Justia Government & Administrative Law Opinion Summaries

In a case brought in the Pennsylvania Supreme Court's original jurisdiction, Petitioner Sands Bethworks Gaming, LLC, challenged a recent amendment to Pennsylvania gaming law in which casinos paid a supplemental assessment on slot-machine revenue, and the funds are then distributed primarily to underperforming slot-machine facilities to be used for marketing and capital development. Sands alleged that the amendment violated the Pennsylvania Constitution’s requirement of uniform taxation, its mandate that all enactments have a public purpose, and its rule against special legislation. Sands also claimed the scheme violated the Equal Protection and Due Process Clauses of the Fourteenth Amendment to the federal Constitution. The Supreme Court concluded the amendments were indeed unconstitutional, and the offending parts could be severed from the rest of the statute. Any assessment monies paid to the Commonwealth pursuant to the amended gaming law were ordered to be refunded. View "Sands Bethworks Gaming v. PA Dept of Revenue et al" on Justia Law

The Ninth Circuit affirmed the district court's grant of summary judgment for the government defendants, in an action brought by the Community challenging Interior's determination that it is ineligible for gaming for purposes of the Indian Gaming Regulatory Act (IGRA). The panel held that the agency's determination was correct, because the IGRA clearly and unambiguously requires federal recognition by the Secretary of the Department of the Interior before a tribe may qualify to participate in Indian gaming. The panel also held that the Frank's Landing Act did not authorize the Community to engage in class II gaming. View "Frank's Landing Indian Community v. National Indian Gaming Commission" on Justia Law

The Mississippi Gaming & Hospitality Association (Association) petitioned the Mississippi Supreme Court for interlocutory review of a circuit court judgment denying its motions to participate as a respondent-appellee in the appeals filed by RW Development, LLC (RW), and Diamondhead Real Estate, LLC (Diamondhead) after the Mississippi Gaming Commission denied their applications for gaming site approval. The circuit court instead allowed the Association to participate as “friend[] of the court” under the Mississippi Gaming Control Act. Finding nothing improper with the circuit court's decision to allow the Association to participate as amicus curiae, the Court affirmed the circuit court’s decision. View "Mississippi Gaming & Hospitality Association v. Diamondhead Real Estate, LLC" on Justia Law

At issue before the Pennsylvania Supreme Court in this matter was whether sales or use taxes must be paid in relation to two distinct items: the purchase of a closed-circuit horse-racing simulcasting system, and the payment of royalties for intellectual property used in conjunction with the operation of video poker machines. For the Taxpayer's off-track wagering locations, it used video poker machines. Taxpayer entered into a service contract with Teleview Racing Patrol, Inc., pursuant to which Teleview supplied equipment such as screens, satellite dishes, and closed-circuit television feeds. These items were used to provide live displays at each OTW facility of races occurring at Pocono Downs and other tracks across the country. Teleview provided the equipment for this system and, per the agreement, it also supplied personnel to install, maintain, and operate that equipment. In relation to the video poker games, Taxpayer purchased machines from International Gaming Technologies, PLC (“IGT”), on which it paid taxes which are not in dispute. In accordance with a separate intellectual property agreement, Taxpayer also paid IGT royalty fees for intellectual property associated with the various different “themes,” i.e., different poker games that would run on the machines. After a Pennsylvania Department of Revenue audit, Taxpayer was assessed approximately $340,000 in unpaid sales and use taxes, mostly stemming from Taxpayer’s payments to Teleview under the service contract. In challenging the assessment, Taxpayer concluded it had erroneously paid the $13,000 in taxes on its payment of royalty fees to IGT; thus, it sought a refund of those monies. After the Department denied relief, Taxpayer sought review of both matters in the Commonwealth Court, which consolidated the appeals. The court found Teleview consolidated taxable and nontaxable charges on its invoices. The panel thus concluded that Taxpayer had failed to present documentary evidence specifying which portions of the billed amounts were nontaxable, as required by departmental regulations. The Court also rejected Taxpayer's request for a refund on taxes it paid for IGT's royalty fees. The Pennsylvania Supreme Court reversed the Commonwealth Court's order insofar as it upheld the Board of Finance and Revenue's determination relative to the IGT contract, but affirmed in all other respects. View "Downs Racing, LP v. Pennsylvania" on Justia Law

