Opinion
No. 3:99-CV-320 GTE
May 14, 2002
ORDER MODIFYING SEPTEMBER 27, 2001, INJUNCTION
Before the Court is the Defendants' Motion for Clarification of Order Granting Summary Judgment and Injunction. The State has responded, and the Defendants have submitted a reply brief. After reviewing the submissions, the Court is prepared to rule. The Defendants' requests will be granted in part and denied in part, and the Court's September 27, 2001, Injunction will be modified accordingly.
I. Factual and Procedural Background
The State of Texas filed this action against the Defendants on September 27, 1999, seeking to stop the operation of the Speaking Rock Casino and Entertainment Center (hereinafter "Casino") by the Ysleta Del Sur Pueblo Indian Tribe (hereinafter "Tribe"). The Casino, located on the Tribe's reservation in El Paso County, Texas, opened in 1993 as a bingo hall, but subsequently expanded its gaming operations to include a wide variety of games of chance. The State sought to shut down the Casino as a nuisance in violation of the Texas Penal Code and the Restoration Act, 25 U.S.C. § 1300g.
The Ysleta Del Sur Pueblo Indian Tribe is also known as the Tigua Indian Tribe.
The parties filed cross-motions for summary judgment. On September 27, 2001, the Court granted the State's motion and denied the Defendants' motion. The Court found that the Tribe "does not, as regards gambling, share a parallel sovereign status with the State of Texas," and shall be treated as any other private citizen or organization in regards to gaming questions. See 9/27/2001 Memorandum Opinion at 27. As such, the Court recognized that the Tribe is not prohibited from participating in all gaming activities, only those gaming activities that are prohibited to private citizens and organizations under Texas law. See 9/27/2001 Memorandum Opinion at 27-28. However, the Court noted that the Tribe had not attempted to qualify to participate in the permitted gaming activities:
There are certain gaming activities that private citizens and/or certain organizations, such as charities, may engage in lawfully in Texas if they comply with those State rules, regulations, and licensing requirements that pertain to such gambling activities. The State has acknowledged that the Tribe, if it qualified under such rules and regulations and, if it complied with those established rules and regulations, could participate in such limited gaming activities. The problem here is that the Defendant Tribe has not even attempted to qualify under the rules, regulations or licensing requirements of the State of Texas with respect to any of the gaming activities presently being conducted at the casino on its Reservation. And, since the [California v. Cabazon Band of Mission Indians, 480 U.S. 202 (1987)] criminal and prohibitory civil-regulatory distinction does not apply under the Restoration Act with respect to gambling, the Tribe cannot engage in these "regulated" gaming activities unless it complies with the pertinent regulations.
9/27/2001 Memorandum Opinion at 28.
The Court concluded as a matter of law that the "Defendants' gaming activities on its reservation violate the Texas Penal Code and the Restoration Act." 9/27/2001 Memorandum Opinion at 37, Finding the Casino to be a common and public nuisance under Texas law, the Court enjoined the Defendants from operating the Casino, having the practical and legal effect of prohibiting illegal as well as legal gaming activities by the Defendants. See 9/27/2001 Order Granting Summary Judgment and Injunction. Because the scope of said injunction is presently at issue, the Court quotes its relevant terms:
The Court concluded as a matter of law:
7. The evidence in this case has established, and the Court so finds, that the Defendants in this case have embarked upon a long-continued habitual course of conduct clearly violative of the Gambling Laws of the State of Texas and that such parties, unless enjoined, will continue such habitual illegal activities at Speaking Rock Casino. More specifically, such Defendants, YSLETA DEL SUR PUEBLO, TIGUA GAMING AGENCY, THE TRIBAL COUNCIL, TRIBAL GOVERNOR ALBERT ALVIDREZ, TRIBAL LIEUTENANT GOVERNOR FILBERT CANDELARIA, and GAMING COMMISSIONER FRANSICO HERNANDEZ have habitually used, and threatened or contemplated the continued habitual use of a place located in El Paso County, Texas, known as, referred to and advertised as the Speaking Rock Casino, which is geographically a part of the Ysleta del Sur Pueblo Indian land and which has a street address of 122 S. Old Pueblo Rd., El Paso, Texas 79907 for the purpose of illegal gambling, gambling promotion and communicating gambling information prohibited by law by providing a place where Defendants charge and collect monetary fees from the public resulting in an economic benefit to them based upon patrons, guests and customers playing gambling games and betting money on games played with cards, dice and other gambling devices in violation of § 47 of the Texas Constitution; Chapter 47 of the Texas Penal Code; § 125.002 and § 125.021 of the Texas Civil Practice and Remedies Code; and 25 U.S.C. § 1300g-1 et seq.
