- g;!j'r; NATIONAL ..... ,, :: ..... 

..... ::::. ..... 

:;;;i: . . .. INDIAN . . .. 

'.: GAMING 

ZOMMISSION 

. . , ' ;:; '. I 

I ;;.!?" 

steve 'M. ~lf la, .Eseu-ire 

245 South Hill Street 

P!O. BOX 70i .- 

5. -? : 

 lobe, Arizona 855'0-3. . . . .>. . .-a 

Dear Mr. ~fila: 

C 

By letter dated May 6, 1994, you advised Lisa' Hauser, ' Z'ormerly of 

the kizona Gaming omm mission,, that the San Carlos Apache Tribe 

yas interested in offer in^ a .class I1 card game called "Apache 

21." In turn, Mst ~aii'ser wroce to the Chairman of- the National 

1ndiSn Gaming ~omm~ssion (NIGC) on May 17, 1994, requesting that 

the NIGC determine whether "Apache 21" is a class I1 or class I11 

+me Under the Indian. Gaming Regulatory Act (IGRA) . We apologize 

far the delay in ow response. \ 

. . . . . 7. :,, . . . . ll~pache 2lW, like .l!A;'jzona 2lV1, is a player banked version of , 1 blackjack- (21);. . : 1h ptayer banked blackjack (21) , players are not 

playing against a' i\~use bank. They are, however, all playing . 

w - . . 

against a ~jla~ef;-ba'iik. ""The banker/player has the mathematical 

percentage advantage"'&$t the house would have in traditional 

blackjack. ~he'trib>rl: ca'sino does not participate. in, or have 

any interest .in, the outcome -of the game. The hous'e makes money 

by collecting anfante-Zrom each player per hand. A player takes 

oh. the role,. oft .baClker, collecting all. losses and paying all 

winnings. ..; ..: ,:. .::.;,: . *-: \ 

f. 

1nl.blackjack (213, as traditionally played, the gaming enterprise 

(hereinafter ,the., ~lhouse~) acts as the bank or banker. 

Apparently, .,the 'Tribe is of the view that if the house is no 

longer thg banker, the'game is a nonbanking card ga e and thus 

fills- within class I1 gaming. This argument is bas 1 deon an 

interpretation of the NIGC defiriition of lfclass I11 gaming" .read 

ii conjunction'with both the "house bankingu definition and the 

preamble to the; NIGC definition regulations. . . .- ! . . . ;J' 

All banking card games, including three which -are spec'ifically 

enumerated; are. excluded..from ... . . class I1 gaming in the IGRA.. 

~~ecifical1~- idektifi.ed -. card 'games are baccarat, ~hemin,,~..de f er, 

aqd blackjack (233. & 25,-U.S.C. 5 2703(7)(~)(i). ~accarat and 

blackjack (21) are-'hsuse banked card games, whereas chemin de fer 

; 7 a nl aver banked version of baccarat. .. ., 

.' _.. ,,I. 1:. 

%ud 
James. See 25 C.F.R. s 502.3 (c) . Class I11 games are defined as 

all games which are not class I or class I1 and includes house 

qe banked baccarat, chemin de fer, and blackjack (21) . 25 

C.F.R. S 502.4. 

Baccarat and chemin de fer are the games most often played for 

high stakes in the French casinos. See John Scarne, $carnets 

New Comwl.ete Guide to Gamblinq 459 (1986). "Regardless of where 

it is played and what it is called, baccarat is essentially the 

same simple card game. The major differences are in who deals 

the cards and who bets against whom." Albert H. Morehead, et al, 

The New Complete Hoyle 541 (1991). Baccarat is traditionally a 

house banked game as played in most major casinos in Europe, 

Latin America, Nevada, and New Jersey. Scarne at 459; Hoyle at 

541. The bank has an advantage of 1.34%. u.; Scarne at 473. A 

5% commission is extracted from winning bets to pay the house. 

- Id. at 542; Scarne at 473. The house deals. a. here are 

different versions of baccarat, of which chemin de ferzis one. 

Hoyle at 54.7. The rules and objectives are virtually the same as 

baccarat, with the exception that the right to bank -moves fmrn 

player to player. Scarne at 460; Hoyle at 547. Therefore, the 

advantage also moves from player to player. The house makes 

money by taking a 5% commission on the player banked winning ' 

hand. Scarne at ,560; Hoyle at 548. 

-- '. 

i~lackjack is a house banked game, and the house has a 

~onsiderable mathematical advantage of roughly 5.8%. Hoyle ai 

~ll#& 513; Scarne at 366. 

Banking card games are classified as class 111 in the IGRA. The 

IGRA states that "[tlhe term class I1 gaming does not include any 

banking card games, including baccarat, chemin de fer, or 

blackjack (21) , , ,It 25 U.S.C. S 2703 (7) (B) (i) . The term class 

111 gaming means "all forms of gaming'that are not class I gaming 

or class I1 gaming." 25 U.S.C. S 2703(8). 

By exkluding banking card games from class I1 gaming, the only 

card games Congress intended to fall within class 11 are 

nonbanking card games. As was previously discussed, chemin de 

f er .is' a player banked game, whereas baccarat and blackjack (21). 

are house banked games. Therefore, by enumerating these speci'fic 

card gameg, cbngress clearly intended to exclude both player and 

house banked games from class I1 gaming. 

