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Shakopee Mdewakanton Sioux Community, a Federally Recognized Indian Tribe Little Six, Inc., a Corporation Chartered by the Shakopee Mdewakanton Sioux Community v. Anthony J. Hope, in His Capacity as Chairman of the National Indian Gaming Commission Jana McKeag in Her Capacity as Commissioner of the National Indian Gaming Commission National Indian Gaming Commission, a Commission Established Within the United States Department of the Interior, the Lower Sioux Indian Community in Minnesota v. National Indian Gaming Commission Janet Reno Attorney General of the United States, Sisseton-Wahpeton Sioux Tribe v. United States of America Janet Reno, in Her Capacity as Attorney General of the United States

Citations: 16 F.3d 261; 1994 U.S. App. LEXIS 2006Docket: 92-2954

Court: Court of Appeals for the Eighth Circuit; February 8, 1994; Federal Appellate Court

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The Shakopee Mdewakanton Sioux Community, Little Six, Inc., Lower Sioux Indian Community, and Sisseton-Wahpeton Sioux Tribe, collectively referred to as "the Tribes," have appealed decisions from the National Indian Gaming Commission (NIGC) that classify Keno as a Class III game under the Indian Gaming Regulatory Act (IGRA). The IGRA, enacted in 1988, categorizes gaming on Indian lands into three classes: Class I, which includes traditional social games; Class II, which encompasses bingo and similar games regulated by the NIGC without the need for tribal-state compacts; and Class III, which includes all other gaming types that require such compacts for operation. The NIGC was established to regulate Indian gaming and is authorized to create necessary regulations. In April 1992, the NIGC classified Keno as Class III gaming. The Tribes filed a lawsuit to stop the enforcement of this classification, arguing it should be considered a Class II game. The district court applied the Chevron deference doctrine to agency rulemaking and ruled in favor of the NIGC, leading to the Tribes' appeal.

The Tribes argue on appeal that the Commission's classification of keno as a class III game is arbitrary and capricious, claiming that this decision violates the principle of statutory construction favoring Indian Tribes. In analyzing the Commission's decision, the court employs the Chevron test, which consists of two steps: first, determining if congressional intent is clear from the statute’s language, and if not, examining legislative history. The court finds the term "game similar to bingo" in the Indian Gaming Regulatory Act (IGRA) ambiguous, noting that keno was seldom mentioned in legislative debates and that there is no clear congressional intent regarding its classification.

The Tribes assert that the Commission acted arbitrarily by classifying keno as not being "similar to bingo," emphasizing the historical relationship between the two games. However, the court's review of the Commission's classification is limited; it must uphold the Commission's interpretation unless it deems the classification impermissible. The Commission classified keno as a class III game because it is a house banking game. The Tribes argue this classification contradicts IGRA's aim to enhance Tribal development and self-sufficiency. They highlight a statutory construction principle favoring Tribes in ambiguous situations but overlook IGRA's dual purpose, which includes regulating gaming to protect Tribes from organized crime and ensure fair operation.

The Commission established a clear distinction between house banking games and other gaming types to protect Indian gaming from corruption, a decision deemed consistent with the interpretation of statutes in favor of Indian Tribes. The Tribes did not claim that the Commission disregarded evidence regarding the history of keno and bingo, nor did they demonstrate any abuse of the rulemaking process. Public hearings and solicitation of comments preceded the promulgation of rules, indicating a thorough consideration of the Tribes' concerns. The Tribes' argument primarily challenges the correctness of the Commission's decision rather than its fairness. The court affirmed the district court's rulings, including the substitution of Janet Reno for William Barr as appellee.

The classification of games is governed by 25 U.S.C. Sec. 2703(7), which defines class II gaming and excludes banking card games and certain electronic games from this classification. The Sisseton-Wahpeton Sioux Tribe's challenge regarding its 'pick bingo' complaint was deemed not ripe for review, as the Commission had yet to determine its classification. The Tribes argued against extending Chevron deference to the newly formed Commission, but the court rejected this, affirming that the Commission is the designated agency for these issues.

While the Tribes contested the Commission's interpretation as not being in their favor, the Commission maintained that its classification of keno as class III gaming served the interests of Indian Tribes and upheld the statutory purpose. The Commission's efforts included soliciting input on games akin to bingo, indicating its commitment to accurately categorizing games relevant to the Tribes.