- _- 

ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

December 8,2004 

The Honorable Frank J. Corte Jr. 

Chair, Committee on Defense Affairs and 

Opinion No. GA-0278 

State-Federal Relations Re: Whether constitutional authorization ofvideo 

Texas House of Representatives lottery terminals on Indian tribal lands would 

Post Office Box 2910 permit Indian tribes to offer casino gambling in 

Austin, Texas 78768-2910 Texas (RQ-0214-GA) 

Dear Representative Corte: 

You request an opinion on questions related to House Joint Resolution 1 of the Seventyeighth Legislature, Fourth Called Session.’ See Tex. H.R.J. Res. 1,78th Leg., 4th C.S. (2004). This 

resolution proposed amending Texas Constitution article III, section 47 to authorize the state to 

operate video lottery terminals (“VLTs”) at racetracks and on Indian lands. “VLTs are electronic 

games of chance played on video terminals.” HOUSE RESEARCH ORGANIZATION, Focus REPORT, 

BETTING ON VIDEO LOTTERY TERMINALS TO RAISE REVENUE 2 (Mar. 5, 2004)? Visually and 

internally they are similar to slot machines. See id. “Most VLTs are video-based, overseen by state 

lottery agencies, and can be monitored, controlled, and audited by a central computer system[.]” Id. 

“Some VLT games are purely games of chance, while others are video versions of card games such 

as poker and blackjack.” Id. See also Tex. Att’y Gen. Op. No. GA-0103 (2003) at 2 (defining 

VLTs). 

Article IR, section 47 of the Texas Constitution prohibits lotteries except for those 

specifically excepted by section 47(e). See id. at 8; see also TEX. CONST. art. III, 5 47. Thus, a 

constitutional amendment would be necessary to legalize VLTs in Texas. See Tex. Att’y Gen. Op. 

No. GA-0103 (2003) at 8. The legislature did not approve the proposed constitutional amendment 

that would have placed on the ballot a proposition to authorize video lottery terminals. See Tex. 

H.R.J.Res.1,78thLeg.,4thC.S.(2004);H.J.o~T~~.,78thLeg.,4thC.S.218(2004).~Nordidthe 

legislature approve legislation that would have implemented the proposed constitutional amendment, 

‘Letter from Honorable Frank J. Cork Jr., Chair, Committee on Defense Affairs and State-Federal Relations, 

Texas House of Representatives, tp Honorable Greg Abbott, Texas Attorney General (Apr. 27, 2004) (on tile with 

Opinion Committee, also available af http://www.oag.state.tx.us) [hereinafter Request Letter]. 

2Avaikzbk at http://www.capitol.state.tx.us/hrofr/frac. 

‘House Joint Resolution 1 failed of adoption on the House floor. 
The Honorable Frank J. Corte Jr - Page 2 (GA-0278) 

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): 

I. Questions 

You ask about the effect a constitutional amendment authorizing the state to operate VLTs 

at racetracks and on Indian lands would have on the following groups of Indian tribes: 

The Texas Band of Oklahoma Kickapoos, who were recognized by 

the federal government in Public Law 97-429,25 U.S.C. 5 13OOb-11, 

without any reference to the tribe’s right to offer gaming.’ 

The other two recognized tribes in Texas - the Alabama-Coushatta 

Tribes of Texas and the Ysleta de1 Sur Pueblo (also known as the 

Tigua Indian tribe) - which were recognized under the Ysleta de1 Sur 

Pueblo and Alabama-Coushatta Tribes of Texas Restoration Act in 

1987, 25 U.S.C. 5 13OOg-1; that legislation specifically states that 

“[a]11 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. §[§I 737(a)[, 13OOg-6.1 

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 ofcasino-style gaming;” 

and (3) does the Indian Gaming Regulatory Act bar the state horn “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. 

4House Bill 1 passed to engrossment on the House floor and was referred to the Senate Committee of the Whole, 

but failed to progress beyond a public hearing scheduled for May 14,2004, before the Senate Committee of the Whole. 

