ENVIRONMENT : Fate of Indian Reservation Gaming Lies With Justices

WASHINGTON —  Gambling on Indian reservations is big business, although no one knows just how big.

In July, the Treasury Department estimated that $27 billion is wagered annually by the patrons of 120 tribal casinos in 16 states.

For its part, the National Indian Gaming Assn. refers to gambling as “the return of the buffalo,” today’s primary “survival mechanism” for Native Americans.

But no one agrees on who has the legal authority to regulate this fast-growing business. Is it the states, which have general power to prevent crime? The tribes, which say they have sovereign authority on the reservations? Or the federal government, which can claim sovereign power over both?

This week, the Supreme Court will try to straighten out the legal mess, although the justices themselves played a major part in creating the problem in the first place.

BACKGROUND: In 1987, the high court created a legal void when it ruled that states could not enforce their criminal laws against gambling on tribal lands. The opinion in California vs. Cabazon Band reasoned that since the states allowed some gambling, such as a lottery or horse racing, they had implicitly made all gambling legal.

In response, Congress hurriedly passed the Indian Gaming Regulatory Act of 1988. It allowed tribes to freely conduct social gambling, such as bingo games, but said slot machines and high-stakes casinos were allowed only in a state that “permits such gaming.”

To regulate gambling, tribes and the states were told to negotiate a “compact” that would set the rules. Federal judges were empowered to enforce these provisions.

But the compromise law has seemingly provoked more disputes than it has settled.

In California, the state agreed to a compact that allowed high-stakes bingo on reservations but balked at slot machines. Those are illegal under state law, officials said. But, the tribes argued that since electronic devices run the lottery and parimutuel betting, electronically operated slots should be legal on reservations.

Though state officials disagreed, the tribes nonetheless opened a series of casinos offering slot machines. A judge in San Diego has said the state cannot close these operations.

“It is illegal, unregulated gambling,” California Assistant Atty. Gen. Thomas F. Gede said. This dispute has been appealed to the Supreme Court, which has not decided whether to take the case.

Florida Gov. Lawton Chiles agreed to allow card games and wagering on jai alai on reservations, but he refused to negotiate with the tribes over casinos that would use electronic devices. The state’s voters have repeatedly refused to legalize such gambling.

Invoking the 1988 law, the Seminoles took the matter to federal court contending the governor had to negotiate with them. But to the tribe’s surprise, a U.S. appeals court threw out their lawsuit and said the Constitution gives the states “sovereign immunity” from being dragged into federal court.

That decision, if upheld, threatens to unravel the entire law. On Wednesday, the Supreme Court will hear arguments in Seminole Tribe vs. Florida, 94-12.

ARGUMENTS: The states say neither Congress nor the courts can force them to accept casino gambling on the reservations.

“This case is more about federalism than about Indian tribes,” says California Atty. Gen. Dan Lungren in a brief for 31 states.

The tribes, joined by the Clinton Administration, argue that Congress has the ultimate power under the Constitution, and its compromise law should be upheld.

“The states want it both ways. They want to participate in drawing up the regulations, but they also want the unilateral right to block what the tribes want to do,” says Jerome L. Levine, a Los Angeles lawyer who represents the National Indian Gaming Assn.

Regardless of how the court rules, the decision is not likely to be the final word.

If the justices strike down the 1988 law, Congress or the Interior Department will probably be forced to step in and regulate reservation gambling.

If the law is upheld, it will take further rulings to spell out exactly what type of gambling is permitted on the reservations.

Attorneys on both sides of the issue agree the question of reservation gambling has become a legal quagmire, and, as one noted, no one is betting on the final outcome.