The Supreme Court reversed the circuit court’s judgment reversing the decision of the South Dakota Commission on Gaming, which revoked Defendant’s gaming support license and banned him from entering any gaming establishment in South Dakota, holding that the sanction imposed by the Commission was within its discretion.The Commission revoked Defendant’s license and imposed a sanction after concluding that Defendant mishandled money while working in a casino and that he was untruthful in the subsequent investigation. The circuit court concluded that several of the Commission’s factual findings were clearly erroneous and that the sanction imposed by the Commission was an abuse of discretion. The Supreme Court reversed, holding that the Commission (1) did not err by concluding that Defendant acted dishonestly or fraudulently; and (2) did not abuse its discretion by revoking Defendant’s license and adding him to the exclusion list. View "South Dakota Commission on Gaming v. Johnson" on Justia Law

The Indian Gaming Regulatory Act allows a federally-recognized Indian tribe to conduct gaming on lands held in trust by the Secretary of the Interior for the tribe’s benefit, 25 U.S.C. 2710(b)(1), 2703(4)(B) if the lands had been taken into trust as of the Act’s effective date of October 17, 1988. The Act permits gaming on lands that are taken into trust after that date “as part of . . . the restoration of lands for an Indian tribe that is restored to Federal recognition” to ensure “that tribes lacking reservations when [the Act] was enacted are not disadvantaged relative to more established ones.” In 1992, the Mechoopda Tribe regained its federal recognition; 12 years later, the Tribe asked the Secretary to take into trust a 645-acre Chico, California parcel, so that the Tribe could operate a casino, arguing that the parcel qualified as “restored lands.” The Secretary agreed. Butte County, where the parcel is located, sued. The district court and D.C. Circuit upheld the Secretary’s decision, rejecting an argument that the Secretary erred by reopening the administrative record on remand. The court noted the Secretary’s findings concerning the Tribe’s historical connection to the land and whether current Tribe members were descendants of the historical Tribe and concluded that the Secretary’s substantive decision survives arbitrary-and-capricious review. View "Butte County, California v. Chaudhuri" on Justia Law

Emerald had an Illinois gaming license to operate in East Dubuque. Emerald operated profitably in 1993 but then struggled to compete with an Iowa casino. By 1996, Emerald had closed the casino and was lobbying for an act that would allow it to relocate. The Board denied Emerald’s license renewal application. While an appeal was pending, 230 ILCS 10/11.2 was enacted, permitting relocation. In 1998, before the enactment, defendants met with Rosemont’s mayor and representatives of Rosemont corporations about moving to Rosemont. After the enactment, the parties memorialized the terms of Emerald’s relocation. Emerald did not disclose the agreements as required by Illinois Gaming Board rules. By October 1999, Emerald had contracts with construction companies and architecture firms but had not disclosed them. Emerald altered its ownership structure; several new “investors” had connections to Rosemont’s mayor and state representative. stock transfers occurred without required Board approval. In 2001, the Board voted to revoke Emerald’s license. Its 15-month investigation was apparently based on a belief that Emerald had associated with organized crime but the denial notice focused on inadequate disclosures. The Board listed five counts but did not list who was responsible for which violation. Illinois courts affirmed the revocation but held that the Board had not proven an association with organized crime. Emerald was forced into bankruptcy. The trustee sued the defendants, asserting breach of contract and breach of fiduciary duty. The district court dismissed the breach‐of‐fiduciary‐duty claim as time-barred. The Shareholder’s Agreement required that shareholders comply with IGB rules; the court held that each defendant had violated at least one rule, calculated damages by valuing Emerald’s license, and held all but one defendant severally liable for the loss. The Seventh Circuit concluded that the defendants should be held jointly and severally liable, but otherwise affirmed. View "Estate of Pedersen v. Gecker" on Justia Law

