Opinion ID: 784592
Heading Depth: 2
Heading Rank: 2

Heading: California's Regulation of Indian Gaming Under IGRA

Text: 14 After the enactment of IGRA, certain Indian tribes in California sought to negotiate compacts with the State to permit the operation of class III gaming on their reservations. The class III games over which the tribes sought to negotiate — live banked or percentage card games and stand-alone electronic gaming machines (similar to slot machines) — were not permitted under California law. See Cal.Penal Code §§ 330, 330a, 330b. However, California did allow other forms of class III gaming, such as nonelectronic keno and lotto. Rumsey Indian Rancheria of Wintun Indians v. Wilson, 64 F.3d 1250, 1255 n. 1 (9th Cir.1994). 15 During the administration of Governor Pete Wilson, California refused to negotiate with tribes with respect to the forms of gaming that they sought to conduct. Because the State did not permit live banked or percentage card games or slot machine-like devices, it took the view that it had no obligation to negotiate with respect to those games or devices. The tribes argued that, because the State permitted other types of class III games, it could not refuse to negotiate over a particular subset of class III games. See Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024, 1030 (2d Cir.1990) (agreeing with the tribe's position). In Rumsey, this court rejected the tribes' view, holding that 16 IGRA does not require a state to negotiate over one form of Class III gaming activity simply because it has legalized another, albeit similar form of gaming. Instead, the statute says only that, if a state allows a gaming activity for any purpose by any person, organization, or entity, then it also must allow Indian tribes to engage in that same activity. 25 U.S.C. § 2710(d)(1)(B). In other words, a state need only allow Indian tribes to operate games that others can operate, but need not give tribes what others cannot have. 17 64 F.3d at 1258. 18 The Rumsey decision meant that the State of California had no obligation under federal law to negotiate with the tribes over the class III gaming that the tribes wanted to operate. The tribes thus resorted to California's initiative process to impose a state-law obligation on California to negotiate class III gaming compacts. A coalition of California tribes drafted Proposition 5, which required the State to enter into a model class III gaming compact covering banked card games and slot machines. The Proposition required the Governor to execute compacts within 30 days after any federally recognized Indian tribe requested such an arrangement. If the Governor took no action within 30 days, the compacts were deemed approved. Flynt v. Cal. Gambling Control Comm'n, 104 Cal.App.4th 1125, 129 Cal.Rptr.2d 167, 176 (2002), cert. denied, ___ U.S. ___, 124 S.Ct. 398, 157 L.Ed.2d 278 (2003); Cal. Gov't Code §§ 98000-98012. Proposition 5 also contained a provision waiving California's sovereign immunity to suits brought under IGRA. See id. § 98005. 19 After the passage of Proposition 5 on the November 1998 ballot, the Hotel Employees and Restaurant Employees International Union filed a petition for a writ of mandate in the California Supreme Court, seeking to prevent the Governor from implementing the Proposition. The union alleged that Proposition 5 violated Article VI, Section 19(e) of the California Constitution, which states that the Legislature has no power to authorize, and shall prohibit casinos of the type currently operating in Nevada and New Jersey. The California Supreme Court agreed with the union and issued a peremptory writ of mandate, preventing the Governor from implementing Proposition 5. Hotel Employees & Rest. Employees Int'l Union v. Davis, 21 Cal.4th 585, 88 Cal.Rptr.2d 56, 981 P.2d 990, 1011 (1999). 20 Before the California Supreme Court ruled in Hotel Employees, Governor Gray Davis took office and sought to negotiate class III gaming compacts with several Indian tribes in California. However, once the California Supreme Court issued its ruling, the State no longer had authority to execute the compacts. To address this problem, the Davis administration proposed an amendment to the California Constitution that would exempt Indian tribes from the State's constitutional prohibition on class III gaming. The Davis administration and various Indian tribes continued to negotiate Tribal-State Compacts, adding a provision that conditioned execution of the compacts on ratification of the proposed state constitutional amendment. In September of 1999, the Governor concluded 57 compacts with Indian tribes. The California legislature quickly ratified all 57 compacts. Artichoke Joe's, 216 F.Supp.2d at 1096. 21 In March of 2000, California voters ratified Proposition 1A, amending the California Constitution to provide: 22 Notwithstanding subdivisions (a) and (e), and any other provision of state law, the Governor is authorized to negotiate and conclude compacts, subject to ratification by the Legislature, for the operation of slot machines and for the conduct of lottery games and banking and percentage card games by federally recognized Indian tribes on Indian lands in California in accordance with federal law. Accordingly, slot machines, lottery games, and banking and percentage card games are hereby permitted to be conducted and operated on tribal lands subject to those compacts. 23 Cal. Const. art. IV, § 19(f). Shortly after the ratification of Proposition 1A, the Assistant Secretary of Indian Affairs approved the compacts on behalf of the Secretary of the Interior (Secretary). He concluded that [t]he Governor can, consistent with the State's amended Constitution, conclude a compact giving an Indian tribe, along with other California Indian tribes, the exclusive right to conduct certain types of Class III gaming. Upon this approval, the Tribal-State Compacts went into effect. 24 The compacts create a unique opportunity for[each] Tribe to operate its Gaming Facility in an economic environment free of competition from the Class III gaming... on non-Indian lands in California. Tribal-State Compact Between the State of California and the Augustine Band of Mission Indians (Mar. 15, 2000), pmbl. E. The compacts condition the operation of class III gaming facilities on tribes' agreeing to certain revenue-sharing arrangements and paying into a Special Distribution Fund, which is used by certain state agencies to cover expenses related to Indian gaming. Since the original 57 compacts took effect, 5 additional compacts have been entered into by the Governor and approved by the Secretary. Artichoke Joe's, 216 F.Supp.2d at 1096. At present, 39 of the 62 tribes with compacts operate casinos with slot machines. Casinos have become the main source of revenue for Indian tribes in California. Some 44 California tribes are still without compacts, however. Id.