State of Wisconsin v. Ho-Chunk Nation

In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 14-2529
STATE OF WISCONSIN
Plaintiff-Appellee,
v.
HO-CHUNK NATION,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Western District of Wisconsin.
No. 13-cv-334 — Barbara B. Crabb, Judge.
____________________
ARGUED DECEMBER 2, 2014 — DECIDED APRIL 29, 2015
____________________
Before WOOD, Chief Judge, and WILLIAMS and TINDER, Cir-
cuit Judges.
WOOD, Chief Judge. The State of Wisconsin sued the Ho-
Chunk Nation of Wisconsin to stop the tribe from offering
electronic poker at its Madison gaming facility. The state
maintained that the tribe was violating its agreement with
the state to refrain from conducting Class III gaming at that
location. The tribe responded that its poker is a Class II game
2 No. 14-2529
that is permitted by law. The state prevailed in the district
court, and the Ho-Chunk Nation now appeals. We reverse.
I
The Ho-Chunk Nation (the Nation) is a federally recog-
nized Indian tribe with land located in fourteen counties in
Wisconsin. That land is held in trust for the tribe by the
United States. Like a number of tribes, the Nation has pur-
sued gaming as a catalyst for economic development. The
Nation established its first bingo hall in 1983 following a ju-
dicial ruling that a 1973 amendment to the state constitution
legalizing bingo games had the effect of ending the state’s
authority to restrict and regulate bingo on tribal reserva-
tions. By 1992, pursuant to Wis. Stat. § 14.035, the Governor
of Wisconsin had entered into gaming compacts with all of
the state’s tribes, including the Nation. The Nation adopted
a gaming ordinance, which it later amended four times, au-
thorizing the tribe to “conduct all forms of Class I and Class
II gaming on the Nation’s lands.”
The gaming classes to which these compacts and ordi-
nances refer are defined in the Indian Gaming Regulatory
Act (IGRA), at 25 U.S.C. § 2703(6), (7), and (8). Class I gam-
ing includes social games and traditional Indian gaming; it is
regulated exclusively by Indian tribes. 25 U.S.C.
§§ 2703(6), 2710(a)(1). Class II gaming includes bingo and
certain nonbanked card games that are “explicitly author-
ized by the laws of the State, or … are not explicitly prohib-
ited by the laws of the State and are played at any location in
the State.” 25 U.S.C. §§ 2703(7)(A)(ii), 2710(b)(1). (Wiscon-
sin’s Legislative Reference Bureau defines nonbanked games
as those “in which players compete against one another as
opposed to playing against the house.” See Wis. Legislative
No. 14-2529 3
Reference Bureau, The Evolution of Legalized Gambling in Wis-
consin, Informational Bull. 12-2 at 24 (Nov. 2012)
http://legis.wisconsin.gov/lrb/pubs/ib/12ib2.pdf.) Class III
gaming is a residual category that covers “all forms of gam-
ing that are not class I gaming or class II gaming.” 25 U.S.C.
§ 2703(8). This case hinges on the fact that Class II gaming is
enforced exclusively by the tribes and the National Indian
Gaming Commission (Gaming Commission), 25 U.S.C.
§ 2710(b), whereas Class III gaming is regulated pursuant to
tribal-state compacts, 25 U.S.C. § 2710(d).
The Nation operates several gaming facilities, including
one in Madison, now called Ho-Chunk Gaming Madison.
On April 25, 2003, the Nation and Wisconsin executed a
document referred to as the Second Amendment to the
Compact, which authorized the Nation to conduct Class III
gaming at the Madison facility, provided Dane County au-
thorized it to do so. But Dane County withheld its authoriza-
tion after the voters rejected by a margin of nearly two to
one a referendum to that effect held on February 17, 2004.
