Joseph Dalton et al.,
George Pataki, as Governor of the State of New York, et al.,
Respondents-Appellants, et al.,
George Pataki, as Governor of the State of New York, et al.,
Respondents-Appellants, et al.,
2005 NY Int. 62
In 2003, we addressed whether the Governor had the
authority to enter into compacts with Indian tribes pursuant to
the federal Indian Gaming Regulatory Act of 1988 (IGRA) (25 USC § 2701-2721; 18 USC §§ 1166-1168) allowing casino gaming on
Indian lands within the State ( see Saratoga County Chamber of
"no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, and except pari-mutuel betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, shall hereafter be authorized or allowed within this state"
(NY Const, art I, § 9 ).
The Constitution further allows individual
municipalities to authorize, by vote at a general or special
election, certain "games of chance" -- such as bingo, lotto or
other types of games where a winner is determined on the basis of
Background of IGRANecessary to our determination is an analysis of the federal Indian Gaming Regulatory Act of 1988 (IGRA) (25 USC § 2701-2721; 18 USC §§ 1166-1168). Contrary to plaintiffs' assertion, IGRA has preempted the field in the area of Indian gaming but permits states to negotiate with tribes to regulate gaming. IGRA was enacted, in part, to promote the self- sufficiency and economic development of Indian tribes ( see 25 USC § 2701 , 2702 ). Congress determined that "Indian tribes have the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity" (25 USC § 2701 ).
Tribal-State CompactsPlaintiffs assert that although the Constitution allows for certain types of regulated gaming, it still completely prohibits commercial gaming. However, IGRA does not allow the State to consider the purpose behind the gaming. The language of the statute is clear that Class III gaming will be permitted when
"the Secretary, after consultation with the Indian tribe and appropriate State and local officials, including officials of other nearby Indian tribes, determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary's determination"
(25 USC § 2719 [b][A]).
Here, plaintiffs urge that both the constitutional
provision and New York's public policy against commercial
gambling prevent the Governor from agreeing that there would not
be a detrimental effect on the communities at issue if casinos
Video Lottery GamingPlaintiffs next challenge the constitutionality of Part C of Chapter 383 of the Laws of 2001. That section authorized "the operation of video lottery gaming at Aqueduct, Monticello, Yonkers, Finger Lakes and Vernon Downs racetracks," and at certain other racetracks that are licensed pursuant to Article 3 of the Racing, Pari-Mutuel Wagering and Breeding Law and located within a county that has approved video lottery gaming (L 2001, ch 383, Part C, § 1). The video lottery is played using video lottery terminals (VLTs), which are each connected to a central system through the use of "site controllers" -- computers that connect several VLTs both to each other and to the central system. In the most common form of video lottery gaming, participants at individual VLTs play against each other by purchasing electronic instant tickets from a finite pool. In order to play, individuals place cash or other currency into the VLT to purchase an electronic instant ticket. The player then determines the "game identifier" and the price of the electronic ticket to be purchased. The VLT receives the next ticket from the site controller and displays the predetermined outcome -- win or loss. If the player wins, the VLT will print an "electronically encoded
Reinvestment of Video Lottery RevenuesDefendants cross-appeal, arguing that Part C is constitutional in all respects. Specifically, they assert that the revenue distribution provisions requiring reinvestment in breeding funds and for the enhancement of purses is constitutional and, even if it is not, that the reinvestment provision is severable. Part C provided for the allocation of revenue from the video lottery. The funds used to pay out prizes must be no less than 90% of video lottery sales (L 2001, ch 383, Part C, § 2). Fifteen percent of the remaining revenue -- after the prizes were paid -- was allocated to the Division of the Lottery for administrative and operating expenses (L 2001, ch 383, Part C, § 2 [A]). The legislation also authorized a vendor's fee for
Mega MillionsFinally, plaintiffs challenge the constitutionality of Part D of Chapter 383 of the Laws of 2001. Pursuant to this legislation, authorizing the Division of the Lottery to "enter into an agreement with a government-authorized group of one or more other jurisdictions providing for the operation and administration of a joint, multi-jurisdiction, and out-of-state lottery" (L 2001, ch 383, Part D, § 3 [codified at Tax Law § 1617]) New York entered into an agreement with nine other states to participate in Mega Millions. As noted above, the State Constitution prohibits lotteries in general, but makes an exception for lotteries "operated by the state" (NY Const, art I, § 9 ). The Mega Millions agreement specifically provides that the revenue generated by the lottery within each state remains in that state for distribution according to that jurisdiction's relevant requirements. The states agreed to operate the lottery jointly -- including sharing start-up costs and operating expenses. As for the responsibility of paying out prize money, each state is liable for a percentage of its sales proportionate to the total amount of sales. The agreement further provides that the laws of the state will control in the event of any conflict between state law and the Mega Millions agreement. Any
Karr v Pataki, et al., and Park Place Entertainment (Action No. 2)
No. 51 G.B. Smith, J. (dissenting in part):
Article I, § 9 of the New York State Constitution
prohibits the Legislature from enacting legislation authorizing
commercialized gambling and directs the Legislature to pass laws
preventing such gambling. In light of Article I, § 9, the main
issue in this case is whether the Indian Gaming Regulatory Act
("IGRA")(Public Law 100-197, codified at 25 USC § 2701-2721 and
18 USC § 1166-1168) authorizes the Legislature to enact
legislation, e.g., Part B of Chapter 383 of the Laws of 2001,
empowering the Governor to negotiate and enter into compacts with
Indian tribes for the establishment and operation of
commercialized gambling casinos in New York State where such
casinos would ordinarily be impermissible. Based on a review of
the relevant law, IGRA does not authorize the New York State
Legislature to enact such legislation. Accordingly, the
The majority's conclusion, that Part B is
constitutional, fails to adequately consider the plain language
of Article I, § 9, New York's statutory scheme (e.g., the general
municipal and penal laws) which prohibits commercialized
gambling, New York's strong, historical public policy against
such gambling as reflected in making Article I, § 9 a part of the
Bill of Rights of the New York State Constitution. Most
importantly, the majority's conclusion bypasses the citizens of
New York State who have expressed their opposition to commercial
gambling and who have not had their say, one way or the other,
via the amendment process, as to whether the Legislature should
be given the authority to enact legislation allowing for the type
of commercialized, casino gambling contemplated under Part B. I,
The case at bar has its origins in Saratoga County
Chamber of Commerce v Pataki (
In October 2001, the State Legislature met in an
emergency session to consider measures to assist those devastated
by the September 11, 2001 World Trade Center disaster, promote
economic development in the State and generate revenue. Late in
the session, each branch of the Legislature considered an
omnibus, 81-page bill containing 27 distinct parts, including
three parts relating to gambling (Senate Bill 5828, Assembly Bill
During the Senate and Assembly debates on these bills,
legislators discussed a number of items, including, but not
limited to, (1) the process by which the bills came before them
(each bill was accompanied by a message of necessity and an
immediate vote was required after the debate), (2) the relatively
short time that they had to consider the important and wide-
sweeping bills, the proposed gambling provisions, especially Part
B, which were touted as a means of generating revenue and
On October 24 and 25, 2001, the Legislature passed
these bills, which became Chapter 383 of the Laws of 2001. This
case involves a challenge to the constitutionality of Parts B, C
and D of Chapter 383. However, for purposes of this opinion, I
focus on Part B of Chapter 383 of the Laws of 2001 which:
1) provides that the Governor "may execute a tribal-state compact
with the Seneca Nation of Indians pursuant to [IGRA] consistent
On August 18, 2002, the Seneca Nation of Indians
entered into a compact with New York State.