8. The operation of all games played with dice, cards, wheels, slot machines, KENO boards, off track betting and BINGO cards at Speaking Rock Casino are violations of Texas Penal Code § 47.02 and constitute both a common and public nuisance under Texas Civil Practice and Remedies Code § 125.001 Common Nuisance and § 125.021 Public Nuisance.
9/27/2001 Memorandum Opinion at 37-38.
INJUNCTION
It is the Order of the Court, by this Injunction, that all such acts, activities, and conduct set forth above and also set forth below shall permanently CEASE, DESIST, and TERMINATE according to the time-table specified below.
PERSONS AND PARTIES SUBJECT OF INJUNCTION
The Persons and Parties enjoined are as follows:
1. Ysleta del Sur Pueblo
2. Tigua Gaming Agency
3. The Tribal Council of the Ysleta del Sur Pueblo
4. Tribal Governor Albert Alvidrez
5. Tribal Lieutenant Governor Filbert Candelaria
6. Gaming Commissioner Francisco Hernandez
7. The officers, agents, servants, employees, and attorneys of the foregoing persons and parties.
ACTIVITIES ENJOINED
The persons and parties enjoined and listed as being subject of injunction are hereby ORDERED to CEASE, DESIST, TERMINATE AND REFRAIN FROM engaging in, permitting, promoting, and conducting activities at the Speaking Rock Casino in violation of Chapter 47 of the Texas Penal Code, and 25 U.S.C. § 1300g of the Restoration Act, including but not limited to the following activities
A. Gambling activities played with cards, dice, balls, or any other gambling device where some, any or all of the persons and parties enjoined receive an economic benefit. Specifically prohibited are: all card games; all dice games; all games using one or more balls and or a spinning wheel; and games involving a vertical spinning wheel, which require players to pay a monetary fee, whether such fee is designated an "Ante," "Rake," Service Charge or otherwise.
B. Gambling activities played with cards, dice, balls, or any other gambling device some, any or all of the persons and parties enjoined charge or collect or attempt to collect any monetary fee as a requirement for any person to bet on or play any game played with cards, dice, ball or any other gambling device, whether such fee is designated by "Ante," "Rake," Service Charge or otherwise.
C. Gambling activities played with cards, dice, balls, Keno tickets, bingo cards, slot machines, or any other gambling device where some, any or all of the persons and parties enjoined act directly or indirectly as the "house" or "banker" in the same fashion as the operator of the gambling casino.
D. Providing to any person for his/her use a slot machine, the operation of which results in or is calculated to result in an economic benefit to the owner or lessor of the slot machine.
E. Conducting any gambling game from which any person or party enjoined herein is likely to receive any economic benefit other than personal winnings, including, but not limited to:
1. Bingo or any variation thereof;
2. Scratch tickets, peel tickets, or pull tabs;
3. Keno or any variation thereof;
4. Tigua Dice, Craps, or any variations thereof;
5. Slot Machines;
6. Poker card games;
7. Betting on horse races or dog races;
8. Tigua 21, Blackjack, or any variations thereof;
9. Wheel of Fortune, Big Six Wheel, or any variations of wheel games.
F. Allowing other persons or entities to engage in any of the above activities on the premises of the Speaking Rock Casino or anywhere upon the reservation lands of the Ysleta del Sur Pueblo or upon any other lands of said Tribe.
