Oklahoma Bar Journal
Preliminary Observations on the Oklahoma Indian Gaming Landscape After the McGirt and Castro-Huerta Decisions
By William R. Norman Jr., M. Vincent Amato and Michael McMahan
In 2021 alone, the Indian gaming industry in Oklahoma provided $9.59 billion in state economic impact, $163 million in exclusivity payments to the state treasury and 74,723 jobs for Oklahomans – Indian and non-Indian alike – often in otherwise depressed, rural communities.1 The industry became an important economic driver in Oklahoma in the 1980s and emerged as a keystone of tribal-state cooperation in 2005 when Oklahoma tribes first began to implement the Model Tribal Gaming Compact (Model Compact), approved by a statewide referendum.
Recently, this decades-long economic force, and the tribal-state cooperation it represented, has been juxtaposed with politically charged rhetoric and strained tribal-state relations. This rhetoric became even more heated following the July 2020 U.S. Supreme Court decision in McGirt v. Oklahoma.2 In that case, as has been widely publicized, the Supreme Court affirmed the existence of the Muscogee (Creek) Nation Reservation in eastern Oklahoma for criminal jurisdiction purposes.3 Incorporating the Supreme Court’s argument there, Oklahoma courts have since affirmed at least nine other tribes’ reservations, including the following: Cherokee Nation, Choctaw Nation, Chickasaw Nation, Seminole Nation, Miami Tribe, Ottawa Tribe, Peoria Tribe, Wyandotte Nation and Quapaw Tribe.4
The Supreme Court again weighed in on jurisdictional issues between Oklahoma and its tribes in June 2022 in Oklahoma v. Castro-Huerta, holding that concurrent state and federal jurisdiction exists over prosecutions in Indian country.5 The McGirt and Castro-Huerta decisions create the potential for new tribal-state disputes to permeate Oklahoma Indian gaming. This article briefly discusses the established Indian gaming legal structures against which McGirt and Castro-Huerta should be viewed and observed concerning efforts to erode the mature Indian gaming market in Oklahoma, which have so far been unsuccessful.
INDIAN GAMING FRAMEWORK IN OKLAHOMA
Nationwide expansion of tribal gaming ventures in the 1970s and 1980s, including pioneering efforts undertaken by Oklahoma tribes,6 were expedited by a Supreme Court decision upholding the industry’s legality on Indian lands in 1987.7 Congress was increasingly pressured by states to allow them to impose limitations upon and give them a say in the framework for permissible Indian gaming throughout the country. This interest was codified in 1988 as the Indian Gaming Regulatory Act (IGRA), with enumerated policy goals, including “promoting tribal economic development” and shielding tribal gaming from “corrupting influences.”8
First, IGRA created an independent federal regulatory agency, the National Indian Gaming Commission (NIGC), to develop and enforce standards for gaming on Indian lands.9 Second, it created a classification system for permissible Indian gaming activity that, in short, includes traditional Indian games or social games as “Class I gaming”; bingo, pull tabs, lotto, other games similar to bingo and specific card games as “Class II gaming”; and all other gaming activity as “Class III gaming.”10Finally, IGRA itemized necessary requirements for tribes to conduct Class II gaming and Class III gaming, notably the tribe’s enactment of a compliant gaming ordinance for Class II and Class III gaming11 and the additional requirement for an agreed tribal-state compact to be in place for a tribe to conduct Class III gaming.12
In Oklahoma, 35 tribal governments operate over 130 gaming facilities, offering a mix of Class II and Class III games under IGRA.13 Each of these tribes’ gaming is governed by a tribal gaming ordinance14 and the Model Compact, with the tribes themselves as the front-line regulatory authorities. This multi-layer governance structure has worked so far to safeguard both the public and tribal interests in the tribal gaming industry, is malleable enough to incorporate technological advances in tribal gaming and has proven to be economically robust for tribes and Oklahoma. This same three-pronged structure should help insulate the tribal gaming industry in the larger continuing jurisdictional battle between the state and tribes.