To date, two
On January 29, 2002, the instant declaratory judgment
actions were filed in Supreme Court, Albany County.
After the actions were commenced, Park Place
Entertainment Corporation (now known as Caesars Entertainment,
Inc.) ("Park Place") sought to intervene as a defendant in Action
No. 1. Park Place, which described itself as "one of the world's
largest gaming companies," argued that it has a substantial
interest in ensuring that Part B is upheld as constitutional, and
that it would be adversely affected and bound by any judgment
invalidating Part B of Chapter 383.
Regarding its substantial
In April 2002, the State defendants and Park Place each brought pre-answer motions to dismiss pursuant to CPLR 3211 . The State defendants moved to dismiss the complaint in its entirety and Park Place moved to dismiss the first three causes of action relating to Part B of Chapter 383 of the Laws of 2001. By Order dated October 30, 2002, Supreme Court dismissed the motions in their entirety as premature. Further, on that date, Action Nos. 1 and 2 were consolidated and the parties were permitted to cross-move for summary judgment.
On July 17, 2003, Supreme Court granted summary
judgment in defendants' favor. The court upheld the
constitutionality of Parts B, C and D of Chapter 383, and
dismissed the complaints in their entirety. The court held that
the State Constitution poses no bar to Indian casino gaming in
New York because "New Yorkers have adopted a public policy that
permits considerable gambling, although regulated." In so
holding, the court adopted the Second Circuit's holding in
Mashantucket Pequot Tribe v State of Connecticut (913 F2d 1024
[2d Cir. 1990][ruling that states that allow charities to conduct
class III gaming must negotiate in good faith with a tribe
wishing to do the same]) and the analysis from Judge Read's
On July 7, 2004 , the Appellate Division, Third
Department modified the Supreme Court's order. The court
affirmed the Supreme Court's ruling regarding the
constitutionality of Parts B and D of chapter 383 of the Laws of
2001; however, it declared that Part C was unconstitutional.
Regarding Part B, the court determined that, "pursuant to IGRA, a
state may enter into tribal-state compacts permitting particular
class III, casino-type gaming activities on tribal lands if the
state permits any person to conduct those particular gaming
activities for any purpose, including a charitable purpose. That
a compact permits a certain game to be conducted in a manner that
is otherwise inconsistent with state law will not render it
invalid if the game is not completely prohibited. Because New
York permits the gaming activities at issue here for charitable
purposes, subject to heavy regulation, the gaming is properly the
subject of a tribal-state compact" ( Dalton v Pataki, 11 AD3d 62,
67 (3d Dept. 2004). Moreover, the court held that the Governor
would be able to negotiate tribal-state compacts with Indian
tribes to conduct casino-style gaming on lands that were not
"Indian Lands" at the time of IGRA's enactment if the Governor
concurs with the Secretary of the Interior's determination that
Plaintiffs and defendants appeal and cross-appeal, respectively, pursuant to CPLR 5601 1).
By holding that Part B of Chapter 383 of the Laws of 2001 is constitutional, the majority of this Court and the lower courts have basically held that Congress can require the New York State Legislature to pass a law it ordinarily could not, i.e., a law empowering the Governor to enter an agreement for the establishment of gambling activity that does not comport with this State's Constitution. Since the gambling activity at issue here has not been put before and approved by the citizens of New York as an exception to the general prohibition against gambling set forth in Article I, § 9 of the New York State Constitution, the Legislature cannot pass legislation authorizing the Governor to enter into agreements for the establishment of commercial gambling facilities. Therefore, Part B of Chapter 383 must be set aside as unconstitutional. Background and Purpose of the Indian Gaming Regulatory Act
Congress passed IGRA on October 17, 1988, pursuant to
its power to regulate commerce "with the Indian Tribes" (U.S.
Const., Art. I, § 8, cl. 3) and in response to the United States
IGRA divides gaming on Indian lands into three
Class I games, defined as social games for minimal
IGRA provides , "Class III gaming activities shall be lawful on Indian lands only if such activities are:
(A) authorized by an ordinance or resolution that --
(i)is adopted by the governing body of the Indian
tribe having jurisdiction over such lands,
(ii) meets the requirements of subsection (b), and
(iii) is approved by the Chairman,
(B) located in a State that permits such gaming for any purpose by any person, organization, or entity, and
(C) conducted in conformance with a Tribal-State compact entered into by the Indian tribe and the State under paragraph (3) that is in effect" (25 USC 2710[d]).
In determining whether class III gaming will be allowable on
Indian lands, the tribal-state compacting requirement is of
primary importance under IGRA. However, before discussing this
requirement, it is necessary to examine IGRA's legislative
history regarding compacts because this history makes clear that
Congress: 1) considers a state and Indian tribe engaged in
compact negotiations to be equal sovereigns; 2) considers the
state's interest, in ensuring that its law and public policy are
"States are not required to forgo any State governmental rights to engage in or regulate class III gaming except whatever they may voluntarily cede to a tribe under a compact" ( id. at 14, emphasis supplied).
"Class III -- tribal-State compacts. *** [T]he [Select Committee on Indian Affairs ("Committee")] concluded that the use of compacts between tribes and states is the best mechanism to assure that the interests of both sovereign entities are met with respect to the regulation of complex gaming enterprises such as parimutuel horse and dog racing, casino gaming, jai alai and so forth. The Committee notes the strong concerns of states that state laws and regulations relating to sophisticated forms of class III gaming be respected on Indian lands where, with few exceptions, such laws and regulations do not now apply. The Committee balanced these concerns against the strong tribal opposition to any imposition of State jurisdiction over activities on Indian lands. The Committee concluded that the compact process is a viable mechanism for setting various matters between two equal sovereigns" (S. Rep. No. 100-446, 100th Cong., 2d Sess., Explanation of Major Provisions, at 13). The Senate Report further provides that:
"both State and tribal governments have significant governmental interests in the conduct of class III gaming. States and tribes are encouraged to conduct negotiations within the context of the mutual benefits that can flow to and from tribe and States. This is a strong and serious presumption that must provide the framework for negotiations. A tribe's governmental interests include raising revenues to provide governmental services for the benefit of the tribal
community and reservation residents, promoting public safety as well as law and order on tribal lands, realizing the objectives of economic self-sufficiency and Indian self-determination, and regulating activities of persons within its jurisdictional borders. A State's governmental interests with respect to class III gaming on Indian lands include the interplay of such gaming with the State's public policy, safety, law and other interests, as well as impacts on the State's regulatory system, including its economic interest in raising revenue for its citizens" (id.)(emphasis added). Regarding the Committee's intent, the Senate Report provides
"It is the Committee's intent that the compact requirement for class III not be used as a justification by a State for excluding Indian tribes from such gaming or for the protection of other State-licensed gaming enterprises from free market competition with Indian tribes" (S. Rep. No. 100-446, 100th Cong., 2d Sess., Explanation of Major Provisions, at 13). Further,
With respect to the tribal-state compact requirement,
IGRA provides that an Indian tribe, seeking to conduct class III
gaming on its land, may initiate the compacting process by asking
the state in which the proposed activity is to take place to
engage in negotiations for the purpose of entering a Tribal-State
compact ( see 25 USC 2710[d][A]). When the tribe requests a
"Indian tribes have the exclusive right to regulate gaming activity on Indian lands if the gaming activity is not specifically prohibited by Federal law and is conducted within a State which does not, as a matter of criminal law and public policy, prohibit such gaming activity" (emphasis added).
