Scott Crowell 

Crowell Law Offices 

1670 Tenth Street West 

Kirkland, WA 98033 

Re: Shoalwater Bay Indian Tribe's Application for Grandfathered Blackjack 

Dear Mr. Crowell: 

The Shoalwater Bay Indian Tribe ("Tribe"), located in the State of Washington, has requested 

a determination by the Chairman of the National Indian Gaming Commission ("NIGC"), that the 

house banked blackjack games it alleges were operated by the Tribe prior to May 1, 1988, be 

considered class I1 games pursuant to 25 U.S.C. tj 2703(7)(C). In support of its request, the Tribe 

provided me with various letter briefs, including witness statements and declarations. Additionally, 

I held a fact finding hearing on April 23, 1998, on the Shoalwater Bay Indian Reservation, at which 

a number of witnesses provided testimony. After carehl review of the record, I have determined that 

the Tribe was not operating the game of blackjack, on or before May 1, 1988, and accordingly, is not 

entitled to operate blackjack as a class I1 game pursuant to IGRA's grandfather clause. 

11 I tq@,~ Indian Gaming Regulatory Act 

IGRA creates three classes of gaming which differ in the degree of tribal, state, and federal 

oversight. Class I gaming consists of "social games [played] solely for prizes of minimal value or 

traditional forms of Indian gaming engaged in by individuals as part of, or in connection with, tribal 

ceremonies or celebrations." 25 U.S.C. 5 2703(6). Class I1 gaming includes bingo, related activities, 

and certain non-banlung card games. Id 5 2703(7)(A). IGRA specifically excludes blackjack fiom 

classification as a class I1 game. Id. 5 2703(7)(B). Class ID gaming is defined as "all forms of 

gaming that are not class I gaming or class I1 gaming." Id. 5 2703(8). IGRA requires that the 

operation of class III games be "conducted in conformance with a Tribal-State compact entered into 

by the Indian tribe and the State." Id. 5 2710(d)(l)(C). No such Tribal-State compact is required 

for the operation of class I1 games. 

Grandfather Clause 

IGRA provides that in some instances blackjack may be considered a class I1 game, and not 

subject to a Tribal-State compact. A grandfather clause in Section 2703(7)(C) applies to card games 

operated by an Indian tribe in certain states, including the State of Washington, on or before May 1, 

1988. The grandfather clause provides: 

Notwithstanding any other provision of this paragraph, the term "class I1 gaming" 

includes those card games played in the State of Michigan, the State of North Dakota, 

'Ill-lV 

1441 L SIREET, N.W. BM ROOR WASHINOTON, D.C. 20005 TEL: 202-632-700(3 FAX: 202-632-7066 
the State of South Dakota, or the State of Washington, that were actually operated 

in such State by an Indian tribe on or before May 1, 1988, but only to the extent of 

the nature and scope of the card games that were actually operated by an Indian tribe 

in such State on or before such date, as determined by the Chairman. 

Id 5 2703(C) (emphasis added). Thus, according to IGRq there are two statutory requirements that 

must be satisfied for a house banked card game to qualify as a class I1 game: (I) the card game must 

have been "actually operated prior to May 1, 1988; and (2) the card game must have been operated 

by "an Indian Tribe." Both of these requirements will be addressed below. 

The Games Must Have Been Actually Operated On Or Before May 1. 1988 

The Tribe provided the NIGC with various documents, including witness statements and 

declarations, in support of its application for grandfathered blackjack. Additionally, a fact finding 

hearing was held on April 23, 1998, at the Shoalwater Bay Indian Reservation, at which a number 

of witnesses provided testimony. Based upon my review of the matters submitted, I have determined 

that the record supports the Tribe's contention that house banked blackjack games were operated by 

individual operators on Tribal lands, on or before May 1, 1988. Thus, the first requirement of the 

grandfather clause - the "actual operation" of blackjack prior to May 1, 1988 - has been satisfied. 

The Games Must Have Been Actuallv Operated By An Indian Tribe 

The Tribe argues that the operation of blackjack by individual tribal members suffices to meet 

~~lH& the statutory requirement of having been "actually operated by an Indian tribe." The Tribe hrther 

contends that tribal regulation of individually operated games is the equivalent of having the Tribe 

operate the game. However, the Tribe's contentions are not supported by IGRA or its legislative 

history. 