The current Compact, as amended on September 16,
2008, does not restrict the ability of the Nation to offer Class
II gaming on its tribal lands, including the Madison facility
(nor could it as a matter of federal law). Since November
2010, the Nation has offered nonbanked poker at Ho-Chunk
Gaming Madison. (The parties’ Joint Statement of Stipulated
Facts explicitly recognizes that the type of poker offered at
the Madison facility is nonbanked. 1) Wisconsin considers
1 Paragraphs 25 and 26 of the Joint Stipulation contain the most in-
formation about the type of poker involved here and the parties’ agree-
ment that it is nonbanked:
4 No. 14-2529
this nonbanked poker to be a Class III game. It accordingly
sought an injunction in federal court to stop the poker,
which if properly classified as Class III would violate the
Nation’s compact with the state. Both the state and the tribe
filed motions for summary judgment based on the stipulated
facts. The district court ruled that the electronic poker was,
as the state had contended, a Class III game, and so it grant-
ed the state’s motion for summary judgment and denied the
tribe’s motion. The court enjoined the Nation from offering
poker at the Madison facility, but stayed the injunction
pending the Nation’s appeal to this Court.
“25. E-Poker does not use live dealers or paper or plastic cards and
gaming chips. Instead, cards are shuffled and dealt in an electronic me-
dium, with each player viewing his or her cards at their respective player
stations located around the table. Gaming chips are also maintained in
an electronic medium, and players can view their chip balance on their
individual player stations, which contain touch screens for the players to
view their cards, chips, and other game information. The players also use
the touch screen to input game decisions (e.g., to bet, to check, to fold,
etc.). A large video screen in the center of the table displays wagers made
by each player, the community cards dealt, and other game information,
including the pot total for each hand. Player accounts are maintained at
the cashier’s cage or other secure location where players must conduct
cash-in and cash-out functions.
26. E-Poker is not house banked. HCG Madison collects a “rake”
from the player’s wagers and places all bets in a common pool or pot
from which all player winnings and the rake are paid. All player funds
are tracked and accounted for by the e-Poker table system’s automated
accounting function.”
No. 14-2529 5
II
We review a district court’s grant of summary judgment
de novo. Prestwick Capital Mgmt. v. Peregrine Fin. Grp., 727
F.3d 646, 655 (7th Cir. 2013). We also review de novo any le-
gal questions, including those involving statutory interpreta-
tion. Tradesman Int'l, Inc. v. Black, 724 F.3d 1004, 1009 (7th
Cir. 2013). If the version of poker the Nation offers at its
Madison facility is a Class II game under the statute, the Na-
tion has the authority to offer the game without securing
Wisconsin’s permission. If it is a Class III game, the Nation
may not offer it at the Madison facility under the current
compact with Wisconsin.
To decide which is the proper classification, we begin
with IGRA, 25 U.S.C. §§ 2701–2721. The Act’s “stated goals
were to create a comprehensive regulatory framework ‘for
the operation of gaming by Indian tribes as a means of pro-
moting tribal economic development, self-sufficiency, and
strong tribal governments,’ to ‘shield [tribes] from organized
crime and other corrupting influences, to ensure that the In-
dian tribe is the primary beneficiary of the gaming opera-
tion, and to assure that gaming is conducted fairly and hon-
estly by both the operator and players.’” Wells Fargo Bank v.
Lake of the Torches Econ. Dev. Corp., 658 F.3d 684, 687 (7th Cir.
2011) (quoting 25 U.S.C. § 2702(1)–(2)).
As we noted earlier, IGRA divides all Indian gaming
(that is, gambling run by federally recognized tribes) into
three classes, each subject to different levels of tribal, federal,
and state regulation. As we have noted, we are concerned
with Classes II and III. Class II gaming includes bingo, bin-
go-like games (such as pull tabs), and nonbanked card
games allowed under state law. In a nonbanked game, play-
6 No. 14-2529
ers bet against one another, and the house has no monetary
stake in the bets. In a banked game, such as blackjack, play-
ers bet against the house. Among Class II games, IGRA in-
cludes
card games that—
(I) are explicitly authorized by the laws of
the State, or
(II) are not explicitly prohibited by the laws
of the State and are played at any loca-
tion in the State,
but only if such card games are played in con-
formity with those laws and regulations (if
any) of the State regarding hours or periods of
operation of such card games or limitations on
wagers or pot sizes in such card games.