Based on the foregoing, as long as the proposed class III gaming activity is not prohibited by a state's criminal law and public policy, an Indian tribe can initiate the tribal-state compacting process under which a state is obligated to negotiate in good faith, subject to 25 USC 2710(d)(7). However, in the instant case, the commercialized casino gaming contemplated is prohibited under New York law and public policy.
Because the proposed casino gaming is prohibited under
the New York State Constitution and Penal Law, and such gaming
conflicts with New York State's strong public policy against
commercialized gambling, the Legislature did not have the power
to enact the instant legislation authorizing the Governor to
negotiate and enter into compacts with Indian tribes for the
establishment of "for-profit" casino gaming in New York State.
Moreover, IGRA does not and cannot force or require the
New York's Prohibition Against Commercialized Gambling
New York's Prohibition Against Commercialized Gambling
New York prohibits commercialized gambling, including the for-profit, casino gaming contemplated herein. This prohibition is set forth in the "Bill of Rights" of the New York State Constitution ( see NY Const., Article I, § 9). Article I, § 9 was adopted to "protect *** the family man of meager resources from his own imprudence at the gaming tables" ( see International Hotels Corp. of Puerto Rico v Golden, , 15 NY2d 9, 15  citing Carter and Stone, Proceedings and Debates of the Convention, 567 [Hosford, 1821]). Article I, § 9(1) of the New York State Constitution reads, in pertinent part:
"*** except as hereinafter provided, no lottery or the sale of lottery tickets, pool-selling, bookmaking, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, and except pari-mutuel betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, shall hereafter be authorized or allowed within this state; and the legislature shall pass appropriate laws to prevent offenses against any of the
provisions of this section."(emphasis supplied).
Article I, § 9(2) provides:
"*** any city, town or village within the state may by an approving vote of the majority of the qualified electors in such municipality voting on a proposition therefor submitted at a general or special election authorize, subject to state legislative supervision and control, the conduct of one or both of the following categories of games of chance commonly known as:
(a) bingo or lotto, in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random;
(b) games in which prizes are awarded on the basis of a winning number or numbers, color or colors, or symbol or symbols determined by chance from among those previously selected or played, whether determined as the result of the spinning of a wheel, a drawing or otherwise by chance." Subdivision (2) further provides:
"If authorized, such games shall be subject to the following restrictions, among others which may be prescribed by the legislature:
(1) only bona fide religious, charitable or non-profit organizations of veterans, volunteer firefighter and similar non-profit organizations shall be permitted to conduct such games;
(2) the entire net proceeds of any game shall be exclusively devoted to the lawful purposes of such organizations;
(3) no person except a bona fide member of any such organization shall participate in the management or operation of such game; and
(4) no person shall receive any remuneration for participating in the management or
operation of any such game." Additionally, with respect to subdivision (2):
"Unless otherwise provided by law, no single prize shall exceed two hundred fifty dollars, nor shall any series of prizes on one occasion aggregate more than one thousand dollars. The legislature shall pass appropriate laws to effectuate the purposes of this subdivision [and] ensure that such games are rigidly regulated to prevent commercialized gambling."
Consistent with this provision, the Legislature has outlawed commercialized gambling ( see Penal Law art 225).
In order to give effect to Article I, § 9 of the New
York State Constitution, the Legislature enacted Article 9-A of
the General Municipal Law, New York's "Games of Chance Licensing
Law" ("GML")( see GML §§ 185 et seq.). The stated purpose of
Article 9-A is consistent with New York's legal prohibition and
strong public policy against commercialized gambling. GML 185,
which sets forth the purpose of Article 9-A, provides, in
"*** The legislature hereby declares that the raising of funds for the promotion of bona fide charitable, educational, scientific, health, religious and patriotic causes and undertakings, where the beneficiaries are undetermined, is in the public interest. It hereby finds that, as conducted prior to the enactment of this article, games of chance were the subject of exploitation by professional gamblers, promoters, and commercial interests. It is hereby declared to be the policy of the legislature that all phases of the supervision, licensing and regulation of games of chance and of the conduct of games of chance, should be closely controlled and that the laws and regulations pertaining thereto should be strictly construed and rigidly enforced; that the conduct of the game and all attendant activities should be so regulated and adequate controls so instituted as to discourage commercialization of gambling in all its forms, including the rental of commercial premises for games of chance, and to ensure a maximum availability of the net proceeds of games of chance exclusively for application to the worthy causes and undertakings specified herein; that the only justification for this article is to foster and support such worthy causes and undertakings, and that the mandate of section nine of article one of the state constitution, as amended, should be carried out by rigid regulations to prevent commercialized gambling, prevent participation by criminal and other undesirable elements and prevent the diversion of funds from the purposes herein authorized" (GML 185)(emphasis added).
Similarly, the activities of the body charged with the
administration of New York's Games of Chance Licensing Law, the
New York State Racing and Wagering Board ("Board"), are
consistent with New York's legal prohibition and strong public
"Supervise the administration of the games of chance licensing law and  adopt, amend and repeal rules and regulations governing the issuance and amendment of licenses thereunder and the conducting of games under such licenses, which rules and regulations shall have the force and effect of law and shall be binding upon all municipalities issuing licenses, and upon licensees of the board, to the end that such licenses shall be issued to qualified licensees only, and that said games shall be fairly and properly conducted for the purposes and in the manner of the said games of chance licensing law prescribed and to prevent the games of chance thereby authorized to be conducted from being conducted for commercial purposes or purposes other than those therein authorized, participated in by criminal or other undesirable elements and the funds derived from the games being diverted from the purposes authorized, and to provide uniformity in the administration of said law throughout the state, the board shall prescribe forms of application for licenses, licensees, amendment of licenses, reports of the conduct of games and other matters incident to the administration of such law" (GML 188-a)(emphasis added).
Likewise, GML 186(4) of Article 9-A, pertaining to the types of organizations authorized to conduct games of chance in New York State, reflects New York's strong public policy against commercialized gambling. GML 186(4) provides that:
"'Authorized organization' shall mean and include any bona fide religious or charitable organization or bona fide educational, fraternal or service organization or bona fide organization of veterans or volunteer firemen, which by its charter, certificate of incorporation, constitution, or act of the legislature, shall have among its dominant
purposes one or more of the lawful purposes as defined in this article, provided that each shall operate without profit to its members, and provided that each such organization has engaged in serving one or more of the lawful purposes as defined in this article for a period of three years immediately prior to applying for a license under this article."
It has been argued that the State Legislature had
authority to enact Part B of Chapter 383 of the Laws of 2001
because: 1) since New York allows what is ostensibly class III
gaming for charitable and other purposes, New York must allow the
commercialized, for-profit casino gaming at issue here; and
2) the citizens of New York State, by approving gambling for
charitable and other purposes, have thereby approved class III
commercialized casino gaming. This argument is unavailing
because instead of focusing on whether the New York State
Constitution authorizes the Legislature to pass a law
authorizing the Governor to agree to bring about
unconstitutional, commercialized gambling, this argument
incorrectly focuses on the non-commercial gambling New York State
permits as justification for the contention that New York State
can enter compacts for the establishment of commercialized
gambling facilities on Indian lands. Put another way, this
argument fails to consider the plain language of Article I, § 9
of the State Constitution
and how this constitutional provision
As noted above, Article I, § 9 generally proscribes
gambling except for lotteries where the net proceeds are applied
towards education, pari-mutuel betting on horse races,
games of chance to be engaged in by certain types of
organizations (e.g., non-profit organizations) and conducted for
specific, limited purposes (e.g., charitable). Under Article I,
§ 9, these games of chance are strictly regulated to ensure that
Here, the Legislature, by enacting Part B of Chapter
383, authorized the Governor to execute tribal-state compacts for
the establishment of up to six class III, for-profit casino
gaming facilities on Indian lands and after-acquired lands
pursuant to 25 USC 2719 (b)(1)(A). There is no dispute, and the
majority agrees, that the gaming facilities contemplated under
this legislation (and the gaming and games to be engaged in at
these facilities) are commercial in nature and fall squarely
within the type of commercial gambling activity prohibited under
Article I, § 9.