THE INDIAN GAMING REGULATORY ACT’S INDIAN LANDS DEFINITION
Under IGRA’s framework, Indian gaming is permissible only on “Indian lands,” a term of art defined as “all lands within the limits of any Indian reservation” or lands outside a reservation, held either in trust or restricted fee status, over which the tribe also “exercises governmental power.”15 Although the act generally contemplates gaming on reservation lands,16 Congress crafted a special provision for Oklahoma tribes. Absent a reservation, this provision permits a tribe to conduct gaming “within the boundaries of the Indian tribe’s former reservation” or on land “contiguous” to the tribe’s other trust or restricted fee lands.17 In essence, Congress equated trust land acquired by a tribe in Oklahoma within its last recognized reservation boundaries to reservation land for gaming eligibility under the act.
Thus, while many tribes have maintained their reservations were never disestablished, both before and after the McGirt decision, tribes who have received recent judicial recognition of fully intact reservations could find they have newfound flexibility in terms of future gaming facility placement. These tribes may arguably rely on the general “Indian lands” definition, which is inclusive of all land within a reservation, as opposed to depending upon the narrow Oklahoma exception in the act that typically requires an often lengthy, expensive and unpredictable trust acquisition process administered by the Department of the Interior.
PREEMINENCE OF THE INDIAN GAMING REGULATORY ACT
In IGRA, Congress stated the policy position of promoting Indian gaming to support strong tribal governments, and courts at all levels have held that IGRA preempts state laws18 that bear on Indian gaming.19 As recently as this term, the U.S. Supreme Court affirmed IGRA’s preemptive effect. In Ysleta del Sur v. Texas,20the Supreme Court was tasked with determining how to apply a tribe-specific federal statute to a tribal-state gaming dispute. Invoking IGRA and rebuffing state arguments that a federal statute concerning the Pueblo incorporated Texas gaming law, the Supreme Court rejected a broad incorporation of Texas law and remanded further questions of the Pueblo’s gaming activity to the appellate court consistent with IGRA.21 Citing IGRA’s preclusive effect, the Oklahoma Supreme Court has found that Oklahoma counties may not impose ad valorem taxes on gaming equipment owned by a non-Indian entity within Indian country.22
Nothing in either the McGirt or Castro-Huerta decision addressed IGRA or contained language that appeared to be designed to alter the act’s framework. For instance, if a tribe were to consider a new gaming facility project in light of the McGirt decision, it would still be required to notify the NIGC months in advance of any potential new gaming facility, satisfy the tribal gaming regulatory authority’s standards for issuing a facility license and once again notify the NIGC following the issuance of the tribal gaming facility license.23 As a result, NIGC’s monitoring, inspection and investigation authority over Indian gaming continues to be unaffected by these decisions.24 Before and after opening a facility, tribes still have to comply with IGRA’s environment, public health and safety (EPHS) provision that governs gaming facility placements from the universe of parcels available to a tribe. The act requires, “The construction and maintenance of the gaming facility, and the operation of that gaming is conducted in a manner which adequately protects the environment and the public health and safety.”25 To realize this, the NIGC is empowered to require a tribe to submit documentation proving adequate EPHS protections prior to the commencement of new gaming activity.26 Many Oklahoma tribes’ gaming ordinances exhaustively enumerate EPHS concerns, such as fire suppression technology, access to potable water, hazardous material sites and climate concerns.27 Thus, IGRA will continue to loom large when considering placement for new gaming facilities.