TIME FOR COMPLETE COMPLIANCE
For the reasons set forth in its Memorandum Opinion of even date herewith, the Court gives the Defendants until November 30, 2001, within which to bring themselves into full and complete compliance with the Injunction set forth herein.
9/27/2001 Order Granting Summary Judgment and Injunction at 2-5.
On October 12, 2001, the Defendants filed a motion for reconsideration of the Court's grant of summary judgment. The Defendants also asserted that the injunction is overly broad, in that it prohibits legal as well as illegal gambling activity on the reservation. On November 2, 2001, the Court denied the motion for reconsideration, concluding that the Defendants had presented nothing more than "a rehash of old arguments." In response to the broadness question, the Court recognized that the Tribe would eventually, if it qualified, "be permitted to engage in those gaming activities that any other citizen of Texas could lawfully engage in." 11/2/2001 Order at 3. However, as the deadline for compliance with the injunction had not passed, and the Defendants were not yet in compliance, the Court opted not to modify the injunction, even to allow legal activities, until the illegal gaming activities ceased. The Court provided that once in compliance, the Defendants could petition for a modification of the injunction that would permit participation in legal gaming activities. Specifically, the Court stated:
The Defendants actually filed a Motion for New Trial and Motion to Amend Judgment. Because there had been no trial the motion was treated as a motion for reconsideration.
The Court believes it is unnecessary, and, indeed, that it would be unwise, to change the injunction in anticipation of possible future actions by the defendants to engage in legal gambling on the Tribe's reservation. The Court has enjoined the defendants' operations as a common and public nuisance under Texas law for violating the Restoration Act. After the illegal operations cease and the nuisance is fully abated, the defendants are, of course, free to petition the Court for a modification of any of the terms of the injunction that they believe might limit their ability to participate in any legal gaming activity for which they have qualified under Texas law. As of the date of the injunction, and as of this date, the defendants have not, so far as the record reveals, taken any of the steps necessary to qualify.
11/2/2001 Order at 3-4.
The Defendants timely appealed the grant of summary judgment to the United States Court of Appeals for the Fifth Circuit. Pending the appeal, the Fifth Circuit granted the Defendants' motion to stay the injunction, and the Tribe continued operation of the Casino. On January 17, 2002, the Fifth Circuit affirmed this Court's decision. On February 12, 2002, this Court having received the Fifth Circuit's mandate, the Defendants complied with the injunction, ceasing operation of the Casino.
II. Discussion
On March 1, 2002, the Defendants filed the instant motion. Styled as a motion for reconsideration, the Defendants seek a declaration that various proposed activities do not violate this Court's injunction. Furthermore, to the extent the injunction limits the Tribe's ability to participate in legal gaming activities for which they qualify under Texas law, the Defendants seek a modification of the injunction.
The State generally contends that the Defendants' motion should be denied as moot because, it argues, the injunction only enjoined illegal gaming activities by the Tribe, and not legal activities. Thus, the Tribe is not prevented from otherwise participating in legal gaming activities. The Court disagrees with the State's position. As noted, the legal and practical effect of the Court's injunction was to cease all gaming activities by the Defendants. Though the Court recognized that the Tribe would ultimately be permitted to participate in legal gaming activities under Texas law, if it so qualified, the Court determined that to ensure the illegal gaming activities ceased, all gaming activities should be enjoined on the reservation. Once in compliance, the Court provided that the Defendants could petition the Court for a modification of the injunction that would permit the Tribe to conduct legal gaming operations if it otherwise qualified under Texas law.
Therefore, the Court will consider the Defendants' request for declarations that various proposed activities do not violate the injunction, or, if an activity does violate the injunction and is a legal activity the Tribe is otherwise qualified to participate in under Texas law, that the injunction be modified to permit said activity. The Defendants seek a review of the following proposed activities: (1) conducting state lottery activities as an agent of the State; (2) amusement devices; (3) carnival contests; (4) sweepstakes; (5) charitable bingo; (6) player pool activities; and (7) card games.