Moreover, the provisions authorizing the
execution of tribal-state compacts for the establishment of the
above-mentioned prohibited facilities do not comport with Article
In light of this conclusion, that the Legislature had
no power to enact the legislation, the next question that must be
answered is whether IGRA somehow grants the Legislature the
authority to enact Part B of Chapter 383. Respondents' main
argument that the Legislature had the authority to enact Part B
of Chapter 383 is that because the New York State Constitution
permits charitable and other organizations to conduct non-
commercial casino-style gaming in New York State, IGRA requires
that New York must negotiate with Indian tribes to give them the
opportunity to conduct commercial casino-style gaming. In
support of this argument, respondents rely primarily on IGRA's
legislative history regarding the "for any purpose by any person"
provision relating to class II gaming (S. Rep. No. 100-446, 100th
The IGRA provisions and case law cited by respondents
do not provide authorization for this State's Legislature to
enact laws like Part B of Chapter 383. IGRA presupposes that the
New York State Legislature has the authority to enact such
However, nothing in IGRA, not the fact that IGRA
preempts the field in the area of gaming on Indian lands, not the
IGRA-defined role of states in the regulation of gaming on Indian
IGRA states that "Class III gaming activities shall be
lawful on Indian lands only if such activities are located in a
State that permits such gaming for any purpose by any person,
organization or entity" (25 U.S.C. [d][A][ii]). Applying
Justice Steven's reasoning to the instant case, it does not
follow that if a state permits Class III gaming for charitable
purposes, it must permit commercial gambling on Indian lands by
way of a compact in violation of a State's own constitutional
Mashantucket Pequot Tribe v State of Connecticut (737
F. Supp. 169 , aff'd 913 F.2d 1024 ) and California v
Cabazon Band of Indians (480 US 202, supra), two cases heavily
relied on by respondents, do not change this conclusion because
these cases are neither controlling nor applicable. In
Mashantucket, the Pequot Tribe sought to enter into negotiations
with the State of Connecticut to conduct casino-type games of
chance on its reservation. Connecticut's statutory scheme
generally prohibited commercial gambling but permitted non-profit
organizations to conduct "Las Vegas nights" and games of chance
to raise funds for the organizations. At the heart of the
Mashantucket decision was the conclusion of both the district
court and the Second Circuit that Connecticut regulated rather
than prohibited gambling and thus Connecticut was required to
negotiate a compact with the Pequot Tribe. On the other hand,
the instant case involves Article I, § 9 of the New York State
Constitution, a provision which reflects New York's long-standing
policy against the type of commercialized gambling sought to be
With respect to Cabazon, it should be noted that while
IGRA has adopted Cabazon language pertaining to class II and
class III gaming, on the facts and primary issue to be resolved,
Cabazon can be distinguished from the instant case. First,
unlike the instant case, Cabazon involved a state (i.e.,
California) that did not have as clear an anti-gambling policy as
New York. Second, Cabazon involved an Indian tribe's attempt to
operate bingo parlors which, under IGRA, falls under class II
gaming and within Tribal jurisdiction with oversight regulation
by the National Indian Gaming Commission. Moreover, the Senate
Report which accompanied the bill that eventually became IGRA
(i.e., IGRA's legislative history) links language from Cabazon,
Thus, in view of the plain and unambiguous limitation on legislative authority set forth in Article I, § 9 of the New York State Constitution, the State legislature did not have the authority to enact Part B of Chapter 383 of the Laws of 2001. Further, neither IGRA nor any reading of Mashantucket and Cabazon could grant the Legislature such authority. Accordingly, Part B of Chapter 383 must be set aside as void and unconstitutional, including Executive Law § 12 (regarding Governor's authority to enter into tribal-sate compacts) and the amendments to Penal Law § 225.30(a)(1),(b)(regarding the legalization of slot machines for class III gaming purposes).
In affirming the lower court's holding regarding Part B
of Chapter 383, and thereby disregarding the Article I, § 9
Moreover, effectively extending power to IGRA, with regard to the State's Constitution, is improper because the people of New York State, not Congress or the Secretary of the Interior or the State Legislature, approve the State Constitution and any amendments thereto ( see NY Const., Article XIX, § 1). Thus, if the people are not permitted to consider and vote on a subject covered under the State Constitution, their constitutional rights have been violated.
For example, the people have approved certain
exceptions to the State's general ban on gambling, as well as
highly regulated, non-commercial games of chance authorized under
Article I, § 9 of the New York State Constitution and Article 9-A
of the General Municipal Law.
However, the high-stakes
Although under GML § 186(3), other games of chance may
be authorized by the Board, the following games, included in the
instant Tribal-State Compact, have not been authorized as games
of chance under New York law: 1) Baccarat; 2) Carribean Stud
Poker; 3) Keno; 4) Let It Ride Poker; 5) Minibaccarat; 6) Pai bow
poker; 7) Color Wheel 8) Red Dog; 9) Sic Bo; 10) Super Pan; 11)
Casino War; 12) Spanish Black Jack; 13) Multiple Action Black
Jack; and 14) Three Card Poker. These games are not permitted to
be engaged in for any purpose by any person, organization or
entity ( see 25 USC 2710[d][B]). Accordingly, even if New York
State could legally enter into a tribal-state compact, it could
refuse to negotiate with the Seneca Nation of Indians regarding
the Tribe's operation of these unauthorized games ( see e.g.,
Cheyenne River Sioux Tribe v State of South Dakota, 3 F3d 273
[8th Cir. 1993]). Note also that New York State can refuse to
negotiate if the Seneca Nation of Indians wants to operate a game
that is a variation of the authorized game ( id.). Moreover, in
light of the Article I, § 9 limitation to the Legislature's
power, the subject matter of Part B of Chapter 383 clearly falls
This legislation, specifically the portions authorizing the execution of compacts, should first have been put through the amendment process so that the people of New York State could decide whether such compacts for the establishment of high-stakes games or gaming should become permissible under the State Constitution and whether the Legislature can enact legislation authorizing the execution of such compacts. Because the high- stakes commercialized gaming and games, and the provisions regarding the compacts were not put before the people through the amendment process, the rights of New York's citizens have been violated.