Additionally, the NIGC will continue to review certain contracts between Indian gaming facilities and other third parties, including contracts a tribe enters into that purport to delegate managerial authority over or may have the potential to grant a proprietary interest in Indian gaming to a third party.28 The NIGC retains authority to review and void any contract that grants a third-party management authority without the NIGC’s prior approval or grants a proprietary interest in an Indian gaming facility to a third party.29
THE MODEL TRIBAL GAMING COMPACT
In addition to IGRA, Class III Indian gaming in Oklahoma also must comply with the Model Compact. Just as IGRA will continue to hold regulatory weight on Indian lands, so too will the Model Compact’s regulatory scheme for Class III gaming.30 The Model Compact explicitly disclaims any effect on pre-existing civil and criminal jurisdiction at either the tribal, federal or state level,31 and federal courts have held that Oklahoma’s state courts lack jurisdiction to adjudicate either prize or tort claims under the Model Compact, deferring instead to tribal courts and administrative bodies.32
As a result, no regulatory gap exists currently, nor should any exist in the future, that would support a challenge to Oklahoma’s gaming regulatory structure based on the holding in Castro-Huerta. Under the Model Compact, the tribes themselves are established as the primary regulators overseeing all licensing and other gaming-related activity in Oklahoma. Additionally, it is worth emphasizing that the Model Compact’s supremacy has recently been affirmed by Oklahoma courts, even after the McGirt decision.33 The Model Compact incorporates extensive regulations the tribes have adhered to for decades as part of the NIGC and tribes’ regulation of the Indian gaming industry in Oklahoma. These include audit and compliance standards, recordkeeping requirements, rules for barring patrons who threaten a facility’s integrity and restrictions on alcohol sales and underage gambling.34 These regulations have been essential to maintaining the integrity and safety of Indian gaming in Oklahoma since long before the Model Compact’s inception, and they should continue unaltered by the McGirt and Castro-Huerta decisions.
THE ROLE OF TRIBAL GAMING ORDINANCES
In addition to federal law and the tribal-state Model Compact, tribes must also comply with their own gaming laws, including both ordinances and regulations. IGRA, NIGC regulations and the Model Compact establish the minimum standards or basic guidelines tribes must follow. Tribes incorporate many of these requirements into their own gaming ordinances in general form and add greater detail to regulations promulgated by a tribal control agency. Tribal regulations, in addition to these state and federal regulatory controls, aim to ensure that tribal gaming is a viable means of economic development and self-sufficiency. With this in mind, the gaming regulations of Oklahoma tribes generally discourage legal risk and encourage sound business practices and economic stability, which helps foster economic development and serves to limit the possibility of radical changes to the Oklahoma tribal gaming landscape.
Moreover, tribes and their gaming regulators are generally mindful of the fact that tribal gaming ordinances – which are themselves guided by and incorporate provisions of detailed federal guidance and regulations – are given weight by federal law. Thus, violations of tribal gaming ordinances are tantamount to violations of federal regulations. For example, many tribes impose more stringent limitations on gaming facility placement than IGRA or the Model Compact. Many tribes prohibit gaming on lands that are not held in trust or restricted fee status, which eliminates economic risks associated with leases.35
Oklahoma’s tribal gaming market is mature. Tribes are fiercely protective of existing gaming revenues and the limitations on the use of the revenues under IGRA.36 They are also typically protective of existing jobs, measured in their evaluation of the feasibility and cost of additional locations and mindful of the dangers of market saturation. In short, since McGirt was decided, there has not been an explosion of new tribal gaming facilities or attempts to make significant changes to federal laws and regulations, the Model Compact or tribal ordinances and regulations. Moving forward, it is reasonable to expect that the tribes will continue to proceed prudently, as they have in the past, with gaming development decisions focused on economic sense, rather than risk and experimentation or jurisdictional issues decided in McGirt.
McGirt’s affirmance of the continued existence of certain Indian reservations in Oklahoma, coupled with the Castro-Huerta decision’s recognition of concurrent criminal jurisdiction, has caused some state officials to claim that post-McGirt Oklahoma is a lawless dystopia. However, it is important to recognize that Indian gaming in Oklahoma has, since its inception, operated in an environment permeated with constant, multitiered regulatory scrutiny; strategic decisions, both legal and economic; and a great deal of pragmatism. Against these forces of legal and economic inertia, it is unlikely the McGirt or Castro-Huerta decisions will cause an explosion of new casinos or staggering changes to the Oklahoma Indian gaming industry. Federal laws and regulations (specifically those contained in IGRA and promulgated by the NIGC), regulatory provisions in the Model Compact and the tribes’ own strict gaming ordinances and regulations will continue to be the predominant factors in determining future tribal gaming activity.