A. State Lottery
The Tribe, as an agent of the State, conducts state lottery activities in the reservations' fuel stations. The Defendants seek a declaration that such activities are not in violation of the Court's injunction. The State contends that this is a legal gaming activity not prohibited by the injunction. As discussed above, the Court disagrees with the State's interpretation of the injunction. Because conducting state lottery activities on behalf of the State is a legal gaming activity the Tribe is otherwise qualified to participate in, the injunction will be modified to permit the Tribe to so conduct state lottery activities.
B. Amusement Devices
The Defendants propose to operate various amusement devices, specifically: "electronic, electromechanical, and mechanical contrivances made and used solely for bona fide amusement purposes in compliance with Section 47.01(4)(B) of the Texas Penal Code." Gambling devices are illegal in Texas. Section 47.01(4) defines "gambling device":
(4) "Gambling device" means any electronic, electromechanical, or mechanical contrivance not excluded under Paragraph (B) that for a consideration affords the player an opportunity to obtain anything of value, the award of which is determined solely or partially by chance, even though accompanied by some skill, whether or not the prize is automatically paid by the contrivance. The term:
(A) includes, but is not limited to, gambling device versions of bingo, keno, blackjack, lottery, roulette, video poker, or similar electronic, electromechanical, or mechanical games, or facsimiles thereof, that operate by chance or partially so, that as a result of the play or operation of the game award credits or free games, and that record the number of free games or credits so awarded and the cancellation or removal of the free games or credits; and
(B) does not include any electronic, electromechanical, or mechanical contrivance designed, made, and adapted solely for bona fide amusement purposes of the contrivance rewards the player exclusively with noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less.
Tex. Penal Code Ann. § 47.01(4) (emphasis added). The Tribe proposes to offer "amusement devices" within the gambling device prize exception provided by § 47.01(4)(B). It has adopted the quoted language from § 47.01(4)(B), but not the remainder of § 47.01(4), in a recently enacted Tribal ordinance. See Tribal Ordinance 003 (undated) at 2.01.
The State objects to this amusement device proposal because Tribal Ordinance 003 does not track the complete language of § 47.01(4), only the language from subsection (B). The Court concludes that this is not a basis to deny the Defendants' proposal. Whether Tribal Ordinance 003 contains the complete language of § 47.01(4) is immaterial; the Tribe is nevertheless bound by the Restoration Act to adhere to Texas state gambling law in toto. Merely because Tribal Ordinance 003 omits the complete language of § 47.01(4) does not mean that the Tribe may ignore pertinent state law. Furthermore, the Defendants assure the Court that the Tribe intends to abide by all the provisions of § 47.01(4) and otherwise operate within the gambling device prize exception. Therefore, the injunction will be modified to permit the Tribe to offer the proposed amusement devices, but only to the extent that the Tribe adheres to all the provisions of § 47.01(4), as well as other relevant Texas Penal Code sections.
The State also specifically objects to one particular gaming activity within the Defendants' amusement device proposal: "eight-liners." A Texas state court has described eight-liners as "video poker or video lottery machines." See Owens v. State, 19 S.W.3d 480, 481 (Tex.App. 2000). Another court indicated that the machines "resemble slot machines." See State v. One Super Cherry Master Video 8-Liner Machine, 55 S.W.3d 51, 54 (Tex.App. 2001). The State contends that all eight-liners are illegal in Texas. The Defendants disagree, contending that the Tribe's proposed use of eight-liners is legal in that it complies with the gambling device prize exception of § 47.01(4)(B). The Court agrees with the Defendants.
A witness testified in a Texas state court criminal case that "eight liners are electronic machines resembling slot machines and are commonly called eight liners because they can pay out in eight separate ways — three across, three down, and two diagonally. These machines operate by displaying a three-by-three grid of symbols or `icons' with a winning combination being any three matching symbols in a line." State v. Wofford, 34 S.W.3d 671, 676 (Tex.App. 2000).
