Browse articles by topic

California SC ruling paves way for new Class III casinos


The California Supreme Court has ruled in favor of tribes wishing to build new Class III casinos in California, removing a major barrier to decades-old plans for the construction of new facilities in the state.

In a 5-2 opinion, the court ruled that the Governor has the power to allow the Department of the Interior to take land into trust for casino-style gaming.

The case dates back to 2002, when the Enterprise Rancheria of Maidu Indians requested that the Interior Secretary acquire land in Yuba County, north of Sacramento, on the tribe’s behalf. The tribe aimed to construct a casino on the land, featuring Class III games such as roulette, blackjack and slots.

In 2011, the Interior Secretary notified then-Governor of California Jerry Brown, as gubernatorial approval is required to take land into trust for federal gaming under the federal Indian Gaming Regulatory Act.

Brown concurred with the decision, arguing that it would “directly benefit” a “large tribal population” of “more than 800 native Californians who face serious economic hardship”. That the casino would “create jobs and generate revenue for Yuba County,” which had a high rate of unemployment, he added.

The governor then executed a tribal state gaming compact between the state and the Enterprise Tribe, months before the Interior Secretary purchased the land and placed it into trust.

The United Auburn Indian Community, however, argued the Governor’s concurrence was unlawful as he did not have power to do make that decision. He exceeded his authority by entering into compact negotiations for land that hadn’t yet been taken into trust by the Interior Secretary, it claimed.

United Auburn owns and operates the Thunder Valley Casino Resort, located about 20 miles from the proposed site of the Enterprise Tribe’s casino.

However, another appellate court agreed with United Auburn’s assessment, sending the case to the Superior Court.

The decision hinged on Proposition 1A, which amended the state constitution to give the Governor authority authority to negotiate tribal gaming compacts, and allow casino gaming on tribal lands.

United Auburn argued that the Governor may not approve a decision to take land into trust for Class III gaming as this violated the state constitution’s general ban on casino-style games. Proposition 1A sets out an exception to this ban for tribal lands.

The court, however, rejected this interpretation, pointing out that it would create a definition of tribal lands that is not consistent with state or federal law or precedent.

Justice Mariano-Florentino Cuéllar said in his majority opinion that this interpretation –  prohibiting casino gaming on lands taken into trust under IGRA – would base the legality of casino gaming on “whether the Indian land was acquired after IGRA was enacted”.

On the other hand the current Governor, Gavin Newsom, argued that while the law does not specifically say he may concur with a Department of the Interior decision on tribal gaming, it “presupposes that the Governor possesses [that] power”.

He noted that the law used the phrase “in accordance with federal law” and that the federal Indian Gaming Regulatory Act (IGRA) gives Governors power to concur, while no language in the legislation prohibits this.

The court said it was unconvinced by the argument that the Governor is granted the implicit power to concur, but also rejected that “Proposition 1A’s failure to expressly mention the power to concur [would] imply any sort of limitation on the Governor’s inherent powers”.

Cuéllar said that if such a limitation existed, the language of Proposition 1A would have clarified that to voters by only permitting gaming on “land designated as ‘Indian land’ before IGRA was enacted”.

“Yet nothing close to this limitation appears in the language of Proposition 1A,” the ruling said.

United Auburn also argued that, even if the governor may concur with decisions to take land into trust generally, his actions with regard to the Enterprise tribe were still unlawful, as he executed a compact before the land was placed into trust. However, the court noted that 57 California compacts had been negotiated in this way, including United Auburn’s own.

“We decline to read into the constitution a requirement that not only appears nowhere in its text but would also invalidate the gaming operations of Indian tribes across the state — including those of United Auburn,” the court said.

In a dissenting opinion, Chief Justice Tani Cantil-Sakauye argued that voters would not have interpreted Proposition 1A as granting power to the Governor to approve Class III games on new land, and understood it only to refer to existing tribal land. 

Not only does the court’s opinion allow the Enterprise tribe to build a casino offering Class III games, but it also represents progress in other tribes’ efforts to build casinos of their own on land taken into trust.

The North Fork Rancheria of Mono Indians and Red Rock Resorts said the decision “eliminated a major hurdle in the tribe’s decades-long quest to develop a casino near Madera, California.”

“This ruling has been a long time coming for the Tribe and we are thrilled to be able to move forward with them on this very attractive project,” Bob Finch, executive vice president and chief operating officer of Red Rock Resorts, said.

“We expect that the tribe will be announcing more details regarding the casino in the near future.”