‘For purposes of this opinion, “gambling” is synonymous with “gaming.” See Ellis v. State, 162 S.W.Zd 407, 

408 (Tex. Grim. App. 1942) (“to bet or wager means to gamble or game for mmey or other stakes”). 
The Honorable Frank J. Corte Jr - Page 3 (GA-0278) 

II. VLT LeGslation. Seventv-eighth Lepislature, Fourth Called Session 

House Joint Resolution 1 proposed the following addition to article III, section 47: 

(0 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. I&S. 1, 5 l(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 25 U.S.C. 5 479a-l(a) (2000). The most recent list 

includes the Alabama-Coushatta Tribes6 of Texas, the Kickapoo Traditional Tribe of Texas, and the 

Ysleta de1 Sur Pueblo ofTexas. See 68 Fed. Reg. 68180-84 (Dec. 5,2003). The Secretary has also 

adopted procedures whereby an American Indian group may seek federal recognition as an Indian 

tribe. See 25 C.F.R. pt. 83 (2004). 

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 . ; 

@) the Ysleta de1 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 ofTexas, which, under an 

agreement with this State in the form prescribed by general law or 

‘Under federal law, the Alabama and Coushatta Indian Tribes of Texas are considered as one tribal unit, and 

we will refer to them at times as the Alabama-Coushatta Tribe. See 25 U.S.C. $732 (2000). 

‘YsletadelSur Pueblo isalso!amwnasTigua. S~~HOLJSEF~ESEARCHORGATION,FOCUSREPORT,BETTING 

ON VIDEO LOTTERY TERMINALS TO RAISERWENUE 6 (Mar. 5, 2004), available af http:llwww.capitol.state.tx.us/hrofr 

Iframe4.htm#foc. 
The Honorable Frank J. Corte Jr - Page 4 (GA-0278) 

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 Ill gaming is permitted under the Indian 

Gaming Regulatory Act of 1988 

Tex. Comm. Substitute H.R.J. Res. 1,s l(f)(4)(A)-(C), 78th Leg., 4th C.S. (2004); see alsoH.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 

ofthe net revenue.” Tex. Comm. SubstituteH.R.J. Res. 1, § l(f)(9)@), 78th Leg., 4th C.S. (2004). 

III. The Indian Gaming Regulatory Act 

In 1988, Congress adopted the Indian Gaming Regulatory Act (“1GRA”or “Act”), 25 U.S.C. 

$4 2701-21 (2000), in response to state concerns about the United States Supreme Court’s decision 

in California v. Cabazon Band ofMission Indians, 480 U.S. 202 (1987). See S. REP. NO. loo-446 

(1988), reprinted in 1988 U.S.C.C.A.N. 3071-72. Cubazon considered whether gaming on an 

Indian reservation was subject to state regulation pursuant to Public Law 53-280,8 a federal law 

granting California broad criminal jurisdiction over offenses committed by or against Indians within 

Indian lands in the state. See Cubuzon, 480 US. at 207-08; 18 U.S.C. 5 1162 (2000); see also 28 

U.S.C. 5 1360 (2000) (civil jurisdiction). The Supreme Court held that if the intent of a state law 

is to prohibit certain conduct, it falls within Public Law 280’s grant of criminal jurisdiction to 

the state, but if the state law generally permits the conduct at issue, subject to regulation, it is 

a civil/regulatory law and the state is not authorized to enforce it on an Indian reservation. See 

Cabazon, 480 U.S. at 209. “The shorthand test is whether the conduct at issue violates the State’s 

public policy.” Id. The court in Cabazon held that Indian tribes in states that otherwise allow 

gaming have a right to conduct gaming activities on Indian lands, unimpeded by state regulation. 

See id. at 221-22. 

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 

25 U.S.C. $3 2704-2710 (2000). The Act establishes three classes of gaming subject to differing 

degrees of federal, state, and tribal regulation. See id. 5 2710. Class I gaming is limited to social 

games, either ceremonial or for nominal prizes, and is free of all but tribal regulation. See id. 

