Seneca-Cayuga Tribe of Oklahoma v. National Indian Gaming Commission

The Johnson Act prohibited the use of gambling devices (i.e., machines designed and manufactured for use in gambling) on Indian lands. The Indian Gaming Regulatory Act (IGRA) provided a regulatory framework for gaming on Indian lands, with gaming divided into three classifications. Class II gaming under IGRA included bingo and similar games played in the same location, including the game of pull-tabs, regardless of whether those games involved the use of “electronic, computer, or other technologic aids.” Tribes could conduct class II gaming on their lands if certain conditions were met. Neither IGRA nor the Johnson Act specified how the Johnson Act’s gambling-devices prohibition related to technologically aided class II gaming. Class III gaming under IGRA included electronic gaming and slot machines. Class III gaming was heavily regulated, but IGRA provided that the Johnson Act’s prohibition on gambling devices did not apply to any class III gaming conducted pursuant to a compact between a tribe and a state authorizing such gaming. The Seneca-Cayuga Tribe of Oklahoma, Fort Sill Apache Tribe of Oklahoma, and Northern Arapaho Tribe of Wyoming (the tribes) (plaintiffs) were authorized by the National Indian Gaming Commission (the commission) (defendant) to conduct class II gaming on their reservations. The tribes had lease agreements with Diamond Game Enterprises (Diamond) (plaintiff) for a machine used in the class II game of pull-tabs. To use the machine, players inserted money and pressed the DISPENSE button. The machine then cut a pull-tab card from a preprinted roll and dispensed the card. If the machine’s verification function was enabled, players could verify their results by using the machine to scan a bar code on the card. In January 2000, the commission advised the tribes that games played with the machine were unauthorized class III gaming. Federal prosecutors then threatened to bring an enforcement action against the tribes under the Johnson Act for the unauthorized use of gambling devices. The tribes and Diamond sued the commission, seeking a declaratory judgment that pull-tabs played with the machine were class II gaming. The district court concluded that the machine was a permissible IGRA class II technologic aid and was not a gambling device for Johnson Act purposes because the machine merely dispensed preprinted cards and did not determine who would win the game. The commission appealed.