Opinion ID: 1841302
Heading Depth: 3
Heading Rank: 4

Heading: Expansion of Permissible Class III Gaming

Text: ¶ 83. Under the 2003 amendments, the Governor agreed to several new Class III games such as keno, roulette, craps, and poker. The petitioners assert that the Governor lacked the authority to agree to new games that are expressly prohibited to the Wisconsin Lottery by the 1993 constitutional amendment to Article IV, Section 24. ¶ 84. Originally, petitioners argued that the Governor, acting alone under § 14.035, could not agree to the expansion of games in the FCP Gaming Compact. This was a traditional separation of powers argument. They expressly declined to take a position on whether the legislature alone, or acting in concert with the Governor, could have agreed to games prohibited to the Wisconsin Lottery under the 1993 constitutional amendment. Although we understand that petitioners did not want to constrain the legislature vis-à-vis future gaming negotiations in which it might participate, petitioners' reluctance to take a position prompted us to request additional briefs on the question whether Article IV, Section 24 made certain games uncompactable as a matter of Wisconsin law, thereby prohibiting any Wisconsin actor from agreeing to such games in an Indian gaming compact. Petitioners now concede that Article IV, Section 24 acts as a limitation on both the legislature and the governor, so that if one is prohibited by the provision, so is the other. ¶ 85. The Governor makes this same concession, stating [I]f the Constitution prohibits the state from entering into compacts allowing certain games, it matters not whether the compact is approved by the executive branch or the legislative branchor both, acting together. No branch of government may violate the Constitution. ¶ 86. The text of the constitution is absolutely clear: Except as provided in this section, the legislature may not authorize gambling in any form. Wis. Const. art. IV, § 24 (emphasis added). Nothing in section 24 authorizes electronic keno, roulette, craps, and poker. These games are specifically denied to the Wisconsin Lottery. Wis. Const. art. IV, § 24(6)(c). [34] ¶ 87. Nonetheless, the Governor believes that Article IV, Section 24 does not prevent the state from entering into a compact for additional types of games. [35] He contends that state law is not the last word on permissible Class III gaming. State law, he argues, exerts only an indirect influence on Indian gaming, that being the games the state is required to negotiate. As we understand the Governor's position, he believes Congress has empowered states to agree to games beyond the games the state is required to negotiate. ¶ 88. In American Greyhound, a United States District Court concluded that IGRA does not permit a state to enter into compacts authorizing tribes to engage in gaming otherwise prohibited by state law. 146 F. Supp. 2d at 1067-68. Although this decision was subsequently vacated by the Ninth Circuit on other grounds, 305 F.3d 1015 (9th Cir. 2002), its analysis is persuasive. The court said: The court reads the [Arizona governor's] brief to assert that IGRA should be understood to require, at a minimum, a compact permitting tribes to engage in any class III gaming the State permits for any person for any purpose. The minimum idea is crucial. The Plaintiffs, on the other hand, maintain that IGRA prohibits gaming under tribal-state compacts if such gaming is not permitted under state law. The Plaintiffs argue that Congress did not intend to create jurisdictional islands where community normsas expressed in state laware not enforced. The court conceives this question as whether IGRA establishes a ceiling for compact terms, or a floor. That is, whether IGRA permits states to offer only such games that are legal for any person for any purpose (a ceiling), or whether IGRA requires states to offer tribes terms equal to those granted their own citizens, plus allows states to agree to any additional gaming (a floor). For the reasons that follow, the court believes a ceiling view is mandated. 146 F. Supp. 2d at 1067 (record citations and footnote omitted). ¶ 89. The court discussed the structure of IGRA, then stated: According to the structure of § 2710(d)(1) and its plain terms, a compact cannot make legal class III gaming not otherwise permitted by state law. The State must first legalize a game, even if only for tribes, before it can become a compact term. Id. (emphasis added). Other courts have come to similar conclusions. See United States v. Santee Sioux Tribe of Nebraska, 135 F.3d 558, 564 (8th Cir. 1998); Citizen Band Potawatomi Indian Tribe v. Green, 995 F.2d 179, 181 (10th Cir. 1993); United States v. Santa Ynez Band of Chumash Mission Indians of the Santa Ynez Reservation, 33 F. Supp. 2d 862 (C.D. Cal. 1998)); Hotel Employees and Restaurant Employees International Union v. Davis, 981 P.2d 990 (Cal. 1999). ¶ 90. This conclusion is consistent with the 1990 opinion of Attorney General Hanaway, who opined that the Wisconsin constitution, in 1990, permitted the legislature to approve casino-type gambling just within Indian country. Of course, any legislative authority the legislature had in 1990 was sharply curtailed by the 1993 amendment. ¶ 91. Neither the ceiling view nor the floor view of IGRA authorizes any state actor to create a monopoly for Indian tribes by superseding, disregarding, or violating fundamental state law. The only obligation that states have under IGRA springs from 25 U.S.C. § 2710(d)(1)(B), which is the same provision setting forth the scope of lawful gaming activity on Indian lands. Section 2710(d)(1)(B) provides that [c]lass III gaming activities shall be lawful on Indian lands only if such activities are [among other requirements] (B) located in a State that permits such gaming for any purpose by any person, organization, or entity Id. (emphasis added). Thus, under IGRA, there are in essence two categories of Class III games: those over which a state must negotiate with a tribe and those that are illegal to negotiate. Those games over which a state must negotiate are games permitted for any purpose by any person, organization, or entity, including games permitted, by law, exclusively for tribes. ¶ 92. Thus, regardless of how one frames the question, the ultimate inquiry focuses on the permits such gaming language in 25 U.S.C. § 2710(d)(1)(B). Until very recently, the Lac du Flambeau case was the only case concluding that, once a state regulates one form of Class III gaming, the state must negotiate over all forms of Class III gaming. [36] Compare Lac du Flambeau, 770 F. Supp. at 486 with Rumsey Indian Rancheria of Wintun Indians v. Wilson, 41 F.3d 421, 427 (9th Cir. 1994), amended, 64 F.3d 1250 (9th Cir. 1995) and 99 F.3d 321 (9th cir. 1996) (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.); Cheyenne River Sioux Tribe v. South Dakota, 3 F.3d 273, 279 (8th Cir. 1993) (The `such gaming' language of 25 U.S.C. § 2710(d)(1)(B) does not require the state to negotiate with respect to forms of gaming it does not presently permit. Because video keno and traditional keno are not the same and video keno is the only form of keno allowed under state law, it would be illegal, in addition to being unfair to the other tribes, for the tribe to offer traditional keno to its patrons.); Hull, 146 F. Supp. at 1067, vacated on other grounds, 305 F.3d 1015, 1018 (9th Cir. 2002) (holding that compact cannot authorize forms of gaming not otherwise legal in state); Coeur d'Alene Tribe v. Idaho, 842 F. Supp. 1268, affirmed, 51 F.3d 876, 876 (9th Cir. 1995) (holding that state was required to negotiate only with respect to specific Class III games that were permitted in the state). Accordingly, the continued vitality of Lac du Flambeau 's holding is very doubtful, and the decision's statements regarding Wisconsin's policy toward gaming have been seriously undercut by the 1993 amendment to Article IV, Section 24. [37] ¶ 93. Unlike the expansive interpretation of the term lottery that was at least plausible before 1993, see Lac du Flambeau, 770 F. Supp. at 486, our constitution is now quite clear that the legislature may not authorize any gambling except that permitted by Article IV, Section 24, and is very clear that certain games do not fall under the term lottery in Article IV, Section 24(6). The constitution is now specific about what the state-operated lottery may do and what it may not do. Blackjack and other varieties of banking card games, poker, roulette, craps, keno and slot machines are all games specifically outside the scope of Section 24(6)'s authorized exception, and they do not come within any other exception. Wis. Const. Art. IV, § 24(6)(c). Thus, the legislature may not authorize new casino-type gambling in any form. No exception to the state constitution can be marshaled to support legislative authorization of new casino-type gambling to Indian tribes. The Tribe's existing games such as slot machines and blackjack must be sustained on the basis of the validity of the original compacts, which were negotiated pursuant to court order before the 1993 constitutional amendment, as well as constitutional and contract law. ¶ 94. Article IV, Section 24 embodies a strong state policy against gambling. It prohibits the legislature from authorizing gambling in any form except as permitted in the constitution. Wis. Const. Art. IV, § 24(1). This policy is enforced in ch. 945's criminal statutes. ¶ 95. We might engage in analysis of whether Article IV, Section 24 is self-executing. See Kayden, 34 Wis. 2d at 724. That is, does the constitutional limitation on legislative power to authorize gambling create barriers to gambling activities of our state's citizens without concomitant legislative enactments? Suffice it to say that repealing all