Plaintiffs-Appellants Pueblo of Pojoaque appealed a district court’s dismissal of its claim for declaratory and injunctive relief based on the New Mexico’s alleged unlawful interference with Class III gaming operations on the Pueblo’s lands. In July 2005, the Pueblo and New Mexico executed a Class III gaming compact pursuant to the Indian Gaming Regulatory Act (“IGRA”) that allowed it to operate casino-style gaming on its lands. Prior to the expiration of the compact, the New Mexico Gaming Control Board (“the Gaming Board”) sought to perform its annual compliance review of the Pueblo’s gaming operations. The Pueblo complied on June 24; on June 30, 2015, the compact expired at midnight. The Gaming Board announced that despite the U.S. Attorney’s decision allowing the Pueblo’s gaming operations to continue pending the review, the Pueblo’s casinos were operating illegally due to the absence of a compact, and it placed in abeyance approval of any license application or renewal for vendors who did business with the Pueblo. The Pueblo commenced this action, asserting in part that New Mexico failed to conduct compact negotiations in good faith in violation of IGRA and that individual defendants conspired under the color of state law to “deprive the federal right of the Pueblo and its members to be free of state jurisdiction over activities that occur on the Pueblo lands.” The Pueblo sought an injunction, contending that the Gaming Board’s actions were an impermissible attempt to assert jurisdiction over gaming operations on tribal lands, despite the termination of New Mexico’s jurisdiction over such activities upon the expiration of the compact. The district court entered final judgment, stayed the effects of the preliminary injunction, and issued an indicative ruling that it would vacate or dissolve the preliminary injunction on remand. The Pueblo sought to stay the district court’s judgment and restore the preliminary injunction. The district court declined to do so, but the Tenth Circuit extended a temporary injunction against the State mirroring the preliminary injunction entered by the district court. On appeal, the Pueblo argued the district court did not have jurisdiction to proceed to the merits given the interlocutory appeal of the preliminary injunction and, even if it did, it erred in concluding that IGRA did not preempt New Mexico’s regulatory action. The Tenth Circuit found the text of IGRA clearly evinced congressional intent that Class III gaming would not occur in the absence of a compact, and no such compact existed. Accordingly, conflict preemption also does not apply. For similar reasons, the Court rejected the Pueblo’s argument that the Gaming Board’s determination as to the unlawful nature of the Pueblo’s gaming activities was an improper assertion of jurisdiction preempted by IGRA. Because the Pueblo’s gaming activities are not conducted pursuant to a compact or an alternative mechanism permitted under IGRA, the Pueblo’s present gaming is unlawful under federal law, and the State’s conclusion to this effect was not an exercise of jurisdiction that IGRA preempts. View "Pueblo of Pojoaque v. New Mexico" on Justia Law

In response to a request from the Quapaw Tribe, the National Indian Gaming Commission (NIGC) Acting General Counsel issued a legal opinion letter stating that the Tribe’s Kansas trust land was eligible for gaming under the Indian Gaming Regulatory Act (IGRA). The State of Kansas and the Board of County Commissioners of the County of Cherokee, Kansas, filed suit, arguing that the letter was arbitrary, capricious, and erroneous as a matter of law. The district court concluded that the letter did not constitute reviewable final agency action under IGRA or the Administrative Procedure Act (“APA”). The Tenth Circuit affirmed: the IGRA’s text, statutory scheme, legislative history, and attendant regulations demonstrated congressional intent to preclude judicial review of legal opinion letters. Further, the Acting General Counsel’s letter does not constitute final agency action under the APA because it did not determine any rights or obligations or produced legal consequences. In short, the letter merely expresses an advisory, non-binding opinion, without any legal effect on the status quo ante. View "Kansas v. National Indian Gaming Comm'n" on Justia Law

SugarHouse HSP Gaming ("SugarHouse"), the holder of a Category 2 slot machine license for a casino it operated in Philadelphia, and Market East Associates, L.P. ("Market East"), an unsuccessful applicant for the Category 2 license awarded to Stadium Casino, LLC (“Stadium”), both filed petitions for review ofa Supplemental Adjudication issued by the Pennsylvania Gaming Control Board, in which the Board awarded the last remaining Category 2 license. After careful consideration, the Supreme Court dismissed SugarHouse's petition for review, finding it was not entitled to intervene in the proceedings on remand. In Market East's petition for review, the Supreme Court affirmed the Board's determination that Watche Manoukian, an individual who is an affiliate of Stadium, was not eligible to apply for a Category 1 slot machine license at the time of Stadium's application for its Category 2 license, and, thus, that Section 1304(a)(1) of the Gaming Act would not be violated by the issuance of a Category 2 license to Stadium. However, the Court reversed the Board's determination of what constitutes a "financial interest" as that term was used in Section 1330, and defined that term in this opinion. Because the Board admitted that it did not determine the nature of the specific "equity infusion" Manoukian would supply post-licensure to the trust which has an ownership interest in Stadium, the Court could not affirm the Board's conclusion that Manoukian would not be in violation of Section 1330's 33.3% limit on the possession of a financial interest in a Category 2 slot machine licensee by another slot machine licensee. Thus, the Court again remanded this case for further proceedings. View "Market East Assoc. v. PA Gaming Control Bd." on Justia Law