Because the statutory language is clear and unambiguous, there is 

no need to look to the legislative history of the IGRA. united 

States v, Tavloy, 487 U.S, 326, 344-346 (1988). However, 

assuming. arsuendo that the IGRA is ambiguous, the legislative 

history does Aot support a definition of banking limited to house 

banking games: 

q,~ 111 /?.'he Senate Report on 5.555 explained the committee's. 
*hllq"#f 

understanding of nonbanking card games as follows: 

Section 4 (8) (A) (ii) provides that certain card games 

are regulated as class I1 games, with the rest set 

apart and defined as class I11 games under section 4(9) 

and regulated pursuant to section 11 (d) . The I 

distinction is between those games where players play 

against each other rather than the house and those 

games where players play against the house and.the 

house acts as banker. The former games, such as those 

conducted by the Cabazon Band of Mission Indians, are 

also referred to as non-banking games . . . . 

S. Rep. No. 446, 100th Cong. 2d Sess. 9 (1988). 

The above-quoted passage of the Senate Report focuses on what 

constitutes nonbanking card games and makes clear that only .- 

nonbanking card games fall within class I1 gaming. Thns, the 

Senate Report states: ftSection 4 (8) (A) (ii) provides thdt certain 

card games [nonbanking] are regulated as class I1 games, with the 

rest set apart and defined as class I11 sames. . . . a. (emphasis 

-. added). The reference to house banking games is illustrative \ ?>nly; it is an example of a category of banking card games that 

?fall within class I11 gaming. The senate Report neither stat& . nor sdggests that the example mentioned in the above-quoted h 

passage, h., card games where players are playing against tge 

house and the house acts as banker, is the only type of card 

games that constitute a banking game, 

A similar argument in the context of electronic facsimiles wa$ 

rejected by the court of appeals in Cabazon Band of Mission 

Indians v. National Indian ~amina omm mission, 14 F. 3d 633 (D. C. 

Cir. 1994) . There, the tribes argued that a passage in the 

Comqittee Report on the use of permissible communications 

technology in class I1 was intended to limit the meaning of 

electronic facsimile. "In other words, such technology would 

mere19 broaden the potential participation levels and is readily 

distinguishable from the use of electronic facsimiles in which a 

single participant plays a game with or against a machine rather 

than with or against other players." S. Rep. No. 446 at 9. The 

court of appe,al= rejected this argument stating: I 

ec 

But the Tribes are wrong to suppose that the example 

mentioned in this passage must be the only type of 

electronic copies Congress meant to include under 

S 2703 (7) (B) (ii) . The Report says nothing of the sort 

and neither does the statute. An illustration given in 

one sentence of a committee report scarcely excludes 

%J@ the possrbility of other examples. Still less does it, rather tAan the language of the statute, express the 

will of Congress. 
14 F-3d at 637. As in Cabazon, the will of Congress on the 

meaning of "banking" is expressed in the language of the statute 

which clearly includes both house and player banked card games. 

In the view of the committee, non-banking card games are games 

where players play against each other. The game of poker would 

be the typical example. It has been asserted that in player 

banked blackjack, players are playing against each other. This 

is simply wrong. In player banked blackjack, the ?layers are not 

playing against each other. They are playing against a banker 

who happens to be another player. This player banker has a 

percentage or odds advantage over all other players. This 

advantage is a fundamental characteristic of a banking game. 

Congress excluded from class I1 gaming banking card games and 

slot machines because'it believed such games required more 

stringent regulation. The Senate Report states that "[tlhe 

Committeefs intent in this instance is to acknowledge t&e 

important difference in regulation that [banking card]-.>ames apd 

machines require and to acknowledge that a tribal-~tatecdmpact 

for regulation of such games is preferable to Commission 

regulation." S. Rep. No. 446 at 10.. 

- The tribes offering player banked card games find support for; 

) their 'argument that such games fall within class I1 gaming inithe .: 

regulations of the NIGc. Although unintended, the NIGC 

.definitions of 'class 11 gaming" and Ithouse banking" as they j 

pertain to card games may 6e confusing and misleading. 

"House banking" is defined in the NIGC regulations to mean "any 

game of chance that is played with the house as a participant in 

the game, where the house takes on all players, collects from all 

losers, and pays all winners, and the house can win." 25 C.F.R. 

S 502.11. The NIGC believed that definition adopted the commonly 

understood format for playing a banking card game. The NIGC 

simply did'not envision the playing of blackjack in a player 

banked format. Moreover, at that time, the NIGC was not aware 

that chemin de fer is a player banked version of baccarat. Thus, 

the'"house banking gameu definition erroneously suggests that 

player banked card games are not banking games. 

i 

The NIGC defihltion of "class 111 gaming" compounds the 

confusion. The NIGCts definition of class I11 gaming'reads in 

pertinent part: 

all forms of gaming that are not class I gaming or 

class I1 gaming, including but not limited to (a) any 

house banking game, including but not limited to (1) 

card games such as baccarat, chemin de fer, blackjack 

(21), and psi gow (if played as house banking games). . . %d 

25 C. F.R. § 502.4. The parenthetical incorrect1.y suggests that 
*d 

the enumerated games fall outside of class I11 gaming if played 

in a non-house banking format. Even if intentional, the NIGC, of 

course, cannot by regulation include games within class I1 that 

IGRA specifically excludes from class I1 gaming. The NIGC -. 

intends to propose amendments to the definition regulations to 

clarify the regulations consistent with the intent o< Congress 

with respect to banking games. 

Thank you for your interest in this matter. If you have any 

questions, please do not hesitate to contact Michael Cox, General 

Counsel, at (202) 632-7003. 

Sincerely, 

__- - .-._ 

& Harold - * 

chairman 

-. 

jcc: San Carlos Apache Tribal Gaming Commission r Arizona state ~arning om mission