ABOUT THE AUTHORS
William R. Norman Jr., managing partner for the Oklahoma office of Hobbs, Straus, Dean & Walker LLP, has spent the last 28 years promoting and defending the rights of tribal governments. Prior to joining Hobbs Straus, he served a two-year clerkship for the United States Court of Appeals for the 3rd Circuit.
M. Vincent “Vinnie” Amato has served as a law clerk at Hobbs, Straus, Dean & Walker LLP since 2021 and became an associate in September 2022. Originally from Massachusetts, Mr. Amato developed a passion for Indian law during his undergraduate while in the Native American Studies department at West Virginia University. His primary legal interest is Indian gaming.
Michael McMahan is a partner with the law firm Hobbs, Straus, Dean & Walker LLP. He has been representing tribal governments in various capacities since 1997. Mr. McMahan also has a significant tribal and non-tribal transactional and bankruptcy background and litigation experience at all levels of tribal, state and federal courts.
- Am. Gaming Ass’n, “State of Play: Oklahoma” (Dec. 31, 2021), available at
www.americangaming.org/state/oklahoma; Okla. Off. of Mgmt. & Enter. Servs., Gaming Compliance Unit, Annual Report, Fiscal Year 2021 (Jun. 30, 2021), available athttps://bit.ly/3TBMYc0.
- McGirt v. Oklahoma, 591 U.S. _, 140 S. Ct. 2452 (2020).
- Id. at 2459 (2020).
- SeeBosse v. State, 2021 OK 3, 484 P.3d 286, 291 (Chickasaw Nation Reservation); Hogner v. State, 2021 OK CR 4 at ¶4, 500 P.3d 629 (Cherokee Nation Reservation); Grayson v. State, 2021 OK CR 8, 485 P.3d 250, 254 (Seminole Nation Reservation); Sizemore v. State, 2021 OK CR 6, 485 P.3d 867, 871 (Choctaw Nation Reservation); Oklahoma v. Leoppard, CF-2019-194 (Okla. Dist. Ct. Nov. 12, 2020) (Miami Tribe Reservation); Oklahoma v. Brester, CF-2020-178 (Okla. Dist. Ct. Mar. 2, 2021) (appeal filed) (Ottawa Tribe Reservation); Oklahoma v. Tate, CM-2020-207 (Okla. Dist. Ct. Apr. 21, 2021) (Peoria Tribe Reservation); Oklahoma v. Bear, CF-2011-204 (Okla. Dist. Ct. Apr. 21, 2021) (Wyandotte Nation Reservation); Oklahoma v. Lawhorn, 2021 OK CR 37 at ¶2, 499 P.3d 777 (Quapaw Tribe Reservation).
- Oklahoma v. Castro-Huerta, 597 U.S. _,
2022 WL 2334307, 2022 U.S. LEXIS 3222 (Castro). “Indian country” is a term of art under federal statute, which includes Indian reservations, notably those affirmed through the McGirt decision and subsequent state court proceedings. See 25 U.S.C. §1151.
- See, e.g., W. Dale Mason, “Gaming, Indian,”The Encyclopedia of Okla. History and Culture (2009).
- SeeCalifornia v. Cabazon Band, 480 U.S. 202 (1987).
- 25 U.S.C §2702.
- 25 U.S.C. §§2704, 2706.
- 25 U.S.C. §2703(6)-(8).
- 25 U.S.C. §2710(b).
- 25 U.S.C. §2710(d). Note that courts have struck down some of the important aspects of IGRA meant to protect tribes from states, including the obligation of states to negotiate in good faith with tribes seeking a gaming compact, and the imposition of secretarial procedures where a state fails to do so. Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 116 S. Ct. 1114; 134 L. Ed. 2d 252 (1996); New Mexico v. Dep’t of the Interior, 854 F.3d 1207, 1211 (10th Cir. 2017).