Affirming Part B presents another problem regarding the
ability of the people to exercise their collective voice. During
oral argument, State respondent conceded that theoretically,
there would be no legal impediment to having casinos placed in
New York City and Albany as long as the requirements regarding
after-acquired Indian lands held in trust for an Indian tribe
(25 USC 2719[b][A]) are met, specifically, if the Secretary of
the Interior: 1) purchases land in, for example, New York City
and Albany and holds it in trust for Indian tribes; and 2)
determines that a gaming establishment(s) on the newly acquired
lands would be in the best interest of the Indian tribe and its
members, and would not be detrimental to the surrounding
community; and 3) the Governor concurs, there could be
Contrary to the majority's position, Part B of Chapter 383 is not a duly enacted statute because, given the Article I, § 9 limitation on the Legislature's ability to enact legislation empowering the Governor to enter an agreement for the establishment of commercialized gambling, the Legislature did not have the authority to enact Part B. Put another way, since New York's Legislature does not have the constitutional or statutory authority to enact legislation to establish commercialized gambling, it certainly cannot enact legislation empowering the Governor to execute compacts for the sole purpose of establishing casinos where commercialized gambling will take place.
The majority made a number of points pertaining to the
control a state can exert on Indian lands and the validity of
games under a gaming compact, i.e., it noted that, under IGRA,
state laws prohibiting commercialized gambling do not apply on
Indian lands, that a state enjoys more regulatory control over
Indian casino gaming than it would ordinarily, and further, that
regarding such gaming, "state involvement and regulation is to be
favored." However, these points do not consider the step that
necessarily precedes the Governor's negotiation and entering of
Indian gaming compacts, i.e., the legislative authorization held
Finally, in Alden v Maine (527 US 706, 748, 758; 119 S. Ct. 2240; 144 L. Ed. 636 (1999), a case which held that Congress could not require that a State be sued in a State Court, the Supreme Court stated:
Although the Constitution grants broad powers to Congress, our federalism requires that Congress treat the States in a manner consistent with their status as residuary sovereigns and joint participants in the governance of the Nation. *** Congress has vast power but not all power. When Congress legislates in matters affecting the States, it may not treat these sovereign entities as mere prefectures or corporations. Congress must accord States the esteem due to them as joint participants in a federal system, one beginning with the premise of sovereignty in both the central Government and the separate States. Congress has ample means to ensure compliance with valid federal laws, but it must respect the sovereignty of the States."
According to the Alden decision, Congress could not negate a New
York State constitutional policy that goes back over three
Based on the foregoing, Part B of Chapter 383 should be held as void, illegal and unconstitutional, any compact(s), entered into pursuant to Part B of Chapter 383, should be held as void and unenforceable, any casinos opened and operating pursuant to such a compact should be declared unable to continue operations and the Governor and other New York State officials should be declared unable to engage in activities in furtherance of Part B of Chapter 383. Further, I would reverse the lower court decision granting summary judgment on that portion of appellants' complaints pertaining to Part B of Chapter 383 and reinstate those causes of action.
In this case, the Governor and the Attorney General, as
is their right, have seen their duty as requiring them to forego
the New York State Constitution and apply a federal statute.
Normally they would be advocates for the State Constitution. The
result is to leave the People of the State of New York without a
State advocate for a provision in its Bill of Rights. Perhaps,
this Court or the Attorney General should have appointed one. In
any case, while it is clear that the Federal government has
preempted the field in how gaming is to be conducted on Indian
Because I do not agree with the majority's holding regarding Part B of Chapter 383 of the Laws of 2001, I dissent.
Dalton, et al. v Pataki, et al. Karr v Pataki, et al.
No. 51 R. S. Smith, J. (dissenting):
I dissent from the majority's holding that Part C of chapter 383 is constitutional, and would affirm the Appellate Division's holding that it is not. The requirement of article I, § 9 of the Constitution that the net proceeds of a lottery "shall be applied exclusively to or in aid or support of education" can be too easily evaded if the Legislature may require vendors to spend a portion of the funds they receive from the lottery for non-educational purposes of the Legislature's choosing.
The statute as originally enacted provided for a "vendor's fee" to racetracks of between 12% and 25% of the revenue remaining after payment of prizes, and required the vendors to "reinvest" between 35% and 45% of that fee in enhanced purses and a breeding fund. In other words, the Legislature required that between 4.2% and 11.25% of after-prize revenue be devoted to increasing racetrack prizes and breeding horses -- not to the "aid or support of education." The Legislature could not have appropriated lottery funds for racetrack purses or horse breeding, and should not be allowed to accomplish the same end by directing vendors to "reinvest."
To me, the issue is that simple. It is not relevant
that, as the majority notes, other statutes direct racetracks to
The essence of the majority's position is that plaintiffs have not proved that the reinvestment is a device to thwart the constitutional limitation. The majority suggests that the vendor's fee called for by the statute is not inflated by the required reinvestments -- that the fee may be the lowest a vendor would take in any event, and that the reinvestments may be expenditures the racetracks would make anyway. The majority also says that "the Legislature was entitled to determine" that the reinvestment expenditures are a reasonable way to enhance racetrack attendance, and that increased attendance will in turn increase lottery revenues (opinion at 29-30).
I agree that plaintiffs have not proved that the
reinvestment provisions of part C were designed to evade the
constitutional requirement; it is very hard to prove such
evasion, or to disprove it. I also agree with the majority that
"[i]t is generally not for the courts to determine whether a
1 Class III gaming is the most heavily regulated type of gaming under IGRA. The federal regulations give examples of Class III gaming "including but not limited to [a]ny house banking game" such as baccarat or blackjack, casino games including roulette or keno, slot machines, sports betting and lotteries ( see 25 CFR § 502.4).
2 Indian lands are defined as "all lands within the limits of any Indian reservation; and any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power" (25 USC § 2703 ).
3 Although the portion of the legislative history specifically discussing the prohibitory/regulatory distinction was referring to Class II gaming, the applicable language in IGRA is virtually identical with respect to both Class II and Class III gaming ( see 25 USC § 2710 [b][A], [d][B] [gaming is located in a state that otherwise "permits such gaming for any purpose by any person, organization or entity"]). There is no persuasive reason to treat the language in these two sections differently.
4 The Northern Arapaho court noted that there is a conflict in the interpretation of IGRA -- whether a state must negotiate with tribes concerning all forms of Class III gaming when it allows any type of Class III gaming, or whether it must only negotiate for the specific games permitted in the state ( see Northern Arapaho, 389 F3d at 1310-1311). We do not address this issue as the plaintiffs have challenged the authority to enter into tribal-state compacts in general, rather than the authority to negotiate for particular games.
5 The G.B. Smith dissent suggests that the State was not required to negotiate in good faith as the Legislature was without authority to legislate in this area ( see G.B. Smith dissenting op at 21). The constitutional ban on commercial gambling, according to this dissent, cannot be preempted by federal statute and can only be affected through a constitutional amendment. Certainly, if commercial gambling were to be extended to non-Indian lands, the dissent's proposition would be correct, but here we are dealing with the extension of commercial gambling to Indian lands, or lands held in trust by the United States Department of the Interior, to which Congress has seen fit to extend this benefit. This was done with the express intent of protecting Indian sovereignty. The Supremacy Clause of the United States Constitution specifically states that "[t]his Constitution, and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the contrary notwithstanding" (US Const, art VI, § 2). Federal law thus preempts even our constitutional ban. This is particularly true in the context of Indian matters, where a traditional exemption from state law will be "lifted only when Congress has made its intention to do so unmistakably clear" ( Montana v Blackfeet Tribe of Indians, 471 US 759, 765  [referring to Indian exemption from state taxes]).