25 U.S.C. § 2703(7)(A)(ii).
Class II gaming is within the control of the tribes, but it is
also subject to regulation by the Gaming Commission, which
has the power to bring enforcement actions against tribes.
The Commission must oversee a tribe’s Class II gaming un-
less it has granted the tribe a certificate of self-regulation.
Class III gaming (the residual category) includes the
types of games that most would associate with casinos: slot
machines, craps, roulette, and banked card games like black-
jack. It is permitted if three conditions are met: 1) the tribe
has eligible trust lands in the state, 2) the state permits the
gaming for any purpose, and 3) the gaming is governed by a
state-tribe compact. Notably, the first two are identical to the
requirements for Class II gaming. To meet the third re-
quirement, a tribe must enter a compact with the state, and
No. 14-2529 7
the compact must take effect before the casino opens. Id.
§ 2710(d)(1). These compacts sometimes involve extensive
negotiation and litigation. See, e.g., In Re Gaming Related Cas-
es, 331 F.3d 1094 (9th Cir. 2003). A state must “negotiate in
good faith” with a tribe when it requests a compact, but a
state cannot be forced through litigation to negotiate. Semi-
nole Tribe of Fla. v. Florida, 517 U.S. 44 (1996). If the parties
succeed in concluding a compact and the Secretary of the In-
terior approves it, she must publish notice of the approval in
the Federal Register. 25 U.S.C. § 2710(d)(8)(D). The Secretary
may disapprove a compact, if it violates IGRA, any other
federal law, or the trust obligations of the United States to
Indians. Id. § 2710(d)(8)(B). If the Secretary takes no action
within 45 days of the date when the compact is submitted
for approval, the compact is considered approved. Id.
§ 2710(d)(8)(C).
Wisconsin law does not explicitly authorize the Nation to
offer nonbanked poker, and so the Nation cannot rely on
section 2703(7)(A)(ii)(I). It can prevail, if at all, only under
section 2703(7)(A)(ii)(II)—that is, if the games are not explic-
itly prohibited by the laws of the state and are played at any
location in the state. One other provision of IGRA is rele-
vant: section 2710(b)(1), which says that a tribe may engage
in Class II gaming if the state “permits such gaming for any
purpose by any person, organization or entity.” Id. In other
words, Class II gaming “is permitted only on tribal lands in
states that do not entirely prohibit such gaming and only
where the tribal resolution authorizing the operation is ap-
proved by the Chairman of the Commission.” Wells Fargo
Bank, 658 F.3d at 687 (citing 25 U.S.C. § 2710(b)(1)(A)–(B)).
8 No. 14-2529
The parties dispute how sections 2703(7)(A)(ii) and
2710(b)(1) should be understood. The debate arises out of the
Supreme Court’s decision in California v. Cabazon Band of
Mission Indians, 480 U.S. 202 (1987), which drew a distinction
between regulatory and prohibitory measures and held that
only prohibitory measures can negate the permission re-
quired by section 2710(b)(1). In Cabazon, the Supreme Court
held that California could not impose its gaming regulations
on tribal gaming operations because the state’s gaming laws
were regulatory, not criminal. Id. at 220–22. This was im-
portant because California is one of the states covered by a
statute commonly known as Public Law 280; that law takes
away the federal government’s authority under 18 U.S.C.
§§ 1152–53 to prosecute Indian country crimes and turns that
power over to the listed states. See Pub. L. No. 83-280, 67
Stat. 588 (1953). Had the gaming regulations been classified
as criminal, California would have been entitled to impose
its rules on the tribe’s operations. Cabazon concluded that
since Congress had not explicitly granted the state regulato-
ry authority over gaming, the state’s laws were preempted
in light of the profound federal interests in tribal self-
government. The Court’s decision in Cabazon led to a flood
of activity, and states and tribes clamored for Congress to
bring some order to tribal gaming.