$5 2703(6),2710(a)(l). ClassIIgamingincludesbingo andrelated games, i.e., gamesplayed against 

other players in which the house has no economic interest in the outcome. See id. 5 2703(7). It does 

not include “electronic or electromechanical facsimiles of any game of chance or slot machines of 

any kind.” Id. 5 2703(7)(B)(ii). A tribe may engage in Class II gaming if the state in which the 

tribe is located “permits such gaming for any purpose by any person, organization or entity (and 

such gaming is not otherwise specifically prohibited on Indian lands by Federal law).” Id. 

5 2710(b)(l)(A). Class II games are free of state regulation but are subject to tribal regulation and 

some federal oversight by the National Indian Gaming Commission. See id. § 2710(b)-(c). 

*See Pub. L. No. 53-280, 67 Stat. 588 (codified at 18 U.S.C. 1162 and 28 USC. 1360). 
The Honorable Frank J. Corte Jr - Page 5 (GA-0278) 

Class III gaming includes all other forms of gaming, see id. 5 2703(g), in particular, the 

“lucrative casino-style games such as blackjack, slot machines, roulette, and baccarat.” Ysletu del 

&o-Pueblo v. Texas, 36 F.3d 1325,133l (5th Cir. 1994), cert. denied, 514 U.S. 1016 (1995). Class 

IIl gaming thus includes VLTs. See 25 U.S.C. 5 2710(d)(l)(A) (2000). A tribe may engage in Class 

III gaming if the state in which it is located “permits such gaming for any purpose by any person, 

organization, or entity.” Id. 5 2710(d)(l)(B). Class III gaming must also be authorized by tribal 

ordinance and must be “conducted in conformance with a Tribal-State compact entered into by 

the Indian tribe and the State under paragraph (3) that is in effect.” Id. § 2710(d)(l)(C); see id. 

5 2710(d)(3) (negotiation and terms oftribal-state compact). The compact must be submitted to the 

Secretary of the Interior, who has 45 days in which to (1) approve the compact, (2) disapprove the 

compact, or (3) take no action, in which case the compact is deemed approved, but only to the extent 

it is consistent with the provisions of IGRA. See id. 5 2710(d)(8). IGRA includes a provision 

authorizing a tribe to sue a state in federal court if the state refuses to negotiate a compact with the 

tribe, see id. 5 2710(d)(7)(A)(i), but the Supreme Court has held this provision to be unconstitutional 

for violating the Eleventh Amendment of the United States Constitution. See Seminole Tribe v. 

Florida, 517 U.S. 44, 72-76 (1996). 

IV. Whether the State Mav Authorize VLT Gaming on Tribal Lands Outside the 

Jurisdiction of IGRA 

A. Lands Belonging to the Alabama-Coushatta or YsIeta de1 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 ofTexas 

is subject to IGRA. See NATIONAL INDIAN GAMING COMMISSION, GAMING TRIBES.~ See generally 

Diamond Game Enters., Inc. v. Rena, 230 F.3d 365 (D.C. Cir. 2000) (Kickapoo Traditional Tribe 

of Texas requested National Indian Gaming Commission to classify mechanical device as Class II 

aid). Thus, this question does not relate to gaming on Kickapoo tribal lands in Texas, but it does 

relate to gaming on Alabama-Coushatta and Ysleta de1 Sur Pueblo tribal lands. 

1. Restoration Act 

Gaming on Alabama-Coushatta and Ysleta de1 Sur Pueblo tribal lands is not 

governed by IGRA, but by another federal statute, the Ysleta de1 Sur Pueblo and Alabama and 

Coushatta Indian Tribes ofTexas Restoration Act,” (“the Restoration Act”), which restored federal 

recognition to these two tribes. See 25 USC. $9 731-737 (2000) (restoring federal supervision to 

Alabama-Coushatta tribe); id. 55 13OOg-13OOg-7 (restoring federal supervision to Ysleta de1 Sur 

Pueblo); see also Ysletu de1 Sur Pueblo, 36 F.3d at 1334-35 (addressing gaming on Ysleta de1 Sur 

Pueblo tribal lands). Section 737, which applies to the Alabama-Coushatta tribe, states as follows: 

“‘&e Ysleta de1 Su Pueblo and Alabama and Coushatta Indian Tribes of Texas Restoration Act, Pub. L. No. 