As a threshold matter, the Court recognizes that eight-liners have been found to be "gambling devices" under § 47.01(4), and thus illegal. See All-star Amusement v. State, 50 S.W.3d 705 (Tex.App. 2001); Hardy v. State, 50 S.W.3d 689 (Tex.App. 2001). However, the eight-liners in these cases were found to be illegal in that they did not comport to the gambling device exception provided in § 47.01(4)(B). It is clear that if an eight-liner falls under the § 47.01(4)(B) exception, it is not illegal. The Hardy court recognized this, holding that eight-liners fall "within the exclusion provided by section 47.01(4)(B) only if it `rewards the player exclusively with noncash merchandise, prizes, toys or novelties, or a representation of value redeemable for those items.'" Hardy, 50 S.W.3d at 697 (emphasis in original) (quoting Tex. Penal Code Ann. § 47.01(4)(B)). Other Texas courts have recognized that eight-liners are not illegal if they fall under the § 47.01(4)(B) exception. See generally Legere v. State, 2002 WL 560963, n. 4 (Tex.App. 2002) ("Excluded from the definition are those devices that reward the player `exclusively with noncash merchandises, prizes, toys or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less.' As subsection 47.01 (4)(B) exempts certain types of devices, not all eight-liners are necessarily gambling devices."); One Super Cherry, 55 S.W.3d at 53 ("Consequently, the State bore the additional burden of negating the applicability of section 47.01(4)(B) in order to prove that the eight liners were gambling devices within the meaning of the entire statute.").
The Court concludes that the Tribe shall be permitted to offer eight-liners as an amusement device, but only to the extent that it strictly adheres to the prize limitations provided in § 47.01 (4)(B). That is, the device must exclusively offer "noncash merchandise prizes, toys, or novelties, or a representation of value redeemable for those items, that have a wholesale value available from a single play of the game or device of not more than 10 times the amount charged to play the game or device once or $5, whichever is less." The Court cautions that the Tribe in offering amusement devices is to strictly adhere to this language, and the case law interpreting it.
The Court notes its view that gift certificates are not a noncash merchandise prize. See Hardy, 50 S.W.3d at 697.
C. Carnival Contests
The Defendants propose to participate in "carnival contests conducted at carnivals sponsored by qualified organizations, either as agent of the sponsor or as proprietor of the contest, as set forth in Section 47.01 (1)(C) of the Texas Penal Code." Section 47.01(1)(C) provides:
(1) "Bet" means an agreement to win or lose something of value solely or partially by chance. A bet does not include: (C) an offer of merchandise, with a value not greater than $25, made by the proprietor of a bona fide carnival contest conducted at a carnival sponsored by a nonprofit religious, fraternal, school, law enforcement, youth, agricultural, or civic group, including any nonprofit agricultural or civic group incorporated by the state before 1955, if the person to receive the merchandise from the proprietor is the person who performs the carnival contest.
Tex. Penal Code Ann. § 47.01(1)(C). The Defendants note that the Tribe enacted a tribal ordinance including the above-quoted language. See Tribal Ordinance 003 (undated) at 2.03.
The State objects to this proposal, contending that the Tribe cannot be categorized as one of groups permitted to participate in carnival activities. The Court agrees with the State. The Tribe is not a religious, school, law enforcement, youth, agricultural, or civic group. Furthermore, the record evidences no indication that the Tribe has taken steps to become a non-profit entity under Texas state law, see generally Tex. Civ. Stat. Art. 1396-1.01 et seq., or otherwise qualifies as a fraternal group.
D. Sweepstakes
The Defendants' sweepstakes proposal encompasses two pursuits: third-party giveaway contests conducted by national vendors and Tribal sweepstakes activities. The Court will first address the national vendors' contests.