- Okla. Indian Gaming Ass’n, History (2017), available at oiga.org/about.
- The form and content of tribal gaming ordinances have historically been largely dictated by the NIGC, which provides a Model Tribal Gaming Ordinance that contains significant mandatory language, although each tribe may customize its own ordinance somewhat to its own particular needs. All tribal gaming ordinances must be approved by the NIGC chairman before they go into effect. 25 U.S.C. §2710(b)(1)(B). Approved gaming ordinances and the NIGC’s own model ordinances may be found at https://bit.ly/3cNvXLj.
- 25 U.S.C. §2703(a)(4).
- 25 U.S.C. §2719.
- Id. §§٢٧١٩(a)(١)-(٢).
- See,e.g., Cayuga Nation v. Tanner, 6 F.4th 361, 368 (2nd Cir. 2021) (stating that the IGRA “preempts all state and local regulatory authority over certain classes of gambling conducted on ‘Indian lands’”) (quoting Mashantucket Pequot Tribe v. Town of Ledyard, 722 F.3d 457, 469-70 (2nd Cir. 2013), explaining that the IGRA “was intended to expressly preempt the field in the governance of (gaming activity on Indian lands”)); Pueblo of Pojoaque v. New Mexico, 863 F.3d 1226, 1235 (10th Cir. 2017) (noting that the IGRA “expressly preempt[s] state regulation of gaming activity that occurs on Indian lands”).
- 25 U.S.C. §§2701(4), 2702(1).
- 142 S. Ct. 1929, 1936-1939 (2022).
- See, e.g., Video Gaming Techs. v. Rogers Cnty., 2019 OK 83, 475 P.3d 824, 834 (“We find that ad valorem taxation of gaming equipment here is preempted [by the IGRA]”).
- 25 C.F.R. §§559.2(a), 559.3.
- 25 U.S.C. §2706(b).
- 25 U.S.C. §2710(b)(2)(E).
- 25 C.F.R. §559.6.
- See, e.g., Cherokee Nation Code tit. 4, §5(B).
- U.S.C. §2711(b).
- 25 U.S.C. §2711(f).
- In 2020, Oklahoma tribes secured a victory over Oklahoma’s governor, who had attempted to unilaterally terminate the existing gaming compacts, confirming the automatic renewal of the Model Compact. Cherokee Nation v. Stitt, 475 F. Supp. 3d 1277, 1279 (W.D. Okla. 2020).
- Model Compact, §9.
- See, e.g.,Comanche Nation v. Oklahoma, 2010 WL 11564937 (W.D. Okla., Dec. 28, 2010).
- Treat v. Stitt, 2021 OK 3, 481 P.3d 240, 241 (holding, “For the new compacts to be valid under Oklahoma law, the Executive branch must have negotiated the new compacts within the statutory bounds of the Model Tribal Gaming Compact …”).
- Model Compact §5(A)-(K).
- Cherokee Nation and Chickasaw Nation provide examples of such restrictions. See Cherokee Nation Code tit. 4, §4(Q); Chickasaw Nation Code tit. 3, §3-201.3(15). Similarly, the Muscogee Creek Nation’s Public Gaming Code limits its scope to gaming on “Muscogee (Creek) Nation property,” even if certain gaming licenses within the code, such as a satellite bingo license, contemplate gameplay at any location within the tribe’s reservation boundaries. See Muscogee (Creek) Nation Code of Laws, tit. 21, §§3-101, 3-103(I)-(J).
- Under IGRA (25 U.S.C. §2710(b)(2)(B)), a tribe may use its net gaming revenues for only limited purposes, specified by statute:
- to fund tribal government operations or programs;
- to provide for the general welfare of the Indian tribe and its members;
- to promote tribal economic development;
- to donate to charitable organizations; or
- to help fund operations of local government agencies[.]
Originally published in the Oklahoma Bar Journal – OBJ 93 Vol 8 (October 2022)