revenue-sharing payments that call for tribal payments when the state has agreed to provide [a] valuable economic benefit of what the Department has termed "substantial exclusivity" for Indian gaming in exchange for the payment. As a consequence, if the Department affirmatively approves a proposed compact, it has an obligation to ensure that the benefit received by the state under the proposed compact is appropriate in light of the benefit conferred on the tribe. Accordingly, if a payment exceeds the benefit received by the tribe, it would violate IGRA because it would amount to an unlawful tax, fee, charge, or assessment. While there has been substantial disagreement over what constitutes a tax, fee, charge, or assessment within this context, we believe that if the payments are made in exchange for the grant of a valuable economic benefit that the governor has discretion to provide, these payments do not fall within the category of prohibited taxes, fees, charges, or other assessments.
Id.15
In answer to your question, the Interior Department will not approve a tribal-state compact allowing the state to receive a share of the revenues from VLTs without a grant of territorial exclusivity or another unique economic benefit to the tribe.
We point out that Senate Bill 1529, proposing amendments to IGRA, was introduced in the United States Senate in 2003. See Indian Gaming Regulatory Act Amendments of 2003, S. 1529, 108th Cong. (2003). The proposed amendments include a provision governing the apportionment of revenues, which states that the Secretary may not approve a compact or other agreement that includes an apportionment of net revenues with a state unless the following conditions are met:
(I) the total amount of net revenues [from gaming]
(aa) exceeds the amounts necessary to meet the requirements of [tribal government operations or programs and to provide for the general welfare of the Indian tribe and its members pursuant to25 U.S.C. § 2710 (b)(2)(B)(i) and (ii)16 and to make apportionmentspursuant to subsection (f)(4)(B)(ii) of S. 1529,]17 if applicable; and(bb) [the apportionment] is in accordance with regulations promulgated by the Secretary under subparagraph (C); and
(II) a substantial economic benefit is rendered by the State to the Indian tribe.
See id. (footnote added) (proposing an amendment to
Whether a federally recognized Texas Indian tribe may negotiate with Texas under the Indian Gaming Regulatory Act about only the specific Class III games allowed by Texas law, or whether it may negotiate about all Class III games is an open question in this state.
A tribal-state compact for Class III gaming activities under the IGRA may include provisions allowing state assessments of gaming activities as necessary to defer the costs of regulating the gaming activities. A compact may not allow the state to receive a share of Class III gaming revenues unless the compact grants territorial exclusivity or another unique economic benefit to the tribe.
Very truly yours,
GREG ABBOTT Attorney General of TexasBARRY McBEE First Assistant Attorney General
DON R. WILLETT Deputy Attorney General for Legal Counsel
NANCY S. FULLER Chair, Opinion Committee
Susan L. Garrison Assistant Attorney General, Opinion Committee