Wisconsin is also a state listed in Public Law 280. The
immediate question before the district court was whether it
was necessary to go through the analysis required by Caba-
zon, or if section 2710(b)(1) leaves no room whatsoever for
questioning whether the Wisconsin regime is regulatory or
prohibitory. The court decided that “Cabazon had nothing to
do [with] § 2703 or the meaning of ‘class II gaming.’” It con-
cluded that the Nation’s nonbanked poker game was “ex-
No. 14-2529 9
plicitly prohibited by the laws of the state” and therefore
was a Class III game. 25 U.S.C. § 2703(7)(A)(ii)(II). There was
no point in consulting the legislative history of IGRA or Su-
preme Court precedent on Indian gaming, the court thought,
because it understood Wisconsin to have an explicit prohibi-
tion of nonbanked poker for purposes of IGRA.
Our own review of the statutory scheme convinces us
that it was error to put the Supreme Court’s Cabazon decision
to one side. The reference in section 2703(7)(A)(ii)(II) to
“card games that … are not explicitly prohibited by the laws
of the State” must be read not just in light of the language
itself, but also with attention to “the specific context in
which that language is used, and the broader context of the
statute as a whole.” Robinson v. Shell Oil Co., 519 U.S. 337, 340
(1997). Just as Montana did in its litigation with the Blackfeet
Tribe thirty years ago, Wisconsin “fails to appreciate … that
the standard principles of statutory construction do not have
their usual force in cases involving Indian law.” Montana v.
Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985). “The canons
of construction applicable in Indian law are rooted in the
unique trust relationship between the United States and the
Indians.” Oneida Cnty. v. Oneida Indian Nation of N.Y., 470
U.S. 226, 247 (1985); see also Michigan v. Bay Mills Indian
Cmty., 134 S. Ct. 2024, 2032 (2014) (“Although Congress has
plenary authority over tribes, courts will not lightly assume
that Congress in fact intends to undermine Indian self-
governance.” (citations omitted)). The leading treatise in the
field summarizes the canons that the Supreme Court follows
in cases construing laws affecting Indians as follows:
[T]reaties, agreements, statutes, and Executive
Orders [must] be liberally construed in favor of
10 No. 14-2529
Indians, and … all ambiguities resolved in
their favor. In addition, treaties and agree-
ments are to be construed as Indians would
have understood them, and tribal property
rights and sovereignty are preserved unless
Congress’s intent to the contrary is clear and
unambiguous.
COHEN’S HANDBOOK OF FEDERAL INDIAN LAW § 2.02[1] (2012
ed.). See Oneida Cnty., 470 U.S. at 247–48 ; see also Minnesota
v. Mille Lacs Band of Chippewa Indians, 526 U.S. 172, 196
(1999); Worcester v. Georgia, 31 U.S. (6 Pet.) 515, 528 (1832)
(McLean, J., concurring).
These canons have been widely accepted. This court has
acknowledged the special approach to statutory construction
that Indian law demands. See, e.g., Lac Courte Oreilles Band of
Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 351 (7th
Cir. 1983) (reviewing canons and stating that “these canons
mandate that we adopt a liberal interpretation in favor of the
Indians”). Our sister circuits are in accord. See, e.g., NLRB v.
Pueblo of San Juan, 276 F.3d 1186, 1191–92 (10th Cir. 2002);
Mashantucket Pequot Tribe v. Connecticut, 913 F.2d 1024, 1030
(2d Cir. 1990) (“We deem this legislative history instructive
with respect to the meaning of the identical language in sec-
tion 2710(d)(1)(B), regarding class III gaming, which we
must interpret.”). Cf. Rancheria v. Jewell, 776 F.3d 706, 713
(9th Cir. 2015) (declining to apply the Indian law canon in
light of competing deference required by Chevron U.S.A., Inc.
v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984), but reaf-
firming that the Indian canon “appli[es] when there is a
choice between interpretations that would favor Indians on
the one hand and state or private actors on the other”).
No. 14-2529 11
Wisconsin offers a second argument for finding Cabazon
inapplicable here: because that case predates IGRA, it as-
serts, the Court’s reasoning does not illuminate the statute.
We find this unpersuasive. It makes more sense to read the
statutory language knowing that Congress was legislating
against the background of the Supreme Court’s decisions.
See, e.g., Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S.
