April 29,2003 

Jamie Hummingbird, Director 

Cherokee Nation Gaming Commission 

P.P Box 627 

Tahlequah, Oklahoma 74465.0627 

RE: Tournament Blackjack 

Dear Mr. Hummingbird: 

By letter dated March 27,2003, received at the National Indian Gaming Commission (NIGC) on 

April 1,2003, you provided a proposed format for tournament blackjack for our review and 

comment. Your subsequent letter of April 3,2003, indicated that the Cherokee Nation Gaming 

Commission authorized the play of the format, referred to as "Break the Bank 21 ," and that 

implementation would begin effective April 5,2003, provided that Cherokee Nation Gaming 

Commission had not received i3 written directive from the NIGC to the contrary. On April 4, 

2003, we requested that the Nation not commence tournament blackjack in the proposed format 

pending further review. We made this request because we had serious concerns about whether 

"Break the Bank 21" was a bona fide tournament format. 

We have now completed our review of the proposed format. We conclude that the proposed 

blackjack tournament format known as "Break the Bank 21 ," as described in your letter, should 

not be considered a Class 11 gzming activity. Accordingly, we request the Nation's gaming 

facilities not offer blackjack play in this format. 

Description of "Break the Banlm 

The proposal calls for "qualifjmg" tournaments at five different tiers. Each tier has different entry 

fee ranging from $5 to $200. Each tier is independent of the other tiers. Each qualifying tournament 

will be played with four to seven players. A minimum of four players is required for a tournament 

to begin at any tier level. After paying the entry fee, a player receives tournament point-value 

chips. The chips do not have redeemable cash value. All players start with an equal number of 

chips. Each tournament consists of three hands of blackjack using traditional blackjack rules. 

Players also pay a small "administrative fee," equivalent to an "ante," which the house retains. 

At the end of each three-hand tournament, the player with the most point-value chips wins the 

tournament and is awarded a p~ize of money. Cash prizes are also awarded to the second and third 

place finishers. Although styled as "pre-determined," the prize will vary in any particular 

tournament based on the number of players in that tournament. There is a pay-table for the first, 

second, and third place finishers in the tournament showing the prizes based on the entry fee and 

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: Jamie Hummingbird 

April 29,2003 

Page 2 of 2 

the number of players at the table. After the cash prizes are awarded, all player chips for that 

tournament lose their value, ca&ot be redeemed, and cannot be carried forward into a later 

tournament. 

There is an alternative prize award approach for the tournament known as "Break the Bank" that 

is the focus of the game and which overrides the regular prize schedule. The "Break the Bank" 

prize is achieved by obtaining a certain level of point-value chips. The first player to achieve 

those points wins the entire pool of entry fees accumulated for that tournament. In order to obtain 

the point-value chips necessary for the prize, the player must place a maximum bet on the first 

two hands, win the first two hands, bet a amount in the third hand necessary to achieve the 

necessary point value, and win1 that hand as well. The player can also reach the necessary point 

level by obtaining blackjack after a maximum bet on the first two hands and by winning in other 

combinations that involve doubling down. 

In addition to a monetary prize, the first and second place finisher each receive "tournament 

points" that are used for qualification in the Championship Tournament that is held periodically. 

As understood, play in the Chsunpionship Tournament may involve several elimination rounds 

until a winner is determined. 'l%e description as to how players qualify for the Championship 

Tournament is not complete and it is not clear if the players fiom the various entry fee tiers will 

compete in the same Championship Tournament or in different champion-ship tournaments, 

assuming eligibility is obtained based on the "tournament points" obtained. 

Requirements for Blackjack Tournament Play 

The legal basis for concluding that tournament blackjack play constitutes Class I1 gaming in 

Oklahoma was set forth in advisory opinions fiom the NIGC's Office of General Counsel in 

letters dated July 9, 1999, and January 15,2003. Each letter stressed the importance of bona fide 

tournament play as a condition to invoking an exception, established in Oklahoma law, to the 

general prohibition of gambling card games. 

Two concerns prompt our conclusion that the tournament format for the "qualifying" tournament 

in "Break the Bank 21" will not be a Class 11 gaming activity: (1) the insufficient number of hands 

that are played, and (2) the design of the prize structure. 

A. Insufficient number of hat& 

Because "tournament" is not defined in IGRA, in regulations of the NIGC, or in statutes of the 

State of Oklahoma, we rely on a common usage definition of the term. A "tournament" is 

defined as a "a contest involvi~ng a number of competitors who vie against each other in a series 

of elimination games or trials." (Webster's 11 New College Dictionary, 1995.) 
Jamie Hummingbird 

April 29,2003 

Page 3 of 3 

As noted in the advisory opinion letter of July 9,1999, regarding the play of tournament blackjack 

in Oklahoma, all card games ilnvolve both an element of chance and an element of skill. Some card 

games involve significant skill. The extent to which the outcome of card games is determined by the 

players' skill varies, but it should be greater in a tournament format where a number of hands will 

be played before prizes are determined. To come within the "tournament exception" to the gambling 

prohibitions established in Oklahoma law, and so that play will be something other than Class III, 

blackjack card tournaments must not only not be banked, they must also contain a skill aspect in 

which a winner emerges by elimination over a number of hands by demonstrating skill during play. 

