Narrative Opinion Summary
In this case, the Cabazon Band of Mission Indians and the Sycuan Band of Mission Indians contested the State of California's authority to impose a license fee on offtrack betting activities conducted on their reservations. The tribes engaged in simulcast wagering, a form of Class III gaming regulated under the Indian Gaming Regulatory Act (IGRA), which mandates that compacts be negotiated between the tribes and the state. The tribes had entered into such compacts with California, allowing them to operate simulcast wagering facilities and receiving a commission from Southern California Off Track Wagering, Inc. (SCOTWINC). The tribes argued that the license fee, considered a tax by the state, was a violation of IGRA's prohibition against state taxation of Class III gaming activities conducted by tribes. The district court ruled in favor of California, but the Ninth Circuit reversed the decision, finding that the license fee constituted an impermissible tax under IGRA. The court remanded the case with instructions to enter summary judgment for the tribes, without addressing broader questions of state jurisdiction preemption under federal Indian law, confirming that the state could collect fees on wagers not placed at Indian facilities without violating IGRA.
Legal Issues Addressed
Classification of Fees as Taxes under IGRAsubscribe to see similar legal issues
Application: The court found that the license fee imposed by the State is classified as a 'tax, fee, charge or other assessment' under IGRA, prohibiting such assessments on authorized Class III activities conducted by Indian tribes.
Reasoning: The license fee imposed by the State is classified as a 'tax, fee, charge or other assessment' under the Indian Gaming Regulatory Act (IGRA) and is paid by racing associations that conduct horse races and manage wagers.
Prohibition of State Taxation under the Indian Gaming Regulatory Act (IGRA)subscribe to see similar legal issues
Application: The Ninth Circuit determined that the state license fee imposed on the tribes' gaming activities constituted an impermissible tax under IGRA, which prohibits states from taxing Class III gaming activities conducted by Indian tribes.
Reasoning: The Ninth Circuit agrees with the Bands, affirming that the IGRA explicitly prohibits such state taxation.
Tribal Authorization and Class III Gamingsubscribe to see similar legal issues
Application: The racing associations authorized by the Indian Bands to conduct wagering were deemed to be engaging in Class III activities, and thus the state-imposed license fee was deemed a tax, violating IGRA.
Reasoning: The Bands have explicitly permitted the racing associations to operate on tribal land and conduct simulcast wagering, making the license fee a tax on an authorized entity, thus violating section 2710(d)(4) of the IGRA.