According to the Defendants, the Tribe presently permits national third party vendors to conduct contests on the reservation. Contests conducted at Big Bear sLube Express Stores include:
(1) The Mobil 1 Advantage — receive a Mobil 1 Road Atlas/Travel Guide or Trip Maker CD with a purchase of Mobil 1 synthetic service;
(2) The Mobil 1 25th Anniversary Dream Lease Sweepstakes — register to win a two year lease on a Corvette I Mercedes-Benz/Porsche; and
(3) Mobil 1 Synthetic Service — replica NASCAR promotion
Contests conducted at Running Bear Stores:
(1) Nestles Crunch — win instantly a SUV or tickets to the 2002 NBA Finals;
(2) MM's Crispy — win one of one million instant prizes;
(3) Corn Nuts — win a trip to Wrestle Mania;
(4) Kalil (7Up) — win instantly a home theater;
(5) Pepsi — win Final Four tickets;
(6) Doritos — win a home theater;
(7) Nestles Coca — win a ski vacation;
(8) Arm Hammer Baking Soda — free CD with purchase/shipping;
(9) Cherrios — win a vacation;
(10) Coca-Cola — win a TV, Sony Playstation II. or Mini-Fridge; and
(11) Speedpass — win a vacation.
Though the record does not include specific information about each of these contests or giveaways, the Court will presume that they are of a type that are common at fuel stations and grocery stores across the country. For this reason, the injunction will be modified to permit these and other like-national third party vendor contests, provided that no specific contest violates Texas gaming law. To the extent any such contest violates Texas gaming law, it continues to be prohibited by the injunction.
To the extent that these activities have taken place since February 12, 2002, the date of the Tribe's compliance with the injunction, the Court determines any violation of the injunction to be de minimus.
As for the Tribe itself, it proposes that it be permitted to "conduct sweepstakes activities in compliance with the provisions of Chapter 43 of the Texas Business and Commerce Code." The Tribe has enacted an ordinance adopting provisions of Chapter 43. See Tribal Ordinance 003 (undated).
The State acknowledges that "if the tribe operated a sweepstakes in compliance with Chapter 43 of the Texas Business and Commerce Code and with the Texas Penal Code such activities would be legal, but the tribe has provided no facts to assess and determine whether its proposed `sweepstakes' activities fit within the limits of Texas law." Furthermore, the State asserts that the Defendants provide no description of the proposed Tribal sweepstakes, nor any rules or regulations for such a proposal. Finally, the State notes that "it is difficult to imagine what activities the tribe envisions operating under the sweepstakes provisions. The relied-upon chapter sets out consumer protections and prohibitions for sweepstakes conducted through the mail. See, e.g., Tex. Bus. Comm. Code § 43.002."
The Defendants, in their reply brief, do not address these concerns and otherwise fail to apprise the Court of the type of sweepstakes it proposes. Without a specific proposal for a sweepstakes, legal under Texas law, before it, the Court will deny the Defendants' request to offer one. The Court will not modify the injunction to permit the Tribe to conduct a sweepstakes absent a firm and detailed proposal showing that said sweepstakes would be in compliance with Texas law.
E. Charitable Bingo
Chapter 2001 of the Texas Occupations Code permits the performance of charitable bingo activities by qualified organizations and entities, and regulates the conduct of such activities in Texas. The Defendants propose that the Tribe be permitted to conduct charitable bingo activities, and the Tribe has adopted an ordinance the Defendants contend track the provisions of Chapter 2001. See Tribal Charitable Bingo Ordinance 002-02 (March 1, 2002).
Chapter 2001 provides, in part' that the Texas Lottery Commission (hereinafter "Commission") shall administer the provisions of Chapter 2001. See Tex. 0cc. Code Ann. § 2001.051(a). In order to participate in charitable bingo activities in Texas, an entity must apply for and receive a license from the Commission. See Tex. 0cc. Code Ann. § 2001.101 et seq.
The Tribe has not applied for a license, and contends that they may conduct charitable bingo activities in Texas without such a license, provided this Court so modifies the injunction. The Defendants rely on Section 107(b) of the Restoration Act, codified at 25 U.S.C. § 1300g-6 (b), to contend that the Tribe is not subject to the regulatory jurisdiction of the State of Texas. Because the Tribe is not subject to the regulatory jurisdiction of Texas, they need not seek a license from the Commission or adhere to the other administrative provisions of state law to participate in charitable bingo activities.