104, 108 (1991). Nothing in the text of IGRA supports an in-
ference that Congress was disapproving or limiting Cabazon.
That is reason enough to reject the state’s position.
The history of the legislation provides further support for
the use of Cabazon. Other courts have found that the legisla-
tive history leaves no doubt that Congress intended the
“permit” language for both Class II and Class III gaming in
25 U.S.C. § 2710 to incorporate the Cabazon regulato-
ry/prohibitory distinction. See, e.g., Mashantucket Pequot
Tribe, 913 F.2d at 1029 (“[T]he Senate Report specifically
adopted the Cabazon rationale as interpretive of the require-
ment in section 2710(b)(1)(A) that class II gaming be ‘located
within a State that permits such gaming for any purpose by
any person, organization or entity.’”); Lac du Flambeau Band
of Lake Superior Chippewa Indians v. Wisconsin, 770 F. Supp.
480, 485 (W.D. Wis. 1991) (“The Senate committee stated that
it anticipated that the federal courts would rely on the Caba-
zon distinction between regulatory gaming schemes and
prohibitory laws.”). A leading scholar in the field has also
urged that this is the best reading of the statute. See WILLIAM
C. CANBY, JR., AMERICAN INDIAN LAW IN A NUTSHELL 338
(2009) (“This restriction [of § 2710(b)(1)] is reflective of the
rationale in Cabazon Band; if a state permits bingo or un-
banked card games for any purpose, its public policy cannot
be offended by this type of gambling.”). We decline Wiscon-
12 No. 14-2529
sin’s invitation to break new ground here. Cabazon’s regula-
tory/prohibitory distinction applies when determining
whether state law permits (or does not prohibit) gambling
for the purposes of IGRA.
We turn now to our inquiry under Cabazon: does Wiscon-
sin “permit[] such gaming for any purpose by any person,
organization or entity.” 25 U.S.C. § 2710(b)(1)(a); see also
Cabazon, 480 U.S. at 211 n. 10 (“The applicable state laws
governing an activity must be examined in detail before they
can be characterized as regulatory or prohibitory.”); CONF.
OF W. ATT’YS GEN., AMERICAN INDIAN LAW DESKBOOK § 12.16
(2014 ed.) (“The status of nonbanking card games as class II
must be determined by reference to state law … where state
law is silent as to the validity of nonbanking card games,
they will be valid even if played only on Indian lands.”). Just
as they took different positions on the applicability of Caba-
zon, the parties dispute the proper sources of state law to
consult when determining whether Wisconsin “permits”
poker within the meaning of section 2710(b)(1)(a). We think
it best to begin with Wisconsin’s Constitution, and then con-
sult its statutes and compacts with the tribes. After that, we
discuss the Nation’s suggestion that we should place some
weight on the state’s allegedly lax enforcement of video-
poker laws and its poker advertising.
The parties disagree about the level of generality we
ought to adopt as we examine whether Wisconsin prohibits
poker. A general approach, which takes into account Wis-
consin’s approval of pari-mutuel horse and dog betting,
strengthens the Nation’s argument that Wisconsin has de-
parted from its nineteenth-century constitutional prohibition
on gambling and permits gambling conducted in compliance
No. 14-2529 13
with regulations. The Eighth and Ninth Circuits have held
that for Class II gaming under IGRA, “the state cannot regu-
late and prohibit, alternately, game by game and device by
device, turning its public policy off and on by minute de-
grees.” Sycuan Band of Mission Indians v. Roache, 54 F.3d 535,
539 (9th Cir. 1994); see also United States v. Sisseton-Wahpeton
Sioux Tribe, 897 F.2d 358, 368 (8th Cir. 1990). The Second Cir-
cuit has taken the same approach in an analysis of Class III
gaming. See, e.g., Mashantucket Pequot Tribe 913 F.2d at 1031–
32 (“So here, the district court concluded, after a careful re-
view of pertinent Connecticut law regarding ‘Las Vegas
nights,’ that Connecticut ‘permits’ games of chance, albeit in
a highly regulated form. Thus, such gaming is not totally re-
pugnant to the State’s public policy. Connecticut permits
other forms of gambling, such as a state-operated lottery,
bingo, jai alai and other forms of pari-mutuel betting.”).