The plain language of the grandfather provision states that it applies only to those house 

banked card games "actually operated" by an "Indian tribe" on or before May 1, 1988. See Reiter 

v. Sonotone Corp., 442 U.S. 330, 337 (1 979) (the starting point in cases involving statutory 

interpretation is the language employed by Congress); see also Consumer Product Safety Comm'n 

v. GTE Sylvania, Inc., 447 U. S. 102, 108 (1 980) (in the absence of a clearly expressed legislative 

intent to the contrary, the plain language must ordinarily be regarded as conclusive). I believe the 

plain language is conclusive that for blackjack to be grandfathered as a class I1 game, it must have 

been operated by an Indian tribe. 

Notwithstanding the plain language of the statute, an examination of the legislative history 

also sheds light on the intent of Congress in enacting the grandfather clause. The grandfather clause's 

requirement of "actual operation by an Indian tribe" was addressed in the legislative history numerous 

times. In the Senate Report, the Committee stated that "card games actually operated by tribes in 

certain states on or before May 1, 1988, will continue to operate under tribal/Commission jurisdiction 

as class I1 games . . . . " S. Rep. No. 446, 100th Cong. 2d Sess. 10 (1988) reprinted in 1988 

U.S.C.C. A. A.N. 307 1 (emphasis added). Additionally, the Committee stated: 

To come within the grandfather clause, the Committee intends to include all games 
in which an investment is made and the games were actually operated on or before 

May 1, 1988. Games are often closed temporarily for a variety of reasons such as 

contract disputes, renovations, and collateral legal disputes, among others. Such 

closures are not meant to preclude a tribe 's game from being included in this section. 

S. Rep. No. 446, p.10 (emphasis added). A colloquy between Senator Reid and Senator Inouye 

provides further evidence of the requirement of "actual operation by an Indian tribe": 

Mr. Reid. It has been this Senator's understanding that this provision was adopted 

to protect tribes with existing investments in such games from hardships associated 

with changes in the law brought about by this legislation. This Senator also 

understands that the committee intended that the grandfather clause should not serve 

as the basis for expansion of existing gaming operations to new locations not in 

operation as of May 1, 1988. Would the chairman confirm that this provision does 

not provide authority for the establishment of new banking card game operations or 

the institution of new games in existing operations? 

Mr. Inouye. The Senator is correct. The grandfather clause is intended merely to 

protect tribesfrom hardshp due to this change in the law. While the bill may permit 

the expansion of particular operations which were in existence as of May 1, 1988, for 

example, by the addition of garning tables or seats in an existing establishment, it does 

not authorize the expansion of such operations to new locations, the establishment of 

new operations, or the institution of new games at existing operations. In other 

words, both the gambling operation and the particular games played in that operation 

must have been in place on or before May 1, 1988 in order to have the benefit of this 

provision. 

134 Cong. Rec. S 12,643-01 (daily ed. Sept. 15, 1988) (emphasis added). 

The Tribe further contends that the Order Granting Plaintzfl's Motion For Preliminary 

Injunction in a case involving the Spokane Tribe of Indians, supports its contention that the operation 

of blackjack by individual tribal members suffices to satis@ the grandfather clause. The Tribe relies 

on the following language from the Order: 

The U.S. questions whether certain card games conducted by the Tribe qualie for 

exemption under the IGRA grand-father clause. Apparently, individual Tribe 

members have operated the pre-1988 games under a licensing arrangement with the 

Tribe. The legislative history of IGRA addresses this issue, and concludes that 

"individually owned class I1 games licensed by tribes will also be grandfathered." 

S.Rep. 100-446, 1988 U.S.C.C.A.N. at 3077. . . . This injunction does not apply to 

enjoin those house-bank card games actually operated by the Spokane Tribe of 

Indians on or before May 1, 1988, and defined as class I1 gaming under 25 U. S.C. 5 

2703(7)(C), including individually owned card games licensed by the Tribe. 

United States vs. Spokane Tribe of Ind~ans, No CS-94- 104-FVS (E.D. WA. May 20, 1994) (order 

TI II~,~~~I~~ granting plaintiffs motion for preliminary injunction) (emphasis added) However, the Tribe's 
argument fails here as well because the Tribe did not provide any evidence which showed that the 

Tribe licensed any blackjack operations to individual Tribal members on the Shoalwater Bay Indian 

W~I~ reservation on or before May I, 1988 ' 

Additionally, the Tribe argues that blackjack was "actually operated" by the Tribe through 

the licensing, regulation and taxation of individual tribal entrepreneurs. As stated above, no evidence 

was presented to support the Tribe's position that it licensed the blackjack games. Additionally, the 

Tribe did not provide any evidence establishing the collection of taxes. Although the Tribe had a 

gaming code in place prior to May 1, 1988, the Tribe did not provide evidence establishing that these 

individually owned operations conducted blackjack in compliance with Tribal law or with any Tribal 

regulatory oversight. 

