Las Vegas Sun

March 18, 2024

High court avoids slot dispute

The U.S. Supreme Court today rejected a Bush administration effort to limit the types of gambling offered by Indian tribes that aren't authorized to operate casino-style games such as slot machines.

Led by Multimedia Games Inc. of Austin, Texas, shares of companies that make games and slot machines for gambling registered double-digit gains. The high court eliminated "significant legal uncertainty" surrounding the company's ability to sell its products to the tribes, Multimedia Games said in a filing with the Securities and Exchange Commission.

The government was seeking to stop tribes from using electronic devices that resemble video slot machines to dispense a paper "pull tab" that may be a winning ticket. The tribes say the machines are an "entertaining way" to sell the tickets and don't change the game itself. The court, without comment, left intact rulings favoring the tribes.

Federal law lets Indian tribes operate casino gambling such as slot machines and roulette only through tribal-state agreements approved by the U.S. interior secretary. Tribes without such agreements can offer games including bingo and pull-tabs, in which players buy a ticket that is pulled from a pre-printed roll. Players open a tab on the ticket to see if it's a winner.

A video machine that can be used to sell the tickets "resembles, in both appearance and play, a slot machine or other casino gambling device," Justice Department lawyers said in court papers filed in Washington. Allowing such machines lets tribes operate "casino gaming without a tribal-state compact," government lawyers said.

The government filed appeals in two cases. The first involved the Seneca-Cayuga Tribe and the Fort Sill Apache Tribe, both of Oklahoma; the Northern Arapaho Tribe of Wyoming, and Diamond Game Enterprises, a gambling-machine maker based in Chatsworth, Calif. The second case involved the Santee Sioux Tribe of Nebraska.

The Denver-based 10th U.S. Circuit Court of Appeals and the St. Louis-based 8th U.S. Circuit Court of Appeals used different rationales to decide the tribes could use video machines to dispense pull-tab tickets.

At issue were two laws governing gambling in the United States. The first one, enacted in 1951, bars the use of "any gambling device" on federal land, including Indian territory. The other law, enacted in 1988, creates an exception allowing Indian tribes to use gambling devices such as slot machines under a tribal-state agreement.

The Bush administration argued that video machines for dispensing pull-tabs are a "gambling device" under the 1951 law and can't be used by tribes that lack a tribal-state agreement for casino gambling. The government said the 1988 law doesn't create an exception allowing tribes without such agreements to use the machines.

The requirement for a tribal-state agreement to offer casino- style games is intended to protect against corruption, government lawyers said.

Such agreements in California and Montana also limit the number of slot machines or other gambling devices the tribes can install, while agreements in Arizona, Michigan, Wisconsin, California and New Mexico require the tribes to share their gambling revenue with the state, government lawyers said.

Tribes could try to circumvent such requirements by using video pull-tab machines, government lawyers said.

Attorneys for the tribes in Oklahoma and Wyoming said the 1988 law lets tribes use "technological aids" in pull-tab games. The outcome of the game is determined by the pre-printed pull-tab, not by the machine, they said.

The lower courts "simply let tribes that can already sell pull-tabs legally use electronic dispensers as a method of sale, much like selling aspirin in a vending machine instead of over-the- counter," the tribes' lawyers said.

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