criminal gambling statutes in order to permit expanded gambling might not be consistent with the constitutional limitation on legislative power to authorize gambling, because the current criminal statutes on gambling predate the 1993 amendment and repeal of these statutes now might be viewed as tantamount to authorization. Thus, it might be argued that our state's criminal prohibitions have remained in place since 1993 not only by legislative will but also because the state constitution forbids the legislature from rolling back these criminal prohibitions. ¶ 96. In any event, the legislature has not repealed the gambling statutes in ch. 945. Hence, the Governor's agreement to the additional games of keno, roulette, craps, and poker in 2003 was contrary to criminal/prohibitory sections of state law in addition to the constitution. It is beyond the power of any state actor or any single branch of government to unilaterally authorize gaming activity in violation of the policy in Wisconsin's criminal code. The governor may not carve out exceptions to the state's criminal statutes unilaterally. We are unable to conclude that the legislature delegated such power or could delegate such power in light of the 1993 constitutional amendment. ¶ 97. Article V, Section 4 of the constitution directs that the governor take care that the laws be faithfully executed. Accordingly, we conclude that the Governor acted without authority by agreeing to games that are, as reflected in our state's criminal statutes and reinforced by its constitution, prohibited to everyone in the state. The new casino-style games the Governor agreed to in 2003 are expressly forbidden by statute. Thus, the Governor was without authority to agree, on behalf of the state, to add variations on blackjack, electronic keno, roulette, craps, poker, and other non-house banked card games under the 2003 Amendments to the FCP Gaming Compact. By contrast, the Governor was clearly authorized to agree to pari-mutuel wagering on live simulcast horse, harness and dog racing, because this is an activity permitted in Wisconsin. See Wis. Stat. § 562.057. ¶ 98. Our holding today raises inevitable questions about the validity of the original 1992 FCP Gaming Compact and the 1998 amendments thereto. Clearly, the 1992 Compact encompasses games that were and are precluded under our state's criminal statutes. [38] ¶ 99. The 1992 Gaming Compact was negotiated under a constitutional § 14.035, and pursuant to an order of the United States District Court. An action to challenge the substance of the Lac du Flambeau decision in this court was unavailing, and that case is over. Both the tribes and the state have relied on the validity of the original compacts. Any attempt at this point to impair these compacts would create serious constitutional questions. ¶ 100. Two pieces of legislation signal legislative approval of the original compacts. Wisconsin Stat. § 992.20(1) validates [a]ll contracts for the ... joint exercise of any power or duty required or authorized by law entered into by a municipality, as defined in s. 66.0301(1)(a), and a federally recognized Indian tribe or band in this state before May 6, 1994. Wis. Stat. § 992.20(1). The term municipality expressly includes the state of Wisconsin, and we think it axiomatic that a compact is a form of contract. Wis. Stat. § 66.0301(1)(a). [39] Furthermore, IGRA expressly contemplates that tribal-state gaming compacts may include provisions relating to ... the allocation of criminal and civil jurisdiction between the State and the Indian tribe, and the compact thus involves a joint exercise of power authorized by law. 25 U.S.C. § 2710(d)(3)(C)(ii). ¶ 101. The legislature also demonstrated an intention to recognize the original compacts by virtue of Wis. Stat. § 565.01(6m), in which the legislature excepted tribal compacts from the definition of lottery as narrowed in the statutes prior to the passage of the 1993 constitutional amendment. Wis. Stat. § 565.01(6m)(c). [40] In 1992, the legislature was, in theory, able to authorize the Wisconsin Lottery to operate any game that contained the elements of prize, chance, and consideration. Had it done so, the state would have been obligated to negotiate these games under IGRA. ¶ 102. Thus, we do not believe the 1992 compact suffered from any infirmity under state law when it was entered into. Whether the 1992 compact is durable enough to withstand a change in state law that alters our understanding of what is permitted in Wisconsin is a separate question. The resolution of this question is likely to turn, at least in part, on the application of the impairment of contracts clauses in the United States and Wisconsin Constitutions as well as IGRA. Because these issues are not before us, and because they may turn in large measure on unresolved questions of federal law, our decision stops short of resolving these important questions. [41]