Until such time as the Commission establishes a different number by formal rule, we are taking the 

position that the play of 10 hands is the minimum number to make a single round of tournament 

play a "series" that would allow a demonstration of player abilities envisioned by tournament play. 

B. The design of the prize slructure 

In the described format, prize!; are awarded based on which player accumulates the most pointvalue chips during play and the prize does not vary based on the number of point-value chips in 

the player's possession at the end of play. These are favorable features to bona fide tournament 

play. However, the monetary prize does vary based on the number of players at the table. The 

winning prize is directly related to the number ofplayers and the entry fees received. Fixed 

consolation prizes are awarded to the second and third place finishers unless a player "Breaks the 

Bank" in which case the second and third place finishers do not receive a prize. 

As an example, in the $10 tou~rnamenthe house pays out all entry fees in the pot to the first three 

finishers except for $3 which the house retains. (The $3 hold is not applied if a player wins in the 

"Break the Bank" method.) ?he amount of the winning prize increases directly in proportion to 

the number of players entered and on the entry fee each additional player has paid. In effect, the 

house is not paying a fixed prize but is paying a variable prize to the winner directly based on the 

total monies collected, or ''belt," by the players at a table for the play of three hands. The close and 

direct relationship between the pot of entry fees collected and the prize awarded in any particular 

three-hand tournament is even more pronounced when a player achieves the points necessary to 

"Break the Bank" and is awarded the entire pot of entry fees paid by players. Play under either 

prize-award mechanism is tantamount to a "money hunt." In a "money hunt," players place equal 

wagers in a pot and the pot is paid to the winner of the contest. The result may be determined 

entirely by chance or by somt: combination of skill and chance. "Money hunts" are gambling 

under Oklahoma law, and no1 considered to be within the statutory "tournament" exception 

discussed in our letters of July 9, 1999, and January 15,2003.' 

' See Oklahoma Attorney General Opinion 99-5 dated March 29,1999 participants' entry fees held as a pool to be 

paid to the winner as a prize caused "money hunts" to be considered gambling. However, as a general matter, when 

a person or association sponsors or conducts contests for "purses, prizes, or premiums," and the moneys paid to such 

person or association for the right of participation become part of the person or association's general assets, and the 

"purses, prizes, or premium$' are plaid out to contestants without regard to such contributions, such activities will not 

be considered a '%et."] 
Jamie Hummingbird 

April 29,2003 

Page 4 of 4 

As our advisory opinion of Jully 9, 1999, indicated, when card tournaments were first proposed, it 

was made clear by the tribes that the prize to be awarded would be established independently of 

the pool of entry fees and tournament participants would not be trying to win money fiom one 

another but would be competi~ng instead to win the prizes offered by the tribe. The prize structure 

for "Break the Bank 21" departs fiom this premise. 

That being said, distinguishing the prize structure fiom a "money hunt" is potentially an issue in 

any blackjack tournament. Tk~e reality is that tournament sponsors routinely collect money fiom 

entry fees and, sooner or later,, use a portion of money so collected to fund prizes. Money collected 

in this manner is income to the business, the prize an expense of the business. Thus, in some sense, 

the tournament participants are always competing for a prize that is the result of their entry fees. 

To distinguish the prize awarded in a blackjack tournament, the prize must be pre-established and 

fixed in the sense that it cannot vary based on the number of participants. Tournament blackjack 

players cannot simply pool their entry fees, with the winner taking the pot. The fixed prize creates 

a clear break between the payment of entry fees and the prize, avoiding the "money hunt" problem. 

If, for marketing purposes, a tribe advertises tournaments in a manner that identifies that portion 

of the entry fee that will be expended for prizes, as opposed to the portion of an entry fee that will 

be retained for administration and profit by the gaming operation, the actual character of the game 

does not change. Thus, if a tribe decides it will use 90% of entry fees to pay for prizes and 10% 

for administration, it can advertise for example, "an entry fee of $1 11 of which 90% will be used 

to fund prizes" or "an entry fee of $100 and an administrative fee of $1 1 ." Because the prize has 

been predetermined, the players are not competing against each other for the pooled entry fees, 

and they are not engaged in betting against one another. 

Thank you for providing the proposed tournament format for our review. The Office of General 

Counsel remains available for further discussions on this matter at your convenience. 

Sincerely yours, 

Penny J. Coleman 

Acting General Counsel