100-89, 101 Stat. 666 (1987) (codified at 25 U.S.C. $5 13OOg-13OOg-7 and25 U.S.C. $5 731-737). 
The Honorable Frank J. Corte Jr - Page 6 (GA-0278) 

(a) In general 

All gaming activities which are prohibited by the laws ofthe 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. . 

25 U.S.C. 3 737 (2000). Identical provisions apply to the Ysleta de1 Sur Pueblo. See id. 5 13OOg-6. 

The Fifth Circuit in Ysletu de1 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 de1 Sur Pueblo prevailed over IGRA and governed gaming on that tribe’s lands. See 

Ysleta delSurPueblo, 36 F.3d at 1329, n.3,1332. Thus, the Restoration Act, and not IGRA, “would 

govern the determination of whether gaming activities proposed by the Ysleta de1 Sur Pueblo are 

allowed under Texas law, which functions as surrogate federal law.” Id. at 1335. 

The federal district court in Alabama-Coushatta Tribes v. Texas, 208 F. Supp. 2d 670 (E.D. 

Tex. 2002), relying on the Fifth Circuit decision in Ysleta de1 Sur Pueblo, held that the Restoration 

Act provisions on gaming also govern gaming on Alabama-Coushatta tribal lands. See AlabamaCoushatta Tribes, 208 F. Supp. 2d at 674, 681 (25 U.S.C. 5 731-37 governs gaming on AlabamaCoushatta tribal lands). The Alabama-Coushatta and the Ysleta de1 Sur Pueblo tribes are subject to 

Texas law governing gaming just as other citizens or entities located in Texas. See generally Texas 

v. Ysleta de1 Sur Pueblo, 220 F. Supp. 2d 668,688-91 (W.D. Tex. 2001), aff 69 Fed. Appx. 659, 

2003 WL 21356043 (5th Cir.), cert. denied, 124 S.Ct. 497 (2003). ’ 

2. Johnson Act 

The federal Gambling Devices Act, 15 U.S.C. $5 1171-1178 (2000), 

commonly known as the Johnson Act, is also relevant to the Alabama-Coushatta and Ysleta de1 Sur 

Pueblo tribes. These two tribes are subject to the following provision of the Johnson Act: 
The Honorable Frank .I. Corte Jr - Page 7 (GA-0278) 

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. 5 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.” 18 U.S.C. 5 115 1 

(2000). 

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 ofthe 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. 

15 U.S.C. 5 1171(a)(l)-(2) (2000). Video lottery terminals are gambling devices within this 

definition. See Citizen Band Potawatomi Indian Tribe v. Green, 995 F.2d 179, 180-81 (10th Cir. 

1993). 

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. 

25 U.S.C. 5 2710(d)(6) (2000). See Citizen BandPotawatomiZndian Tribe, 995 F.2d at 181 (IGRA 

for limited waiver of Johnson Act liability under certain circumstances). The Alabama-Coushatta 

and Ysleta de1 Sur Pueblo tribes are subject to the Restoration Act and not IGRA. Because the 
The Honorable Frank J. Corte Jr - Page 8 (GA-0278) 

Restoration Act does not explicitly exempt these two tribes from the Johnson Act, it appears they 

may not possess or use VLTs on their lands.” 

B. Lands Belonging to Other Groups of Indians 

You also ask whether the state may authorize VLT gaming on tribal lands belonging 

to Indian tribes “not currently resident in Texas but with a historical relationship to Texas lands”” 

or “Indian tribes in Texas that have not been recognized [by the federal government] but may be 

recognized in the future.” Request Letter, supra note 1, at 2. Of course, Texas may not authorize 

VLT gaming on any such lands that are subject to the Johnson Act. 

Any legislation singling out such groups of Indians for special treatment would raise issues 

under the Equal Protection Clause ofthe United States Constitution. See U.S. CONST. amend. XIV, 

5 1; see also Washington v. Confederated Bands and Tribes ofthe Yakima Indian Nation, 439 U.S. 

463, 500-01 (1979); Am. Greyhound Racing, Inc. v. Hull, 146 F. Supp. 2d 1012, 1075-76 (D. 