6 We note that the United States Supreme Court recently addressed whether the Oneida Indian Nation was responsible for property taxes on certain property purchased on land that was once an Oneida reservation ( see City of Sherrill v Oneida Indian Nation of New York, 544 US __, 125 S Ct 1478, 1482-1483 ). The Court determined that the Oneidas could not "unilaterally reassert sovereign control and remove these parcels from the local tax rolls" and that the Tribe would have to follow the procedure set forth in 25 USC § 465, which "authorizes the Secretary of the Interior to acquire land in trust for Indians and provides that the land 'shall be exempt from State and local taxation'" ( City of Sherrill, 544 US at __, 125 S Ct at 1493). This holding is consistent with our interpretation of IGRA, allowing the Secretary and the Governor to authorize gaming on lands held in trust by the Secretary after determining such gaming would not be detrimental to the surrounding community ( see 25 USC § 2719 [b][A]).
7 The only other game offered for video lottery play is electronic keno, which is modeled after the current Lotto and Quick Draw lotteries and involves multiple players selecting a series of numbers, colors or symbols in hopes of matching their selections to those later randomly drawn by the central system.
8 Indeed, although plaintiffs contend that VLTs fit within the Penal Law definition of a slot machine, as "a gambling device which, as a result of the insertion of a coin or other object, operates, either completely automatically or with the aid of some physical act by the player, in such manner that, depending upon elements of chance, it may eject something of value" (Penal Law § 225.00 ), the definition of "[g]ambling device" specifically excludes lottery tickets and other items used to play a lottery ( see Penal Law § 225.00 ).
9 The Attorney General Opinions relied on by plaintiffs in support of their argument that the video lottery is not a lottery are inapposite ( see 1981 Ops Atty Gen No. 68; 1984 Ops Atty Gen No. 1). The 1981 opinion addressed and found unconstitutional proposed video games, such as computer poker and blackjack, that did not involve multiple participation, electronic tickets, or predetermined identification of winning tickets based on random selection. Rather, those games involved a single player pitting his or her skill against a machine. The 1984 opinion involved a proposal by the Division of the Lottery to permit betting on the outcome of professional sports events, which involves an element of skill in picking the winning team or predicting the outcome of the game.
10 This section was amended in 2003 to change the distribution of revenue to allot 10% to the Division and 29% to the track operator as a vendor's fee. The portion of the vendor's fee dedicated to enhancing purses was changed to 25.9% for the first three years, 26.7% for the next two years and 34.5% for each year after that. The percentage of the vendor's fee contributed to the breeding fund was also changed to 4.3% for the first five years and 5.2% for each subsequent year (L 2003, ch 63, Part W, § 2).
11 The recent amendment removes the revenue distribution provisions that required portions of the vendor's fee to be allocated to enhancing purses and an appropriate breeding fund. The new statute increases the vendor's fee to "thirty-two percent for the first fifty million dollars annually, twenty-nine percent for the next hundred million dollars annually, and twenty-six percent thereafter" (L 2005, ch 61, Part CC, § 2, codified at Tax Law § 1612 [b]). The legislation further provides for "an additional vendor's marketing allowance . . . to be used by the vendor track for the marketing and promotion and associated costs of its video lottery gaming operations . . ." (L 2005, ch 61, Part CC, § 2).
12 In this regard, defendants contend that in recent years, since the New York racetracks, facing declining revenues, have been unable to offer large enough purses to attract quality horses, the top horses have been drawn instead to races in other states. Because high-quality horses lead to better-quality racing which in turn attracts more spectators, fewer people have been coming to the New York tracks to bet, resulting in less money spent from which to pay purses, attracting fewer players still. Similarly, breeding funds are used in part to improve the quality of the horses that are bred, and therefore raced, here in New York ( see Saratoga Harness Racing Assn. v Agriculture & New York State Horse Breeding Dev. Fund, , 22 NY2d 119, 123 1968] [breeding funds are "the instrument through which the Legislature has chosen to effectuate [the] legitimate public interest and purpose" of applying a portion of the revenues from racing to the "general improvement of the sport and the facilities used"]).
13 Part C set the vendor's fee at between 12% and 25% of the total revenue wagered less the amount paid for prizes ( see L 2001, ch 383, Part C, § 2). Since the prize payout is to be no less than 90% of total sales ( see L 2001, ch 383, Part C, § 2), the fee amounts to between 1.2% and 2.5% of gross sales.
14 The initial capital investment and continued operating costs of offering video lottery gaming can be significant. The vendor must provide space for the terminals, install and maintain them, and provide increased staff, parking and security for the VLT area. Finger Lakes Racetrack, for example, anticipated its costs of construction, new employees and a variety of other improvements to be nearly $11 million, none of which would be incurred by the State.
15 The 2003 amendment increased the vendor's fee to 29% of total revenue wagered less the amount paid for prizes -- or 2.9% of gross sales ( see L 2003, ch 63, Part W, § 2). The 2005 amendment has increased the vendor's fee to between 2.6% and 3.2% of gross sales, varying as the revenue increases ( see L 2005, ch 61, Part CC, § 2).
16 The other states are Georgia, Illinois, Maryland, Massachusetts, Michigan, Virginia, New Jersey, Ohio and Washington.
17 For example, the Virginia Lottery maintains the grand prize funds and the Georgia Lottery Corporation conducts the actual drawing.
18 Other courts have addressed the constitutionality of a state's participation in a multi-state lottery ( see State ex rel. Ohio Roundtable v Taft, 2003 Ohio App. LEXIS 3042  appeal denied 100 Ohio St 3d 1484; Tichenor v Missouri State Lottery Commission, 742 SW2d 170 [Mo 1988]). Ohio Roundtable specifically addressed the propriety of the Mega Millions agreement against a state constitutional provision allowing "an agency of the state to conduct lotteries" (Ohio Const, Section 6, Article XV; see Ohio Roundtable, 2003 Ohio App. at **9). The court did not find any significant difference between the State contracting with private entities to implement its in-state lottery games and contracting with other states to implement Mega Millions ( Ohio Roundtable, 2003 Ohio App LEXIS 3042, at **18). Ohio retained a sufficient amount of control over the lottery -- since it was conducted in accordance with the State's regulations -- to satisfy the State Constitution ( see Ohio Roundtable, 2003 Ohio App LEXIS 3042, at **21; see also Tichenor, 742 SW2d at 174).
19 In August 2002, pursuant to Part B of Chapter 383, a compact was purportedly entered into by New York State and the Seneca Nation of Indians, resulting in the establishment of the Seneca Niagara Casino and Seneca Allegany Casino. Because the subject legislation authorized the Governor to negotiate and enter into a compact, on behalf of New York State, resulting in the establishment of casinos that conduct gaming prohibited under New York law, this compact must be deemed unenforceable. Moreover, in the absence of a valid compact, the class III casino-style gaming conducted at these facilities is not lawful ( see 25 USC 2710[d][C]; Seminole Tribe of Florida v Florida, 517 US 44 ). Thus, the casinos would have to cease operations with respect to the unlawful gaming activity.
20 This Court noted that IGRA "identifies no particular state actor who shall negotiate the compacts; that question is left up to state law ( see Pueblo of Santa Ana v Kelly, 104 F3d 1546, 1557 [10th Cir. 1997], cert denied 522 US 807 )" ( id.).
21 The Saratoga County Court never reached that question.
22 Under Part B of the proposed legislation, the Governor would receive the authority to enter into tribal-state compacts for the establishment of up to six new casinos on Indian lands. Under Part C, the Division of the Lottery ("Division") would be permitted to license the operation of video lottery terminals at pari-mutuel racetracks. Under Part D, the Division would be allowed to participate in any joint, multi-jurisdiction, out-of- State lottery game adopted in accordance with the existing statutory requirements for Lottery planning and reporting.
