A federal judge has dismissed a lawsuit filed by a Minnesota horse racing track that claimed several tribal gaming properties were offering Class III card games in violation of state and federal laws.
Columbus-based Running Aces launched the lawsuit in April 2024, targeting a lengthy list of casino executives responsible for operating three tribal casinos. The initial lawsuit named over two dozen executives from the Prairie Island Indian Community and Mille Lacs Band of Ojibwe. An amended version, filed a month later, expanded to include the Shakopee Mdewakanton Sioux Community, which operates two tribal casinos.
Almost a year later, Minnesota’s US District Court Chief Judge Patrick J Schiltz dismissed the case. However, as reported by MPR News, rather than ruling on the legitimacy of the claims, Schiltz based his decision on Running Aces’ choice of defendants.
Running Aces alleges ‘illegal and unfair’ advantage
In its complaint, the Running Aces argued that “illegal gambling activities” at the five casinos “gave those casinos an illegal and unfair competitive advantage.”
As stated in the amended filing:
Defendants’ conduct relating to the illegal gambling activities at Mystic Lake Casino Hotel, Little Six Casino, Grand Casino Hinckley, Grand Casino Mille Lacs, and Treasure Island Resort & Casino deprived Running Aces of substantial sums of business revenue and profit. That conduct directly deprived Running Aces of gaming patrons it would have otherwise served, and thus deprived Running Aces of the profits it would have otherwise earned from those patrons through casino card games, as well as through ancillary horse racing and food and beverages.
In response, the suit’s named casino executives—citing Running Aces’ inability to compete—petitioned the court to dismiss the case.
Running Aces (“RA”), a harness racing track offering State-authorized card games, has tried and failed for nearly twenty years to compete with tribal casinos. This lawsuit is a last-ditch effort to accomplish through frivolous litigation what it could not achieve with lawful competition. RA’s lawsuit interferes with lawful tribal gaming, would usurp federal, State, and tribal policymaking, and attempts to seize enforcement powers even a state does not possess.
In Tuesday’s ruling, Schiltz granted the dismissal.
The judge said the lawsuit’s named executives were not representatives of the tribal nations behind the casinos. Schiltz further noted that although the lawsuit didn’t directly name the tribes, had the case proceeded, any ruling would have impacted the nations. At the same time, he said that because tribal nations have immunity, the court cannot force tribal participation in the proceedings.
However, Schiltz dismissed the complaint without prejudice, allowing Running Acres the potential to refile its arguments.
Tribes pleased with judge’s ruling
Due to tribal sovereignty, non-tribal gaming interests occasionally challenge tribal gaming indirectly through other parties, such as Running Aces’ opting to target individual executives. Typically, it doesn’t work.
The only absolute path to success is if the court finds tribal interests incidental to the case. Alternatively, the court could deem the defendants’ interests so tribally aligned they effectively represent those interests.
Otherwise, the court typically finds the case can’t proceed without the tribe as defendants but also can’t name them as defendants due to sovereignty. So, the case gets tossed over the legal Catch-22.
Although Michigan tribes operate online casino games, they agreed to do so subject to state regulation. Otherwise, no tribes have approached online casino gaming through state compacts. However, the actions of the Bureau of Indian Affairs have signified an interest in permitting as much in the future. If that eventually comes to pass, it would be unlikely outside parties could sue.
Judge Schiltz’s decision follows a pattern seen elsewhere in the US, such as the dismissal of Maverick Gaming’s lawsuit in the District of Washington.
In a statement shared with MPR, Prairie Island Indian Community Tribal Council President Grant Johnson said the council is happy the judge dismissed the case. Johnson was one of more than 50 executives named in the action.
We agree with the decision by Chief Judge Patrick Schiltz that the lawsuit was improperly brought against our employees and Tribal leaders.
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