Arizona 2001), vacated on other grounds, 305 F.3d 1015, 1018 (9th Cir. 2002). Pursuant to the 

Equal Protection Clause, racial classifications are given strict scrutiny by a reviewing court and are 

constitutional only if they are narrowly tailored to further compelling governmental interests. See 

Adarand Constructors, Inc. v. Pena, 515 U.S. 200,227 (1995); see also Rice v. Cayetano, 528 U.S. 

495, 517-24 (2000) (striking down a race-based voting limitation). Federal authority to enact 

legislation singling out tribal Indians for special treatment derives from the power of Congress to 

regulate commerce with Indian tribes, from the treaty power, and from the federal trusteeship over 

Indian lands established by federal statute. See U.S. CONST. art. I, 5 8, cl. 3; art. II, 5 2, cl. 2; 25 

U.S.C. 3 177 (2000). Thus, Indian tribes occupy a unique status that allows the federal government 

to enact legislation singling out tribal Indians even where the legislation “might otherwise be 

constitutionally offensive.” Confederated Bands and Tribes of the Yakima Indian Nation 439 U.S. 

at 501. Federal laws “reasonably designed to further the cause of Indian self-government” and 

applicable only to members of a federally recognized tribe involve a political and not a racial 

classification and are subject to the rational basis test for equal protection. SeeMorton v. Mancari, 

417 U.S. 535, 554 (1974). 

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. See 

Confederated Bands and Tribes of the Yakima Indian Nation, 439 U.S. at 500-01; Peyote Way 

Church of God, Inc., v. Thornburgh, 922 F.2d 1210, 1218 (5thCir. 1991). We findno federal law 

authorizing Texas to adopt laws singling out groups of Indians “not currently resident in Texas but 

“The Restoration Act is silent with respect to the process, procedure and oversight of any gaming activity that 

may be authorized by the State of Texas. Under the language of the Restoration Act and IGRA, federal policy and 

oversight provided for under IGRA that is not inconsistent with the Restoration Act applies to the tribes subject to the 

Restoration Act. It is not clear how a court might address this question and whether it might fmd the limited waiver of 

the Johnson Act liability found in IGRA applicable also to the Alabama-Coushatta and Ysleta de1 Sur Pueblo hibes. 

12We assume that such tribes own land in Texas that might be affected by Texas law, even though they are not 

federally recognized in Texas. 
The Honorable Frank J. Corte Jr - Page 9 (GA-0278) 

with a historical relationship to Texas lands” or “Indian tribes in Texas that have not been recognized 

. [by the federal government] but may be recognized in the future.” Request Letter, supra note 

1, at 2. Texas may authorize such groups of Indians to engage in VLT gaming in the state to the 

same extent it authorizes any other person or group to conduct such gaming. But see 15 U.S.C. 

$5 1171-1178 (Johnson Act). 

V. Whether Leealization of VLTs on Indian Reservation Also Legalizes Other 

Casino Games on Reservation 

You raise the following question: if Texas permits one kind of Class lII gaming activity, are 

all Class III gaming activities lawful on Indian lands or only the specific type of Class El gaming 

permitted by the state? See id. Federal appellate courts have reached different conclusions on this 

question. See Rumsey Indian Rancheria of Win&n Indians v. Wilson, 64 F.3d 1250,1256 (9th Cir. 

1994) amended by 99 F.3d 321(9th Cir. 1996) (state need only allow Indian tribes to operate games 

that others can operate); accord Cheyenne River Sioux Tribe v. South Dakota, 3 F.3d 273,279 (8th 

Cir. 1993). See also Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024,1029-l 03 1 (2d Cir. 

1990), cert. denied, 499 U.S. 975 (1991) (where state permits some Class III games in a highly 

regulated form, it must negotiate under IGRA for casino-type games of chance); Lac du Flambeau 

BandofLake Superior Chippewa Indians v. Wisconsin, 770 F. Supp. 480,487-88 (W.D. Wis. 1991), 

appeal dismissedfor w.oj., 957 F.2d 515 (7th Cir.1992) (where state was authorized to operate any 

kind of lottery, it had to negotiate with Indian tribe over including in tribal-state compact anycasinotype game). 

