Ysleta del Sur Pueblo Tribe Prevail Over Texas in Supreme Court Showdown

The Supreme Court ruled on June 15, 2022, in the Ysleta del Sur Pueblo v. Texas case. This was the only case on the Court’s docket this term directly touching on tribal gaming.

Justice Neil Gorsuch authored the majority opinion, joined by Justices Breyer, Sotomayor, Kagan, and Barrett. That lineup has become something of a trend in important cases involving tribes in the United States. Meanwhile, the Chief Justice authored a dissent joined by Justices Thomas, Alito, and Kavanaugh. The result, therefore, was a 5-4 decision in favor of the Tribe.

The case centered on the 1968 placement of the Ysleta del Sur Pueblo trust responsibilities in the hands of the State of Texas. During the 1980s, Texas renounced those responsibilities. The federal government re-assumed the responsibilities for the Ysleta del Sur Pueblo, as well as the Alabama and Coushatta Indian Tribes under the Restoration Act of 1987.

As part of the Restoration Act, the tribes were not permitted to offer any gaming activities prohibited by state law. The Ysleta del Sur Pueblo tribe has sought to negotiate with the State to offer Class III gaming (i.e., full casino gaming). To date, the State has rebuffed those requests. However, in 2016, the Tribe began offering electronic bingo. This falls under Class II gaming, which does not require a gaming compact.

Texas authorities moved to shut down the operations, an act that a District Court deemed lawful. The Court of Appeals for the Fifth Circuit upheld that decision, holding that the operations were inconsistent with Texas’s bingo regulations.

However, this week, a divided Supreme Court reversed that decision. The decision effectively establishes that, while Texas law dictates what gaming activities are permitted, the State’s regulations around those activities don’t apply to tribes covered by the Restoration Act.

A long and winding road here

The case has taken a very long path to a decision. While the events that set this all in motion began in 2016, the petition for certiorari was filed in October 2020.

At the heart of the case is a dispute over jurisdiction. When Texas renounced its trust responsibilities, the federal government had to step in. As a consequence, the State lost its regulatory authority. According to the Indian Gaming Regulatory Act (“IGRA”), Texas has the authority to determine which gaming activities are allowed in the State. However, it no longer has any regulatory control over the sovereign territory of the tribes.

Breaking down the holding

The decision details that the pertinent language of the Restoration Act stems from Section 107, which states:

gaming activities which are prohibited by [Texas law] are hereby prohibited on the reservation and on lands of the tribe.

Subsection (b) of the statute states that Texas lacks any civil or criminal regulatory jurisdiction concerning gaming covered by section 107.

The State argued that Subsection (b) meant that Texas regulations covered tribal land. However, in adopting the arguments almost directly from the Petitioners’ briefs, Justice Gorsuch rejects that suggestion. He says that the Texas laws stating that bingo can only be conducted according to the State’s regulations have the effect of “turning the Restoration Act’s terms into an indeterminable mess.”

Prohibiting or regulating?

Justice Gorsuch argues that Texas’s interpretation of Section 107 does not pass muster. He points out that the State would be left with zero authority under Subsection (b) anyway. Texas is free to prohibit bingo. It is not, however, free to dictate to the tribes covered by the Restoration Act how to regulate it.

Despite the obvious differences between the two, this is reminiscent of the Murphy v. NCAA decision, in which SCOTUS struck down the federal prohibition against states’ legalization of sports betting.

Cabazon’s relevance

Justice Gorsuch notes that the Restoration Act came immediately after the SCOTUS ruling on California v. Cabazon Band of Mission Indians. The relevance is that the court found Texas’s laws to be “materially identical” to those at issue in Cabazon.

The Supreme Court operates on the assumption that Congress is aware of and mindful of recent precedent when passing laws. The majority of Justices, therefore, considered it likely that the Cabazon case cast a shadow over the language chosen in the Restoration Act.

The dissent

The dissent from Chief Justice Roberts opens by stating that to obtain federal trust status, the Ysleta del Sur Pueblo “agreed that Texas’s gaming laws should apply on its reservation.”

The Chief Justice flat out rejects the majority’s interpretation of Section 107 (a). He believes it to have been Congress’s intent that all gaming laws apply on the tribal reservation. That would include both prohibitory and regulatory laws.

The elephant in the room throughout the case was the slots-like nature of electronic bingo machines. These, in their modern form, diverge significantly from what those outside the gaming industry typically think of as “bingo.”

That difference in expectations did come up throughout the case. Ultimately, however, it was not enough to sway the majority, and Chief Justice Roberts lacked the votes to support his opinion.

What to make of this decision?

This decision is quite specific to the Restoration Act. As a result, it’s unlikely to impact the gaming landscape elsewhere in the country significantly.

That said, for the Ysleta del Sur Pueblo, the ruling is huge. The decision allows them some security to continue offering gaming activities permitted elsewhere in the State without the fear of Texas regulators coming to fine them or shut them down.

Unfortunately, the range of such offerings remains limited. Texas trails most of the country in terms of legal gambling. Even so, we have seen some efforts in recent years to open things up a little bit. This decision by SCOTUS leaves the possibility that the Lone Star State’s tribal gaming industry could participate in whatever forms of expanded gambling come to the State in the future.

About the Author

John Holden

John Holden is a freelance writer at Bonus, focused on legal and regulatory issues in the gambling industry. He is a full-time academic but has been writing for a number of gaming publications since 2018. He is the author of more than 50 academic publications and hundreds of mainstream articles on the regulation of the gaming industry.