Court’s Ysleta Decision Will Impact Gaming In Texas

Written By John Holden on June 20, 2022 - Last Updated on August 4, 2022
The Yselta ruling will impact regulated gaming in Texas

Last week, the Supreme Court handed down a long-awaited decision in the case of Ysleta del Sur Pueblo v. Texas. While it did not garner much mention in the national press, the Yselta ruling will impact regulated gaming in Texas.

The direct scope of the decision is probably limited to Texas by virtue of the law that is at the center of the case. That’s certain if Texas continues to restrict almost all forms of gambling in the state.

The Restoration Act

In the 1960s, Texas took trust responsibility for the Ysleta del Sur Pueblo tribe and the Alabama-Coushatta Tribe of Texas. Roughly 15 years later, the state renounced those responsibilities.

The federal government took over trust responsibilities in 1987 via a law called the Restoration Act. Broadly, the Restoration Act placed the tribe alongside other tribes where the federal government oversees trust responsibilities.

The law happened to come on the heels of the Supreme Court case of California v. Cabazon Band of Mission Indians. That ruling limited the ability of states to regulate gaming on tribal lands. It would be the impetus for the Indian Gaming Regulatory Act (IGRA) the following year.

Texas cannot regulate tribal activities

It was not immediately clear what effect the Cabazon decision would have. IGRA was passed as to mediate gaming issues between sovereign tribes and states. But in the relatively brief period between 1987 and IGRA’s passage in 1988, there was uncertainty.

As a result, in drafting the Restoration Act, Congress included a provision that said the two Texas tribes could only offer gaming activities that are legal in the state. This effectively meant that if Texas banned all gambling, the tribes could offer no gaming activities.

However, the Restoration Act also said that Texas does not have any regulatory control over the tribes. Texas could determine what gaming, if any, is allowed in the state, but if any gaming is allowed, they could not tell the tribes how to regulate it. This codified the key result from Cabazon for the Restoration Act tribes.

Tribes look to offer electronic bingo

Texas has allowed bingo under limited circumstances for some time. Since Texas allowed it, the tribes in question read the Restoration Act to mean that they could also offer bingo. Texas imposes a number of qualifications and restrictions on bingo.

In 2016, the tribes wanted to offer electronic bingo. Texas moved to shut that down, arguing the tribes were not offering bingo in accordance with state regulations. Litigation ensued.

Supreme Court sides with tribes

This month, the Supreme Court sided with the tribes in a slim 5-4 decision. Justice Neil Gorsuch, who wrote the majority opinion, concluded that the language of the Restoration Act provided Texas the ability to outlaw any type of gambling, but they could not dictate to the tribes how to regulate games that are lawful in the state.

This apparently is true even if there is some debate over the extent to which electronic bingo is different than traditional bingo.

The implications of the decision

The implications of the decision are significant but limited. It only concerns the two tribes covered by the Restoration Act, the Ysleta and the Alabama-Coushatta.

While there are probably similar agreements with other tribes, this act, the Texas Restoration Act, was drafted at a very unique time. It was created between the Supreme Court’s decision in Cabazon and before the passage of IGRA, leaving a very brief window for other laws to be affected by this gap in regulation.

As a result of the decision, the tribes have full control in regulating gaming activities on sovereign land as long as the games are legal in Texas.

Obviously, this decision would be much more meaningful, from a gaming expansion perspective, if it happened in almost any other state. But it is worth remembering that there have been growing calls for expanded gaming in Texas.

Tribes are ready if gaming expands

Sports betting continues to be the most popular form of gaming expansion around the country. It is the most likely candidate to debut next in the Lone Star State. We have also seen efforts to bring casino gambling to the state.

In February, it was reported that the Las Vegas Sands group had launched a Political Action Committee in Texas with an initial war chest of $2 million to bring casinos to the state. Previous efforts have stalled out. Sands seems committed to a long game.

The tribes covered by the Restoration Act are likely to be well-positioned should either casino gambling or sports betting arrive in Texas. Of course, the exact arrival date is still a big question mark.

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