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. . 

25 U.S.C. § 2710(d)(l)(B) (2000) (emphasis added). The court in Cheyenne River Sioux Tribe 

determined that “[tlhe ‘such gaming’ language of. .25 USC. [§I 2710(d)(l)(B) does not require 

the state to negotiate with respect to forms of [class III] gaming it does not presently permit.” 

Cheyenne River Sioux Tribe, 3 F.3d at 279; accord Dalton v. Pataki, 780 N.Y.S.2d 47, 59-60 

(N.Y.A.D. 2004). 

Some courts have held that IGRA incorporates the holding of Cabazon that if state law 

generally permits gaming, subject to regulation, the state is not authorized to enforce its law on an 

Indianreservation. See Cabazon, 480 U.S. at 221-22;seealsoMashantucketPequot Tribe, 913 F.2d 

at 103 1 (Cabazon analysis applicable to Class Ill gaming). “Applying the Cabazon analysis to IGRA 

essentially requires states to negotiate over all [Class RI] games that are not specifically prohibited 

by criminal law or public policy, rather than the narrower class of games that the state expressly 
The Honorable Frank J. Corte Jr - Page 10 (GA-0278) 

authorizes,” Amy Head, The Death of the New Buffalo: The Ftfth Circuit Slays Indian Gaming in 

Texas, 34 TEX. TECH. L. REV. 377,392 (2003). 

In Ysleta de1 Sur Pueblo v. Texas, 852 F. Supp. 587 (W.D. Texas 1993), rev;i, 36 F.3d 1325 

(5th Cir. 1994), the Ysleta de1 Sur Pueblo tibe sought to negotiate with the Texas governor under 

IGRA for a compact allowing it to conduct various Class III gaming activities on its tribal land. The 

state maintained that only those Class III gaming activities expressly allowed in Texas could be the 

subject ofnegotiations with an Indian tribe. See Ysleta de1 SW Pueblo v. Texas, 852 F. Supp. at 593- 

94. The trial court determined that IGRA applied to the Ysleta de1 Sur Pueblo and construed that 

statute to incorporate the Cabazon analysis for determining the scope of Class III gaming. See id. 

at 591,595-96. It found that Texas law permitted some persons to engage in casino gaming under 

the “carnival exception” in Penal Code section 47.01. See id. at 595. Section 47.01(l), which 

defines the term “bet” for purposes of the chapter 47 prohibitions against gambling, provides that 

a bet does not include: 

an offer of merchandise, with a value not greater than $25, made by 

the proprietor of a bona tide 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. 9 47.01(1)(C) (V emon 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 de1 SurPueblo v. Texas, 852 F. Supp. at 595-96 

(also relying on definition of “lottery’ in Texas Lottery Act). The trial court opinion in Ysleta del 

Sur Pueblo v. Texas thus determined that a federally recognized tribe in Texas may negotiate with 

the state about conducting all Class III games. 

As we have noted, the Fifth Circuit disagreed and determined that the Restoration Act, and 

not IGRA, applied to the Ysleta de1 Sur Pueblo. See Ysleta de1 SW Pueblo, 36 F.3d at 1327. This 

court expressly left open the question whether IGRA incorporates Cabazon with regard to Class III 

gaming. See id. at 1333, n. 17. While the Fifth Circuit determined that the Eleventh Amendment 

barred the tribe’s action against the state under the Restoration Act, remanding the case with 

directions to dismiss the tribe’s suit, see id. at 1332, 1335, the court in Alabama-Coushatta Tribes 

v. Texas, 208 F. Supp. 2d 670 (E.D. Tex. 2002), rejected the argument that all other holdings in the 

Fifth Circuit case were dicta. See Alabama-Coushatta Tribes v. Texas, 208 F. Supp. 2d at 674-75 

(CitingFlorida Cent. R. Co. v. Schutte, 103 U.S. 118,143 (1880) andNardonev. Reynolds, 538 F.2d 

113 1,1135 n. 11 (5th Cir. 1976)). In summary, the Fitth Circuit determined that the Restoration Act 

did not incorporate the Cabazon test, see Ysleta de1 Sur Pueblo, 36 F.3d at 1333-34, but it did not 

construe IGRA. 

