Tribes win decision over millions of dollars in revenues demanded by New Mexico

Tuesday, April 2, 2019  

A federal judge has sided with six tribes in a dispute over gaming revenues in New Mexico.

The state demanded upwards of $60 million from the tribes, claiming they owned the money for so-called "free play" at their casinos. But Judge Kirtan Khalsa said that wasn't the case, in a March 30 decision first reported by The Santa Fe New Mexican.

“It’s a common sense observation that it makes no sense to claim revenue sharing based on something that is not, in fact, revenue,” attorney Richard W. Hughes told the paper.

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— Sandia Casino (@sandia_casino) January 21, 2019

The Pueblo of Isleta, the Pueblo of Sandia and the Pueblo of Tesuque filed the lawsuit in June 2017. The Pueblo of Santa Ana, the Pueblo of Santa Clara and the Pueblo of San Felipe later intervened.

According to the judge's decision, the state demanded $10,360,149 in "Free play" revenues from Isleta, $26,491,350 from Sandia and $3,252,873 from Tesuque. Exact dollar amounts weren't cited for other tribal plaintiffs but Hughes said Santa Clara and Santa Ana were told to pay more than $20 million, bringing the total amount sought by the state to more than $60 million.

New Mexico is unusual in that it is the only state where every tribe is operating a casino under a Class III gaming compact that was neither approved nor rejected by the Bureau of Indian Affairs. Tribes are required to share more of their revenues but they aren't getting something meaningful in return, the agency said in reviewing the agreement.

As a result, the compacts are considered to be legal and in effect but only to the extent that their provisions are consistent with the Indian Gaming Regulatory Act.

Of the disputed revenues, Judge Khalsa wrote that the "Pueblos did not agree to them, the additional revenue sharing payments defendants seek do not satisfy the requirements of [IGRA], i.e., they are not payments made pursuant to a bargained-for and agreed-upon compact provision for which meaningful concessions were offered in return.

"Lacking any authorization under [IGRA], defendants’ claims for such payments from the Pueblos constitute an impermissible attempt to impose a tax, fee, charge, or other assessment," the ruling continued.

"The court further finds that defendants’ claims for additional revenue sharing violate the 'per se rule' prohibiting states from taxing federally recognized Indian tribes without express Congressional authorization," Khalsa concluded.

Turtle Talk has posted documents from the case, Pueblo of Isleta v. Grisham.

Judge rules for pueblos in revenue dispute with state (The Santa Fe New Mexican April 1, 2019)