Some question has been raised about the relevance of de-
cisions involving Class III gaming to our analysis here. Giv-
en the fact that Class III is defined as “not” Class I or II, we
have no reason to refuse to look at the Class III decisions.
Class III gaming incorporates the same state-law analysis
used for Class II. Compare 25 U.S.C. § 2710(b)(1)(a) with
§ 2710(d)(1)(B). Moreover, Class II gaming is less regulated
than Class III gaming. If Wisconsin is a regulatory state for
purposes of Class III gaming, it would be anomalous to con-
clude that it somehow becomes prohibitory for purposes of
Class II games. What we held a decade ago still applies:
“Wisconsin has not been willing to sacrifice its lucrative lot-
tery and to criminalize all gambling in order to obtain au-
thority under Cabazon and § 2710(d)(1)(b) to prohibit gam-
bling on Indian lands.” Lac Courte Oreilles Band of Lake Supe-
14 No. 14-2529
rior Chippewa Indians of Wis. v. United States, 367 F.3d 650, 665
(7th Cir. 2004).
Even if we were to adopt a more exacting level of gener-
ality, our result would be the same. That would involve an
analysis of Wisconsin law specifically for poker, not for
gambling in general. The question would then be whether
poker is “explicitly authorized by the laws of the State” or
“not explicitly prohibited by the laws of the State and . . .
played at any location in the State.” 25 U.S.C.
§ 2703(7)(A)(ii). As we noted earlier, the Nation cannot point
to any law that suggests Wisconsin explicitly authorizes the
game, and so it must establish the latter.
Wisconsin’s original 1848 constitution prohibited “any
lottery.” This provision had been interpreted as prohibiting
all gambling. But the state abandoned that absolute position
starting in the 1960s, when it legalized various forms of gam-
ing (including promotional contests in 1965, charitable bingo
in 1973, raffles in 1977, on-track pari-mutuel betting on
horseracing in 1987, and a state lottery in 1987) through con-
stitutional amendments. See Wis. Legislative Reference Bu-
reau, Decriminalization of Video Gambling, Budget Br. 99-6
(Nov. 1999); see also Oneida Tribe of Indians of Wisconsin v.
Wisconsin, 518 F. Supp. 712, 719 (W.D. Wis. 1981) (citing the
1973 constitutional amendment as evidence that “Wiscon-
sin’s bingo laws are civil-regulatory and … not enforceable
by the state in Indian country”). When the Wisconsin Legis-
lature’s non-partisan research service described the state’s
approach to gambling two years ago, it had this to say: “The
story of gambling in Wisconsin is an evolution from absolute
legal prohibition to the present situation in which the state
and certain organizations and entities, including Indian
No. 14-2529 15
tribes, may conduct a wide variety of gaming activities.”
Wis. Legislative Reference Bureau, The Evolution of Legalized
Gambling in Wisconsin, Informational Bull. 12-2 at 1 (Nov.
2012) http://legis.wisconsin.gov/lrb/pubs/ib/12ib2.pdf.
We acknowledged these developments in an earlier
IGRA dispute between a different tribe and Wisconsin: “The
establishment of a state lottery signals Wisconsin’s broader
public policy of tolerating gaming on Indian lands ….
[B]ecause IGRA permits gaming on Indian lands only if they
are ‘located in a State that permits such gaming for any pur-
pose by any person, organization or entity,’ the lottery’s con-
tinued existence demonstrates Wisconsin’s amenability to
Indian gaming.” Lac Courte Oreilles Band, 367 F.3d at 664 (cit-
ing Cabazon and quoting 25 U.S.C. § 2710(d)(1)(b)).
