This year’s changes to tribal compacting rules offered an intriguing possibility to tribes hoping to offer online casino gaming, but a recent US Supreme Court (SCOTUS) decision has made pursuing that option more risky. In late June, SCOTUS overturned its landmark 1984 decision in Chevron v. Natural Resources Defense Council, which had given agencies like the Bureau of Indian Affairs (BIA) greater ability to interpret the law.
The precedent came to be known as the Chevron Doctrine, or just Chevron. Under Chevron, federal courts could not overrule an agency’s interpretation of federal law as long as the interpretation was “reasonable.”
So, if a law was so ambiguous that there are several reasonable ways to read it, a court couldn’t step in to replace an agency’s reading with its own. However, SCOTUS reconsidered that policy based on challenges by a pair of fishing companies to a decision by the National Marine Fisheries Service. On June 26, the justices ruled 6-3 to overturn Chevron and allow federal courts to overturn agency decisions regarding those kinds of gray areas.
That’s important to tribal online gambling because the new BIA rules include a controversial interpretation of the Indian Gaming Regulatory Act (IGRA) — one that commercial competitors are likely to want to challenge in court. By approving those rules, the Secretary of the Interior Deb Haaland endorsed the BIA’s interpretation that a digital bet “takes place on tribal land” if that’s where the receiving servers are, regardless of the bettor’s location.
The Point Is Moot for West Flagler
Tribal gaming attorney Scott Crowell weighed in on the issue during a July 31 webcast by the Indian Gaming Association (IGA) that was posted to YouTube on Aug. 2.
To date, the only compact relying on this interpretation of IGRA is that between Florida and the Seminole Tribe. That compact has already held up to a court challenge without the need to rely on Chevron. However, Crowell points out that things could have gone differently.
The lawyer said so during The New Normal: The Supreme Shift – How Overturning Chevron Affects Indian Country:
The DC Circuit did not rely on Chevron and deference in reaching the conclusion that [the Seminole compact] was lawful. It didn’t find an ambiguity in the statute and the need for some deference.
Now, if West Flagler had gone the other way, I was excited with the Part 293 rights because it would have provided tribes with a second bite at the apple. Under Chevron, the question would have simply been not whether the Department of the Interior got it right, but whether the Department of the Interior’s interpretation was reasonable. And that would have carried the day.
That meant the DC Circuit decision stood, and the BIA-approved state gaming compact giving Hard Rock Bet a monopoly remained in place.
Any tribe attempting to use the BIA’s interpretation to negotiate online casino gambling might face a similar challenge. Such a case wouldn’t necessarily go the same way, and not having Chevron to fall back on would hurt the tribe’s chances.
Webcast host Victor Rocha said he thinks tribes with online gambling rights may endure new legal challenges as a result of the SCOTUS decision. The IGA conference chairman said he thinks tribes will be hauled into court by would-be competitors.
Jason Giles, executive director of the National Indian Gaming Association (NIGA), added during the webcast:
This does impact our industry, commercial and tribal.
Tribes to Hear Again About Chevron’s Overturn
Giles asked Crowell to speak to tribal gaming operators with mobile wagering licenses in mid-September. Tribal leaders will probably want a longer explanation about Loper overturning Chevron vs. Natural Resources Defense Council. So, the topic will be on the agenda during the Sept. 16 to 18 IGA Mid-Year Conference and Expo at Tulalip Resort Casino in Washington State.
Giles believes tribes will be so concerned about the issue that they’ll want to discuss it several times before the November election.
About Chevron Deference
In the webcast, Rocha said:
This is one of those issues that’s kind of arcane … if you’re not watching. But I think this has a potential to have implications for tribes — not just gaming tribes, but tribes across the country.
While Loper didn’t specifically mention tribes, tribal gaming, or mobile wagering, it did talk about federal agencies in a way that will limit their power to interpret nuances in law. The SCOTUS decision also enhanced the authority of Congress and the judicial branch.
Giles said the Chevron precedent was one of the primary cases he had to study during his first year of law school.
Adam Liptak wrote on June 28 for The New York Times:
Supporters of the [Chevron] doctrine say it allows specialized agencies to fill gaps in ambiguous statutes to establish uniform rules in their areas of expertise.
Overturning Chevron may mean the BIA and the National Indian Gaming Commission (NIGC), which uses the framework created by the Indian Gaming Regulatory Act (IGRA), have less authority to interpret ambiguous laws, Crowell said during the webcast.
He believes that federal agencies can still interpret clearly-worded, straightforward laws without judicial involvement.
Crowell Expects Tribes to Be Fine
Tribal gaming compacts use clear language and the West Flagler decision spoke plainly about them without citing Chevron Deference. Crowell said the Loper decision therefore won’t necessarily cause big problems for tribal gaming law.
As for outstanding legal challenges about tribal mobile wagering, like the importance of the servers’ location and “affirmatively including mobile wagering in compacts,” Crowell said there won’t be an immediate impact.
However, he believes it’s important to monitor the US Court of Appeals for the Ninth Circuit.
Crowell said during the webcast:
When you’re looking at interpreting ambiguities and federal statutes as it relates to Indian country, all three Indian Canons were very important and so gave tribes pushback against somebody using Chevron against them in the Ninth Circuit, which still has … more tribes in the Ninth Circuit than any other single circuit.
Nevertheless, Crowell thinks the 1996 precedent from Williams vs. Babbitt applies to “any case” filed in the Ninth Circuit.
That precedent — related to selling reindeer to non-indigenous residents of Alaska — noted that reindeer were imported to Alaska from Russia in the 1900s.
According to Casetext, Part of Thomson-Reuters:
[The] holding [was] that courts should not apply Chevron deference to an agency’s interpretation that ‘raises serious constitutional concerns.’
Therefore, Chevron Deference being overturned wouldn’t apply, either.
Crowell summarized the Ninth Circuit’s Williams vs. Babbitt opinion:
If Chevron Deference and the Indian Canons of construction diverged, the Chevron Deference would trump the Indian Canons. And one positive impact of … Williams vs. Babbitt improves the tribe’s position in any case filed on the Ninth Circuit.
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