Unanimous Court Upholds Video Poker Ban

Special Report - December 23, 2009
A three-judge panel of the North Carolina Court of Appeals has unanimously reversed a lower court’s decision, which had stated that the State could not legalize video poker on the Cherokee Indian Reservation when it is not allowed elsewhere in the State. Wake County Superior Court Judge Howard Manning ruled in February 2009 “that the State is not permitted under federal Indian gaming law to grant the Eastern Band of Cherokee Indians of North Carolina … exclusive rights to conduct certain gaming on tribal land while prohibiting it throughout the rest of the State.” On December 22, the Court of Appeals reversed that finding, upholding the current statutory prohibition on video gaming in the State, while allowing the games on Cherokee lands.

The Eastern Band of the Cherokee Indians of North Carolina operates a Harrah’s Casino under a 1994 compact with the State of North Carolina that “permits the Tribe to conduct ‘raffles,’ ‘video games,’ and ‘other Class III gaming which may be authorized’ in writing by the Governor.” The 1988 federal Indian Gaming Regulatory Act (IGRA) legalized “the operation of gaming by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.” It created three classes of gaming activity. The highest class, Class III, includes “slot machines, casino-style games, banking card games, video games, and lotteries” and “requires a compact between the federally recognized Indian tribe and the State prior to the tribe being permitted to conduct Class III gaming on its land.” North Carolina’s compact with the Cherokee applies until 2030.

Video poker was legal but highly regulated in North Carolina until 2007, when the General Assembly enacted SB 912—Phase Out Video Poker/Except By Compact, which made it “unlawful for any person to operate, allow to be operated, place into operation, or keep in that person’s possession for the purpose of operation any video gaming machine, including video poker machines.” SB 912 included an exemption for federally recognized Indian tribes with Tribal-State Compacts approving Class III gaming activity.

The plaintiffs in this case argued that prohibiting video gaming across the state, but exempting the Cherokee, violated the IGRA provision that Class III gaming is only legal on Indian lands “in a State that permits such gaming for any purpose by any person, organization, or entity.” However, the Court of Appeals found “The State’s interpretation … is both reasonable and supported by the decisions of other courts of other jurisdictions that have addressed this issue.” The unanimous ruling by the Court of Appeals means that there is not an automatic right to appeal, but the State Supreme Court may accept a petition to review the case.

"This is a welcome ruling from the Court of Appeals," commented Bill Brooks, president of the North Carolina Family Policy Council. "The Indian Gaming Regulatory Act is not easy to interpret, but the Cherokee are operating under a compact that was granted by the State during a time when video poker machines were legal. It would not be fair to the tribe to attempt to void the contract because the State wanted to ban video poker machines elsewhere. Nor did Congreee intend to bind the hands of states to regulate gambling within their borders when they passed the federal law allowing tribes to seek a compact with the State to allow gambling on tribal lands."

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