The Court notes that while the Restoration Act provides that the Tribe is subject to Texas gaming law, the Act does not provide Texas any regulatory jurisdiction over the Tribe:
(a) All gaming activities which are prohibited by the laws of the State of Texas are hereby prohibited on the reservations and on lands of the tribe. Any violation of the prohibition provided in this subsection shall be subject to the same civil and criminal penalties that are provided by the laws of the State of Texas. The provisions of this subsection are enacted in accordance with the tribe's request in Tribal Resolution No. T.-C.-02-86 which was approved and certified on March 12, 1986. (b) Nothing in this section shall be construed as a grant of civil or criminal regulatory jurisdiction to the State of Texas.25 U.S.C. § 1300g-6 (a)-(b) (emphasis added).
The State objects to the Tribe's charitable bingo proposal, contending that the Tribal ordinance does not fully track Chapter 2001. For instance, the ordinance provides: the Tribe holds the exclusive authority to operate and regulate charitable bingo activities on the Tribe; the Tribe, not the Commission, will act as the governing, auditing, and taxing agency for charitable bingo activities; and "charitable purpose" is defined in relation to benefits for the Tribe. The State further asserts:
The decision of this Court and the 1994 and 2002 decisions of the Fifth Circuit made clear that under the Restoration Act, Texas law defines the legality of any gambling activities by the tribe. The tribe is proposing that it operate bingo not according to Texas law, but according to its own ordinance. That suggestion flies in the face of decisional law that, by way of the Restoration Act's adoption of Texas law as surrogate federal law, the legality of any gambling activities are defined by Texas law.
The Court notes that the Tribe waived any parallel sovereign status, as regards gaming questions, that it might have when it made its compact with Texas in order to obtain federal trust status. The Tribe is bound, through the terms of the Restoration Act, to adhere to Texas gaming law. Not all gaming activities are prohibited to the Tribe, only those gaming activities that are prohibited by Texas law to private citizens and other organizations. As such, the Tribe may participate in legal gaming activities. However, because of the scope and nature of the Tribe's violation of the Texas Penal Code, the Court's September 27, 2001, injunction enjoined all gaming activities on the Tribe, whether legal or illegal. The Court provided that once the Tribe complied with the terms of the injunction and ceased their gaming operations, it could petition the Court for a modification of the injunction to permit it to participate in legal gaming activities, provided that the Tribe otherwise qualfied to participate is said activities. The Court further recognizes that Section 107(b) of the Restoration Act provides that Texas does not hold regulatory jurisdiction over the Tribe.
Though a close question, the Court concludes that, pursuant to its September 27, 2001, Memorandum Opinion, the Defendants have not shown that the Tribe is "otherwise qualified" to participate in charitable bingo activities under Texas law. While the Tribe is not subject to the regulatory jurisdiction of the State, including the Commission, it is clear that the Tribe is subject to Texas law on all gaming matters, including participation in charitable bingo activities. To make the otherwise qualified showing, and to ensure that its charitable bingo proposal is not in violation of the Texas Penal Code, the Court concludes that the Tribe should be required to procure a license from the Commission. Only upon making this otherwise qualified showing, and proper motion to this Court, will the Court consider modifying the injunction to permit charitable bingo activities by the Tribe.
The Court's determination does not mean that the Tribe is subject to the regulatory jurisdiction of the Commission. It is not. Upon the Tribe's otherwise qualified showing, and modification of the injunction, the Tribe's charitable bingo activities would not be subject to the Commission's regulatory scheme. Nevertheless, the Tribe would still be bound by the Restoration Act to adhere to the Texas Penal Code and other relevant law in regards to gaming issues. If the Tribe's charitable bingo activities ever violated relevant Texas law, the State would be free under the terms of the Restoration Act to seek appropriate relief in a federal forum.
F. Player Pool Activities and Card Games
The Defendants propose that the Tribe be permitted to conduct "drawings and tournaments" in which "Player Pool members" compete for "Player Pool funds." Specifically, the Defendants propose:
to conduct free promotional activities such as drawings and tournaments in which the Player Pool members may compete for the funds remaining in the Player Pool fund in which the Tribe does not charge any fee or require any other compensation on the part of the players. The winners of the games will receive various prize amounts from the Player Pool fund. The promotional activities will be conducted on the Tribe's reservation at no cost or charge to Player Pool members. The promotional activities will continue until the funds remaining in the Player Pool have been disbursed to Player Pool members through such promotional activities.
