Card Clubs Fight Tribal Gambling

In a case that could threaten California’s booming Indian gambling business, attorneys for four Bay Area card clubs urged a federal judge Friday to overturn the ballot measure that granted tribes a monopoly on operating Nevada-style casinos in California.

If the card rooms are victorious, the proposition approved by voters last year and compacts signed by Gov. Gray Davis authorizing gambling on tribal land could be tossed out, raising serious questions about the legality of the roughly 40 casinos on reservations from Humboldt to San Diego counties.

Attorneys, tribal representatives, gambling foes and others packed the courtroom of U.S. District Judge David F. Levi. Lawyers for card rooms and the state and federal governments argued for more than two hours over whether Proposition 1A violates the federal Indian Gaming Regulatory Act and the U.S. constitutional guarantee of equal protection.

Arguing on behalf of four card rooms and two bingo parlors, attorney James Hamilton said under federal law tribes can operate only those games permitted elsewhere in the state. Since slot machines and card games such as Nevada-style blackjack are illegal under state law, tribes in California either cannot operate their casinos, or equivalent casinos must be permitted in the rest of the state, Hamilton said.

Levi opened the hearing by telling the lawyers that none of his questions was intended to “telegraph” his view of the case, then proceeded to ask questions that put lawyers for both sides on the defensive.

“You take somewhat of an all-or-nothing position,” Levi told Hamilton--to which the attorney replied that his position jibes with what Congress intended when it approved the Indian gambling act in 1988.

“That’s fairly startling,” Levi said. “It’s either Nevada-style gaming in California or no gaming.”

The card rooms, led by Artichoke Joe’s in San Bruno, say they have lost business as Indians have expanded their casinos. Although most tribal casinos are outside major population centers, Artichoke Joe’s is especially alarmed by efforts of the Lytton Band of Pomo Indians, a small group without tribal land, to win federal and state approval to open a casino in San Pablo, north of Oakland.

California’s tribes, which were not sued by the card rooms, are seeking the right to intervene, contending that state and federal government cannot adequately represent their interests. And since tribes are sovereign and cannot be sued, lawyers for the Indians contend that the card rooms’ suit must be thrown out.

In a written brief, the card rooms summed up their argument: “Stripped to its core, this lawsuit asks a basic question with important implications: May the state of California, with the approval of the secretary of the Interior, grant Indian tribes exclusive, monopolistic rights to conduct Nevada-style gaming in California--or does this exclusivity, as plaintiffs contend, violate both federal statutory law and the equal protection guarantees of the U.S. Constitution?”

Card club lawyers argue that the state’s decision to approve casinos on tribal land while barring other Californians from operating slot machines is “a classification grounded on race or ethnic origin that violates the equal protection guarantees of the 5th and 14th amendments.”

The state’s decision to grant tribes a monopoly on casinos would be like the government giving Indians the exclusive right to operate car dealerships or oil refineries, the lawyers said.

But Assistant U.S. Atty. Edmund Brennan countered that “it’s not an all-or-nothing situation.”

He defended the gambling initiative and the U.S. Interior Department’s decision last year to approve the compacts negotiated by Davis and leaders of 61 of California’s more than 100 tribes.

Brennan was joined by U.S. Justice Department and Interior Department attorneys from Washington and by California deputies attorney general. “California doesn’t have to become a Nevada-style gambling state in order to permit it on Indian land,” he said.

In an argument that brought a quizzical response from Levi, Brennan said the federal Indian gambling act permits the state to authorize gambling on tribal land because the act contains no specific prohibition on such an action.

“Your argument becomes circular,” Levi said, adding that the judge could, for example, permit the lawyer to switch places with him and wear a judge’s robes, but that Levi’s permission would not make such an act legal.

Courts already have struck down one Indian casino measure in California, Proposition 5 of 1998. That initiative sought to create a statute allowing gambling on tribal land. The California Supreme Court voided it, concluding that the measure violated a state constitutional provision that specifically bars Nevada-style gambling in California.

That ruling in 1999 prompted Davis to negotiate a deal with tribes placing Proposition 1A on the March 2000 ballot. Unlike in the Proposition 5 effort--the most costly state campaign in U.S. history at more than $90 million--there was little organized opposition to last year’s measure, though tribes spent more than $21 million to ensure that it passed.

Approved by a margin of 65% to 35%, Proposition 1A amended the state Constitution, allowing tribes to operate Nevada-style casinos on their reservations.

Appointed to the U.S. District Court in Sacramento in 1990, Levi, 50, has handled other major cases, among them a challenge to an initiative that sought to create an open primary system in which voters could vote for any candidate, regardless of their party affiliation. Levi upheld the initiative, although the U.S. Supreme Court struck it down last year.

Before being appointed to the bench, Levi was U.S. attorney in Sacramento.