That does not mean that Wisconsin has become a free-
for-all with respect to gambling. It amended its constitution
in 1993 to restrict the types of gambling that could be author-
ized by the legislature. The state correctly points out that the
1993 constitutional amendment explicitly prohibited “pok-
er.” It hopes, by relying on that amendment, to avoid the
otherwise clear implication of the constitutional and statuto-
ry changes from the previous three decades. The 1993
amendment reads, in relevant part, “Except as provided in
this section, the legislature may not authorize gambling in
any form.” Wis. Const. art. IV, § 24(1). The article goes on to
“provide otherwise” in several respects: it permits certain
bingo games licensed by the state (§ 24(3)); it permits speci-
fied raffle games (§ 24(4)); it forbids the legislature from
prohibiting pari-mutuel on-track betting (§ 24(5)); and it
permits a lottery (§ 24(6)), although it then excludes from the
16 No. 14-2529
definition of the state-operated lottery several casino-style
games, including poker. Id. art. IV, § 24(6)(c).
But Wisconsin cannot overcome two snags in the argu-
ment based on the 1993 constitutional amendment. First, the
state itself does not treat the prohibition against poker as an
insurmountable obstacle to Indian gaming. If poker were
flatly prohibited as a matter of state constitutional and crim-
inal law, a municipal referendum could not undo that consti-
tutional prohibition. Yet that is what the state proposed to
do in 2004, when the state and the Nation amended their
compact to allow Class III gaming at the Madison facility if
the voters of Dane County approved the arrangement in a
referendum. The logical inference is that if the voters had
said yes, then the Nation could have added poker to the
games offered in the Madison casino. IGRA was designed to
avoid precisely that kind of patchwork prohibition, in which
the state banishes gaming in one county or situation and al-
lows it in another. Wisconsin might argue that poker is not
prohibited as a matter of state law in a Class III game, but
there is no language in the state constitution that supports
that position. As we discussed earlier, Class II and Class III
games are subject to identical “permit” language in IGRA.
Nor can Wisconsin explain, in light of its reading of IGRA,
why the Governor himself was not flouting the state’s crimi-
nal law when he contracted with the Nation to have them
provide poker on other tribal lands.
The second problem with Wisconsin’s position arises out
of legislative action in 1999. Act 9, the budget passed by the
Legislature that year, decriminalized (though did not fully
legalize) the possession of five or fewer video gambling ma-
chines, including video poker, provided that the establish-
No. 14-2529 17
ment was licensed to serve alcohol. See Wis. Stat.
§§ 945.03(2m) and 945.04(2m); see also Wis. Legislative Ref-
erence Bureau, Decriminalization of Video Gambling, Budget
Br. 99-6 (Nov. 1999). Describing Act 9, the Legislative Refer-
ence Bureau noted that “[t]he new law decriminalized pos-
session of five or fewer video gambling machines … reduc-
ing the penalty to a civil offense, subject to a forfeiture of up
to $500 per machine. It also removed the threat that a tavern
could have its alcohol beverage license revoked solely be-
cause of the machines.” Wis. Legislative Reference Bureau,
The Evolution of Legalized Gambling in Wisconsin, Research
Bull. 00-1 (May 2000). Wisconsin rightly points out that Act 9
retained the criminal penalties for a patron to gamble using
a video machine, but the Ho-Chunk Nation is in the position
of the tavern proprietor, not the tavern patron.
Wisconsin cannot have it both ways. The state must en-
tirely prohibit poker within its borders if it wants to prevent
the Nation or any other Indian tribe from offering poker on
the tribe’s sovereign lands. See Lake of the Torches 658 F.3d at
687. When the state decriminalized hosting poker for tav-
erns, it could no longer deny that game to tribes as a matter
of federal law.
Wisconsin argues that the Wisconsin Supreme Court’s
decision in Dairyland Greyhound Park v. Doyle, 719 N.W.2d
408, 428 (Wis. 2006), reinforces its position that the state pro-
hibits poker, but that case simply stands for the proposition
that “based on the 1993 Amendment’s history and the earli-
est legislative interpretations of that Amendment, we con-
clude that the 1993 Amendment was not intended to pre-
clude the Tribes from conducting Class III games pursuant
to the Original Compacts.” Id. at 428. In other words, Dairy-
18 No. 14-2529
land confirms that the 1993 amendment to the state constitu-
tion did not affect the legality of Wisconsin’s gaming com-
pacts with the tribes. Justice Prosser’s separate opinion,
which both parties cite extensively, is of no help, because a
majority of his colleagues explicitly rejected his reasoning.