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 
The Honorable Frank J. Corte Jr - Page 11 (GA-0278) 

recognized Indian tribes in states that pefmit only limited kinds of Class IlI 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. See United States v. 

Gomez, 911 F.2d 219,221 n.2 (9th Cir. 1990) (giving no special weight to Idaho Attorney General 

Opinion construing federal law).13 The Kickapoo Traditional Tribe of Texas is at present the only 

Texas tribe to which IGRA applies. Thus, it is the only Texas Indian tribe that may negotiate with 

the state about conducting Class III games. If any other Texas Indian tribes become subject to IGRA 

through federal recognition or congressional enactment, those tribes will also be able to negotiate 

about conducting Class III games, and the scope oftheirpermissible gaming activity will depend on 

the judicial construction of IGRA provisions authorizing Class IIl gaming. 

VI. Whether IGRA Bars the State from Receiving a Share of the Revenues from VLTs tin 

Indian Reservations 

You ask whether IGRA bars the state horn 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 ofregulating such activity.” 25 U.S.C. 3 271O(d)(3)(C)(iii) (2000). IGRA farther provides 

as follows: 

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 1988 before the Senate Comm. 

“Opinions of a state attorney general on state law questions are entitled to careful consideration by federal 

courts and are generally regarded as highly persuasive. See Harris County Comm ‘rs Cf. v. Moore, 420 U.S. 77,87 n. 10 

(1975). 
The Honorable Frank J. Corte Jr - Page 12 (GA-0278) 

on Indian Affairs, 108th Cong. (2003) (statement of Aurene M. Martin, Acting Assistant 

Secretary-Indian Affairs, Dept. of the Interior).‘4 The Interior Department stated its position to a 

Senate Committee in July 2003 as follows: 

To date, the Department has only approved revenue-sharingpayments 

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.” 

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 to 25 

“Availabk nf http:ilindian.senate.gov/2003~gs/O70903~~~.PDF 

15See also Letter from Honorable Neal A. McCaleb, Assistant Secretary, Indian Affairs, Department of the 

Interior, to Honorable B. Cheryl1 Smith, Tribal Chief, Jena Band of Choctaw Indians, at l-2 (Mar. 7,2002) (on file with 

Opinion Committee) (disapproving tribal-state compact because it required payments ofgamingrevenues to state without 

a state grant of exclusivity rights or other quantifiable economic benefit to the tribe). 
The Honorable Frank J. Corte Jr - Page 13 (GA-0278) 

USC. 5 2710(b)(2)(B)(i) and (ii)‘” and to make apportionments 

pursuant to subsection (f)(4)(B)(ii) of S. 1529,]i7 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 25 U.S.C. 5 2710). Because your questions 

relate to IGRA, we advise you to monitor Senate Bill 1529 and other amendments to IGRA that 

Congress may propose as well as any judicial decisions on this statute. 

?he cited provision pertains to apportionment of gaming revenues to the tribe. See 25 U.S.C. 5 2710@)(Z) 

(B)(i)-(ii) (2000). 

“The cited provision pertains to apportionment of gaming revenues in excess of those apportioned for tribal 

needs under a section ofthe proposed amendment allowing these excess revenues to be apportioned to local governments 

to the extent of actual costs incurred by affected local governments as a result of the gaming activities. See Indian 

Gaming Regulatory Act Amendments of 2003, S. 1529,10&h Cong. $2(f)(2)(B)(ii) (2003). 
The Honorable Frank J. Corte Jr - Page 14 (GA-0278) 

SUMMARY 

The Restoration Act does not authorize the AlabamaCoushatta and the Ysleta de1 Sur Pueblo tribes to operate VLTs on 

tribal land. 

Whether a federally recognized Texas Indian tribe may 

negotiate with Texas under the Indian Gaming Regulatory Act about 

only the specific Class Ill games allowed by Texas law, or whether it 

may negotiate about all Class Ill games is an open question in this 

state. 

A tribal-state compact for Class IlI 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. 

BARRY R. 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