My conclusion is that the blackjack games were not operated by the Tribe, either directly or 

indirectly, through its licensing and regulation of the individually operated establishments. As a result, 

the Tribe has not satisfied the second requirement of the grandfather clause, namely, actual operation 

by "an Indian Tribe." 

Statewide Application Of The Grandfather Clause 

As an alternative argument, the Tribe requests a determination by the Chairman that 

grandfathered card games be authorized on a "statewide" basis pursuant to 25 U.S.C. 5 2703(7)(C), 

as house banked blackjack was played on or before May 1, 1988 by other Indian Tribes in the State 

of Washington. However, such a construction runs contrary to the policy of the grandfather clause 

and clearly expressed legislative intent. ld 

The statute and Senate Report 446 refer to Section 2703(7)(C) as a "grandfather clause." A 

grandfather clause is defined as a "[pJrovision in a new law or regulation exempting those already in 

or a part of the existing system which is being regulated. An exception to a restriction that allows 

all those already doing something to continue doing it even if they would be stopped by the new 

restriction." Black's Law Dictionary 699, (6th ed. 1990). 

The grandfather provision classifies as class 11 games, all "card games played in the . . . State 

of Washington that were actual4 operated in such State by an Indian tribe on or before May 1, 1988 

. . . ." 25 U.S.C. 5 2703(7)(C) (emphasis added). The Tribe argues that the term "an Indian tribe" 

is unambiguous and was intended to mean "any Indian tribe." As such, the Tribe believes that a 

blackjack game grandfathered to any tribe in the State of Washington allows all tribes to operate 

grandfathered blackjack. 

I believe the statute is clear that the card games must have been operated by the Tribe seeking 

to have its card games grandfathered. In fact, if Congress had intended the provision to apply to any 

tribe, it could have simply said so. Additionally, the legislative history supports my construction of 

1 I note that it is arguable whether Section 2703(7)(C) serves to grandfather individually 

owned card games licensed by the Tribe, as the Spokane Court so held 

*I-f 
the statute. 

The Congressional Record provides that the grandfather clause is intended "merely to protect 

tribes with existing operations from hardship due to this change in the law." 134 Cong. Rec. 

S12,643-01 (daily ed. Sept. 15, 1988) (emphasis added). IGRA requires that "both the gambling 

operation and the particular games played in that operation must have been in place on or before May 

1, 1988, in order to have the benefit of this provision." 134 Cong. Rec. S12,643-01 (daily ed. Sept. 

15, 1988). Also, the Senate Report specifically refers to the grandfathering of the Lummi Tribe's 

gaming operation: "the Committee specifically intends that the card room operated by the Lummi 

tribe in Washington State be included in this grandfather provision." See S. Rep. No. 446, p. 10. If 

Congress intended for the grandfather clause to have statewide application, there would have been 

no reason to single out the Lurnmi Tribe's card room for mention in the Senate Report, as Congress 

would have grandfathered "all" card rooms within the State of Washington simultaneously. 

Determination 

I commend the Tribe for presenting compelling equitable reasons in support of its application 

for grandfathered blackjack. However, I have been unable to find a sufficient legal or factual basis 

for concluding that these card games were actually operated by the Tribe on or before May 1, 1988, 

as required by IGRA. After carehl review and consideration, I have determined that the Tribe may 

not offer blackjack as class I1 games pursuant to the grandfather provision contained in 25 U. S . C. $ 

2703(7)(C). 

Sincerely yours, flcF 

Tadd Johnson 

Chairman 

cc: Ben Bishop, Executive Director, State of Washington Gambling Commission 

Jonathon T. McCoy, Assistant Attorney General, State of Washington 

Katrina C. Pflaumer, United States Attorney, Western District of Washington 

Kevin DiGregory, Deputy Assistant Attorney General, Criminal Division, United States 

Department of Justice 

Jim Simon, Deputy Assistant Attorney General, Environmental and Natural Resources 

Section, United States Department of Justice