The Tribe has adopted a Tribal resolution "authorizing" such activities. See Tribal Resolution TC-17-02 (Feb. 26, 2002). The resolution provides:
Player Pool permits players to play against each other as opposed to playing against a banker. Except for the advantage of skill or luck, the risks of losing and the chance of winning are the same for all players. Assets accumulated in the pool are maintained to provide prizes in which all players shall have an opportunity to participate. The pool shall consist of cash and non-cash prizes. If a prize other than cash is offered, it must be acquired by the pool at fair market value and not in excess thereof. The rules and regulations of Player Pool shall be made available to all players.
Player Pool funds shall be held in separate non-interest bearing bank accounts, and when deposited shall not be commingled with any funds of the Enterprise or Pueblo. The Enterprise shall provide an accounting of pool wins, losses, and contributions for each day of operation. The accounting shall be completed as soon as practicable after the close of each day in accordance with the Enterprise operations. As a result of the accounting, adjustments for each day will be made between the pool and the Enterprise. Those adjustments are not contributions. The holding of daily receipts, including the sale of chips, pending distributions, is not commingling of funds. The Pueblo may, from time to time, disburse funds to Player Pools as a non-obligated contribution and shall have no right to recoup same. If for any reason a Player Pool game with assets in the pool ceases to be played, all assets remaining on hand in that pool shall be distributed to Player Pool members through promotional events conducted by the Pueblo, at the discretion of the Pueblo.
Tribal Resolution TC-17-02 (Feb. 26, 2002) at 1.
The Defendants also propose that the Tribe be permitted to conduct "promotional activities in which participants will play card games, in which the players compete for various prizes offered by the Tribe, at no charge to the players or participants in the promotional activities. The Tribe will realize no economic benefit or fee from the conducting of the activities or the play of such activities by participants."
The State opposes the two proposals. The State concedes that the Tribe will not charge any fee for participating in the Player Pool or card games, but contends that the Tribe may still charge admission or membership fees or collect other monies under both proposals. The resolution also provides that "adjustments" would be made between the Player Pool and the Tribe. Thus, the proposals are just as illegal under the Texas Penal Code as past Tribe activities, no matter that players compete "against each other as opposed to playing against a banker." But even if the Tribe received no consideration from the players, the Tribe would not qualify under Texas law to permit this activity within the Casino because the Court specifically found that the Casino is not a "private place" under Tex. Penal Code Ann. § 47.02(b). See 9/27/2001 Memorandum Opinion at 30.
The Court agrees with the State that the injunction should not be modified to permit the "Player Pool" and card game proposals. The proposed activities are closely akin to the activities offered by the Casino prior to the injunction, and the Court is not satisfied on the present record that the proposed activities are, in fact, legal under state gambling laws. The Court envisions various ways in which the Tribe can realize consideration for the individuals participating in the proposed gaming activities. Furthermore, the Court is unsure what the Tribal resolution means by the "adjustments" made between the Player Pool and the Tribe. Finally, the Court continues to conclude that the Tribe's Casino is not a "private place" under Tex. Penal Code Ann. § 47.02 (b). All this, coupled with the State's opinion that the proposed activities are illegal, leads the Court to conclude that the injunction will not be modified to permit the Player Pool and card game activities.
III. Conclusion
IT IS THEREFORE ORDERED that the requests made in the Defendants' Motion for Clarification of Order Granting Summary Judgment and Injunction be, and are hereby, GRANTED in part and DENIED in part.
Doc. No. 160.
IT IS FURTHER ORDERED that the Court's September 27, 2001, Injunction be, and it is hereby, MODIFIED to permit the Tribe to participate in the following activities as provided herein:
1. State lottery activities as an agent of the State of Texas;
2. Amusement devices, but only to the extent the Tribe adheres to all the provisions of Tex. Penal Code Ann. § 47.01(4) and other relevant Texas law; and
3. Third-party giveaway contests conducted by national vendors.