23 For example, Senator Duane referred to gambling as a "tax on the poor."
24 Under the MOU, up to three "Class III" casinos were provided for. One was to be located in Niagara County in the City of Niagara Falls. One was to be located in Erie County in the City of Buffalo. Finally, the MOU provided for "the establishment of "Class III" gaming on current reservation territory, should the Nation at some point in the future decide to pursue such a facility, with the precise location to be determined by the Nation at such later date" (R. 156-57).
25 Here, the Indian tribes have not been determined and the casino locations were not specified.
26 The Tribal-State Compact states, in pertinent part:
"This Compact is made and entered into between the Seneca Nation of Indians, a sovereign Indian nation ('Nation') and the State of New York ('State') pursuant to the provisions of *** [IGRA]. ***
NOW, THEREFORE, the NATION and the STATE, consistent
with the Memorandum of Understanding between the State
Governor and the President of the Seneca Nation of
Indians executed on June 20th 2001, and in
consideration of the undertakings and agreements
hereinafter set forth, hereby enter into this Class III
The defendants in both actions were: 1) Governor George Pataki, the State of New York, the New York State Racing and Wagering Board, Arthur J. Roth, as Commissioner of Tax and Finance of the State of New York, Division of the Lottery, New York State Comptroller H. Carl McCall, New York State Racing Association, Finger Lakes Racing Association, Yonkers Racing Corporation, Mid- State Raceway, Inc. and Monticello Raceway Management, Incorporated.
Note, by Stipulation of Discontinuance dated November 21, 2002, both actions were discontinued with prejudice only as to defendant H. Carl McCall.
28 When asked about its interest in this matter during oral argument, Park Place noted that under IGRA, Indian tribes may enter into management contracts with experienced companies, like Park Place, to assist in managing the Indian gaming operations. Park Place also noted that a stated purpose of IGRA is to promote the economic development of the tribe, that the monies generated from the gaming activities are used towards that end, and that it is in the tribe's interest to affiliate themselves with experienced management companies.
29 Park Place asserted that in March 2001, "the Mohawks filed a Land-Into-Trust application with the Bureau of Indian Affairs of the U.S. Department of the Interior to have 66 acres of the Kutsher's land under option to Park Place taken into trust for the Mohawks to be used for Indian gaming purposes" (R.312). According to the record, this application is still pending.
30 It is telling that one of the largest casino developers/operators/managers has intervened in this suit. Companies, like Park Place, who have or are in the process of developing Indian casinos in New York State stand to lose quite a bit of money if Part B of Chapter 383 is struck down and they are unable to: 1) recoup their initial investment in the development of the casinos; and 2) reap the benefits (e.g., management fees) for operating and/or managing the open casinos.
31 According to Judge Read, "IGRA mandates that, if a state allows any class III gaming by any person, a tribe may seek to conduct the same games on its lands" ( Saratoga County, 100 NY2d at 842).
32 That is, Executive Law § 12 and the amendments to Penal Law § 225.30(a)(1),(b) must be set aside as unconstitutional.
33 IGRA also attempts to regulate the gaming so as to avoid "corrupting influences" and seeks to ensure that the Indian tribes are the primary beneficiaries of the gaming ( see 25 USC § 2702).
34 "The term 'Indian lands' means -- (A) all lands within the limits of any Indian reservation; and (B) any lands title to which is either held in trust by the United States for the benefit of any Indian tribe or individual or held by any Indian tribe or individual subject to restriction by the United States against alienation and over which an Indian tribe exercises governmental power" (25 USC 2703). Generally, gaming on lands acquired after October 17, 1988 by the Secretary of the Interior and "held in trust for the benefit of an Indian tribe," except for "lands located within or contiguous to the boundaries of [an Indian reservation]," is not permitted (25 USC 2719 [a]). However, IGRA authorizes gaming on Indian lands acquired after October 17, 1988 if the Secretary of the Interior, "after consultation with the Indian tribe and appropriate State and local officials, including officials of other nearby Indian tribes, determines that a gaming establishment on newly acquired lands would be in the best interest of the Indian tribe and its members, and would not be detrimental to the surrounding community, but only if the Governor of the State in which the gaming activity is to be conducted concurs in the Secretary's determination" (25 USC 2719[b][A]).
35 According to its legislative history, IGRA "is intended to expressly preempt the field in the governance of gaming activities on Indian lands" (S. Rep. No. 100-446, 100th Cong., 2d Sess., Statement of Policy, at 6). However, with regard to class III gaming, Congress contemplated that such gaming on Indian lands would only be permissible if states and Indian tribes employed a system of compacts for the regulation of such gaming ( id.). Under this system of compacts, the federal government cedes regulatory oversight authority as to class III gaming conducted on Indian lands and permits states and Indian tribes to jointly regulate such gaming. This system exists so that the respective interests of the state and Tribe (i.e., two equal sovereigns) will be taken into account. Moreover, there can be no class III gaming on Indian lands without a valid tribal-state compact ( see 25 USC § 2710[d][C]) in a state that permits the specific gaming, set forth in the compact, for any purpose by any person, organization, or entity ( see 25 USC § 2710[d][B]). Thus, through tribal-state compacts, states maintain "some measure of authority over gaming on Indian lands" ( Seminole Tribe, 517 US at 58).
36 IGRA provides that, "The United States district courts shall have jurisdiction over any cause of action initiated by an Indian tribe arising from the failure of a State to enter into negotiations with the Indian tribe for the purpose of entering into a Tribal-State compact under [25 USC 2710(d)(3)(A)] or to conduct such negotiations in good faith" (25 USC 2710[d][A][i]). Note, the United States Supreme Court has held that the Indian Commerce Clause does not grant Congress the power to abrogate the states' sovereign immunity from suit through 25 USC 2710(d)(7), "and therefore, § 2710(d)(7) cannot grant jurisdiction over a State that does not consent to be sued" ( Seminole Tribe, 517 US at 47).
Further, where an Indian tribe introduces evidence that it requested a state to enter compact negotiations more than 180 days before, no tribal-state compact was entered into, and the state did not respond to the Indian tribe's request for compact negotiations or did not respond in good faith, the burden of proof shifts to the state to prove that it negotiated in good faith ( see 25 USC 2710[d][B][i],[ii]).
"[I]f the court finds that the state has failed to negotiate in good faith ***, the court shall order the State and  Indian [t]ribe to conclude such a compact within a 60-day period" (25 USC 2710[d][B][iii]). Further, "If a State and Indian tribe fail to conclude a Tribal-State compact [after 60 days], the Indian tribe and the State shall each submit to a mediator appointed by the court a proposed compact that represents their last best offer for a compact. The mediator shall select *** the one which best comports with [IGRA and other applicable Federal law]" and submit the selected compact to the State and Indian tribe. (25 USC 2710[d][B][iv],[v]). "If a State consents to [the] proposed compact [within 60 days of the mediator's submission of the proposed compact to the State], the proposed compact shall be treated as a Tribal-State compact (25 USC 2710[d][B][vi]). However, "If the state does not consent [within 60 days], the mediator shall notify the Secretary [of the Department of the Interior] and the Secretary shall prescribe, in consultation with the Indian tribe, procedures  consistent with the proposed compact selected by the mediator ***, [IGRA], and the relevant [state law], and under which class III gaming may be conducted on the Indian lands over which the Indian tribe has jurisdiction" (25 USC 2710[d][B][vii]; see 25 CFR part 291).