Id. at 441 (“Justice Prosser’s arguments regarding the scope
of gaming are structurally unsound.”).
Finally, in the interest of completeness we add a few
words about the remaining arguments the parties have ad-
vanced. We reject the Nation’s suggestion that we should
place some weight on the extent to which Wisconsin enforc-
es its criminal law (or does not do so). The fact that the state
delegates to its Department of Revenue the task of enforcing
some criminal laws tells us exactly nothing. We have no in-
tention of getting into the business of scrutinizing the vigor
of enforcement for every gambling infraction in every case.
Nothing in IGRA suggests the Class II or Class III gaming
analysis demands anything beyond positive law. Nor do we
rely on the fact that Wisconsin advertises poker on its tour-
ism websites. To be sure, it would be odd for a state’s tour-
ism bureau to advertise an industry it regards as criminal or
as against public policy. Nonetheless, it is quite unlikely that
the people drafting advertising messages can dictate law en-
forcement policy to the state. This is best left out of the calcu-
lus.
Only one thing remains. In a letter dated February 26,
2009, the Gaming Commission concluded that the poker the
Nation offers in Madison is Class II gaming because Wiscon-
sin does not “wholly prohibit[]” poker. When a federal court
interprets a statute, it should consider the interpretation of
the expert agency charged with implementing that statute.
No. 14-2529 19
IGRA is the organic statute for the Gaming Commission. The
Commission has expertise in classifying Indian gaming, and
it issues regulations that further clarify what constitutes
Class II gaming. 25 C.F.R. § 502.3(c); see also COHEN’S
HANDBOOK OF FEDERAL INDIAN LAW § 12.02[3][a] (“The NIGC
plays a very important role in the determination of whether
proposed gaming is class II or class III … [and] is frequently
called upon to determine whether a particular form of gam-
ing falls within class II or class III.”).
Wisconsin suggests that this letter has only persuasive
value. It notes that the D.C. Circuit held that the Gaming
Commission lacked authority to mandate operating proce-
dures for Class III gaming. Colo. River Indian Tribes v. NIGC,
466 F.3d 134 (D.C. Cir. 2006). An agency that lacks the power
to promulgate regulations for an area of economic activity
might not enjoy much deference on classifying that activity.
But see Diamond Game Enter. v. Reno, 230 F.3d 365, 369 (D.C.
Cir. 2000) (discussing that court’s frustration with the Gam-
ing Commission’s unwillingness to weigh in on a gaming
classification issue and complaining “we have no choice but
to proceed without the benefit of a Commission position, a
situation we expect Congress neither anticipated nor would
appreciate.”). We will assume for the sake of argument that
the letter of the Gaming Commission is too informal to trig-
ger Chevron deference. The possibility of deference under
Skidmore v. Swift & Co., 323 U.S. 134 (1944), remains, howev-
er. In light of the system IGRA establishes and the evidence
that Wisconsin does not prohibit poker as a matter of crimi-
nal law, the Gaming Commission’s opinion is one item on
the scale in favor of the Nation.
20 No. 14-2529
III
IGRA creates a regulatory scheme that respects tribal
sovereignty while carving out a regulatory role for the states
on only the most lucrative forms of casino gambling and
hence the forms of gambling most susceptible to organized
crime. States may choose to bypass this regulatory scheme if
they are willing to ban gaming across the board. But the
states lack statutory authority to deny an Indian tribe the
ability to offer gaming that is roughly equivalent to what the
state allows for its residents. A state must criminalize a
gambling activity in order to prohibit the tribe from engag-
ing in it. Wisconsin does not criminalize nonbanked poker; it
decriminalized that type of gaming in 1999. IGRA thus does
not permit it to interfere with Class II poker on tribal land.
This means that the Ho-Chunk Nation has the right to con-
tinue to offer nonbanked poker at its Madison facility.
The district court’s judgment is REVERSED and the case is
REMANDED for further proceedings consistent with this opin-
ion.