37 Because the instant gaming activity is prohibited, the State is under no obligation to negotiate in good faith.
38 For example, Penal Law § 225.05 provides, "A person is guilty of promoting gambling in the second degree when he knowingly advances or profits from unlawful gambling activity." Moreover, pursuant to Penal Law § 225.00(4), "A person 'advances gambling activity' when, acting other than as a player, he engages in conduct which materially aids any form of gambling activity. Such conduct includes but is not limited to conduct directed toward the creation or establishment of the particular game, contest, scheme, device or activity involved, toward the acquisition or maintenance of premises, paraphernalia, equipment or apparatus therefor, toward the solicitation or inducement of persons to participate therein, toward the actual conduct of the playing phases thereof, toward the arrangement of any of its financial or recording phases, or toward any other phase of its operation."
39 "When language of a constitutional provision is plain and unambiguous, full effect should be given to 'the intention of the framers *** as indicated by the language employed" and approved by the People" ( Matter of King v Cuomo, , 81 NY2d 247 )(citations omitted).
While it is true that "[t]he legislative power of this state shall be vested in the senate and assembly" (NY Const., Article III, § 1), this Court has stated:
"It needs no citation of authorities to sustain the postulate, that except as restrained by the Constitution, the legislative power is untrammeled and supreme, and that a constitutional provision which withdraws from the cognizance of the legislature a particular subject, or which qualifies or regulates the exercise of legislative power in respect to a particular incident of that subject, leaves all other matters and incidents under its control. Nothing is subtracted from the sum of legislative power, except that which is expressly or by necessary implication withdrawn" ( In re Application of Thirty-Fourth St., Ry. Co., 102 NY 343 ).
40 Under IGRA, this activity would be categorized as class III gaming. Because this specific activity is a constitutional exception set forth in Article I, § 9, the Legislature could enact a law authorizing the Governor to negotiate and ultimately enter into a compact with an Indian tribe only for the establishment of a facility where pari-mutuel betting on horse races would be conducted.
41 Because Article I, § 9 prohibits these activities, the Legislature is restrained from passing laws allowing such activities ( see e.g., Blue Cross and Blue Shield v McCall, , 89 NY2d 160 ). Further, since Article I, § 9 does not set forth a procedure authorizing the Legislature to add further exceptions to it, it must be concluded that no such practice exists under this constitutional provision ( see e.g., Matter of King, 81 NY2d at 252). If no such practice exists, the Legislature may not legislate as if such practice does exist ( id.).
42 The types of gaming and games (Games) to be conducted at the for-profit casinos provided for under Part B of Chapter 383 are reflected in Appendix A to the instant Tribal-State Compact. As indicated above, the Compact was to be consistent with the June 20, 2001 MOU. According to the MOU, the types of gaming to be conducted are those types of games already included in the Mohawk and Oneida gaming compacts. Thus, some of the games listed in the instant Tribal-State Compact, including baccarat, blackjack, craps and roulette are the same as those listed in the Mohawk Compact. Regarding the games authorized under the Mohawk compact, the Third Department stated "that the commercialized Las Vegas style gambling authorized by the compact is the antithesis of the highly restricted and 'rigidly regulated' (NY Const., Art. 1, § 9) forms of gambling permitted by the [New York State] Constitution and statutory law and New York's established public policy disfavoring gambling (citations omitted)" ( Saratoga County, 293 AD2d 20, 24, [3d Dept., 2002])(emphasis added).
43 Since Article I, § 9 limits the Legislature's ability to pass legislation to establish a prohibited commercialized gambling facility, it necessarily limits the Legislature's ability to pass legislation authorizing the State to enter into an agreement for the establishment of a prohibited commercialized gambling facility.
44 According to IGRA's legislative history, "The phrase 'for any purpose by any person, organization or entity' makes no distinction between State laws that allow class II gaming for charitable, commercial, or governmental purposes, or the nature of the entity conducting the gaming. If such gaming is not criminally prohibited by the State in which tribes are located, then tribes, as governments, are free to engage in such gaming."
45 Respondents' argument, although supported by IGRA's legislative history, leads to an odd result. In Cabazon, the Supreme Court upheld a similar argument. However, Justice Stevens had reservations akin to my own, i.e., that the argument makes little sense. In a dissenting opinion, written by Justice Stevens and joined by Justice O'Connor and Justice Scalia, Justice Stevens wrote that:
"Today the Court seems prepared to acknowledge that an Indian tribe's commercial transactions with non-Indians may violate 'the State's public policy.' ***. The Court reasons, however, that the operation of high-stakes bingo games does not run afoul of California's public policy because the State permits some forms of gambling and, specifically, some forms of bingo. I find this approach to 'public policy' curious, to say the least. The State's policy concerning gambling is to authorize certain specific gambling activities that comply with carefully defined regulation and that provide revenues either for the State itself or for certain charitable purposes, and to prohibit all unregulated commercial lotteries that are operated for private profit. To argue that the tribal bingo games comply with the public policy of California because the State permits some other gambling is tantamount to arguing that driving over 60 miles an hour is consistent with public policy because the State allows driving at speeds of up to 55 miles an hour" ( Cabazon, 480 US at 224-25).
46 One problem with IGRA presupposing that a particular state has the authority to enact legislation similar to Part B is that no two states have exactly the same history regarding gambling or motivations behind why all, some or no gambling is proscribed, or why a particular state chose to prohibit gambling via statute, city ordinance or Bill of Rights provision.
47 Indian nations are sovereign and IGRA allows states, through the compacting process, to gain a measure of control over gaming on Indian lands ( see Seminole Tribe).
48 IGRA's focus is on the compact requirement, not on a legislature's power, or lack thereof, to enact legislation in a given area. Similarly, this Court's decision in Saratoga County focused on whether the Governor had authority to compact, rather than on whether the Legislature's ability to legislate was thwarted by a constitutional limitation.
49 General Municipal Law § 186(3) provides:
"'Games of chance' shall mean and include only the games known as "merchandise wheels", "coin boards", "merchandise boards", "seal cards", "raffles", and "bell jars" and such other specific games as may be authorized by the board, in which prizes are awarded on the basis of a designated winning number or numbers, color or colors, symbol or symbols determined by chance, but not including games commonly known as "bingo or lotto" which are controlled under article fourteen-H of this chapter and also not including " bookmaking", "policy or numbers games" and "lottery" as defined in section 225.00 of the penal law. No game of chance shall involve wagering of money by one player against another player." The Board has authorized other "games of chance" including: 1) Craps; 2) Roulette; 3) Black Jack; 4) Big Six; 5) Big Nine; 6) Money Wheel; 7) Color Wheel; 8) Merchandise Wheels; 9) Chuck-A- Luck; 10) Hazard; 11) Under and Over Seven; 12) Beat the Dealer; 13) Bang; 14) Joker Seven; 15) Horse Race Wheel; 16) Best Poker Hand; 17) Bell Jar; 18) Fruit Wheel; 19) Card Wheel; and 20) Raffles ( see 9 NYCRR §§ 5620.3 - 5620.22).
50 For example, Black Jack, a regulated, "authorized game of chance" ( see 9 NYCRR 5620.5), that was approved by the people of New York, is materially different from the game played at the Seneca Niagara Casino. One major difference is the maximum bet amount. The maximum bet for the "authorized" game is $5.00 or its equivalent in chips ( id.). Meanwhile the maximum bet for the "same" game at the Seneca Niagara Casino is $2,500.00, 500 times the amount of the regulated, "authorized" game ( see Park Place Brief at 24). It is clear that the people of New York State did not approve "this" game of Black Jack.