West Flagler Associates v. Haaland: An Attempt to Game the Indian Gaming Regulatory Act

by Matthew Dorfman*

In 2021, the Seminole Tribe of the State of Florida and the State of Florida signed a gaming compact that was tacitly approved by Secretary of the Interior Deb Haaland. The compact allowed the Seminole Tribe to operate an online sports gambling application throughout the State by deeming the location of all gaming activity as having taken place exclusively on Native lands. This Contribution argues that the meaning of the word “on” as derived from ordinary usage and from usage under similar statutory circumstances precludes the perspective adopted by the Seminole Tribe and the State of Florida, and thus requires the Secretary of the Interior to reject the gaming compact.

It begins with a seemingly innocuous question: what does it mean to be “on” something? The Seminole Tribe of Florida (hereinafter the “Seminole Tribe”), with the consent of Secretary of the Interior Deb Haaland (hereinafter “Secretary”), has attempted to stretch the meaning of “on” as used in the Indian Gaming Regulatory Act (hereinafter the “IGRA”) in order to allow them to promote online sports gambling.¹ The IGRA gives Native tribes exclusive regulation rights for gaming activities which take place “on Indian lands.”² The Seminole Tribe has attempted to extend its exclusive jurisdiction through the creation of an online sports gambling application which purports to allow patrons to place bets throughout the State of Florida—regardless of whether the patron is physically present on Native lands.³ However, this interpretation of the IGRA is inconsistent with both the ordinary meaning of the word “on” and the word’s meaning as it has been used under similar statutory circumstances.

Congress enacted the IGRA in October 1988 in response to a growing trend of gaming activity taking place on Native lands.⁴ The IGRA declares, inter alia, 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.”⁵ This provision has “create[d] a framework for regulating gaming activity on Indian lands.”⁶ Largely, it has served as a safe harbor for Native tribes who have sought to promote their own economic independence through gaming on “Indian lands”⁷ as a commercial activity.⁸

In recent years, the language of § 2705(5) has come under greater scrutiny. The specific phrase “on Indian lands” has led to litigation in West Flagler Associates v. Haaland.⁹ At issue in West Flagler Associates is a 2021 gaming compact (the “Compact”) between the State of Florida and the Seminole Tribe which “authorizes the Tribe to offer online sports betting throughout the State, including to bettors located off tribal lands.”¹⁰ In August 2021, the Secretary tacitly approved this compact by not exercising her power to strike it down.¹¹ Notably, except where Native tribes have exclusive jurisdiction to regulate gaming activity, sports gambling is otherwise prohibited throughout the State of Florida.¹²

The Compact goes even further in an attempt to circumvent a requirement that the bettor placing their wagers be physically on Native land by deeming any bets placed on an electronic device as having taken place “exclusively where received.”¹³ Three other states—Michigan, New Jersey, and Rhode Island—have enacted laws which deem online wagers as having been placed at the location of the servers which handle the online transaction.¹⁴ The Secretary argues that the perspective put forth by these states and the Compact reflects a modern understanding of online gaming regulation.¹⁵

The Tribe and Secretary’s interpretation is a legal fiction out of step with the general understanding of gaming law. In other contexts, an activity involving two distinct entities that are not located in the same place results in the act having taken place at both locations. As the Tenth Circuit noted in United States v. Tomeo, placing a wager is akin to agreeing to a contract since both wagers and contracts require mutuality or a meeting of the minds.¹⁶ Thus, a bet must be legal both where it is initiated and where it is received; otherwise, this would lead to absurd results. “If a bet merely had to be legal where it was received, a bettor could place an illegal bet . . . from anywhere in the United States, so long as the bet was legal in the jurisdiction hosting the servers for a game.”¹⁷

While the existence of the statutes in Michigan, New Jersey, and Rhode Island demonstrates that other states have adopted this legal fiction, it also manifests the intent of the remaining state legislatures to not adopt that legal fiction. It illustrates that legislatures are fully capable of specifying where online sports wagers are deemed to have taken place. Further, the fact that the legislatures of those three states felt the need to articulate this legal fiction indicates that their perspective is not naturally derived from the phrase “on Indian lands.” Otherwise, there would have been no need to pass legislation to clarify their state’s position.

While analyzing a statute which utilized similar language, the Nebraska Supreme Court in State ex rel. Stenberg v. Omaha Exposition & Racing, Inc. held that when the parties to a gambling activity are not physically together, the activity is deemed to have taken place at the location of each of the parties.¹⁸ In Stenberg, a racetrack enabled patrons to place bets using telephonic wagering whereby an individual can wager by calling the racetrack and having an employee place the bet for them on the caller’s account.¹⁹ The underlying statute which enabled the state to grant gaming licenses required that any parimutuel betting must take place at the racetrack enclosure.²⁰ The court invalidated Omaha’s telephonic wagering system, holding that “the instructions to place the wager must originate from within the licensed racetrack enclosure” in order for the gaming activity to have taken place at—or on—the racetrack enclosure.²¹

The ordinary meaning of the statute’s phraseology also requires courts to impute a physical presence standard. Although the phrase “on Native lands” is not itself used in common conversation, it can be compared to a phrase such as “on premises,” as both phrases use the word “on” as it relates to a physically defined area of land. Imagine a statute which prohibited the use of firearms except for when people are “on premises” of a gun range. If a person were to walk across the street and fire their gun at a target which is located on the premises of the gun range, common sense dictates that the off-premises shooter would be in clear violation of the statute. Still, the Secretary and the Seminole Tribe insist that the similar facts of West Flagler should result in a conclusion that defies that common sense understanding of “on.”²² Although the bets from the mobile application were received at the casino, and the bullet hit the target at the gun range, in neither scenario would the person sending the bet or shooting the gun be considered to be “on” the required area of land.

However, if the statutory language is deemed to be ambiguous, then Native tribes would be given the upper hand. The Supreme Court in Montana v. Blackfeet Tribe of Indians instructed other courts to liberally construe ambiguous statutes in favor of Native tribes.²³ Therefore, if the phrase “on Indian lands” is determined to be ambiguous as to whether the statute imposes a physical presence requirement, the interpretation adopted by the Native tribe shall prevail. This creates an additional obstacle for those arguing against the interpretation put forth by the Seminole Tribe. If the Seminole Tribe can convince a judge that there is genuine ambiguity, then they may be entitled to the Blackfeet presumption. ²⁴

Even so, the Blackfeet presumption may still yield to Chevron deference.²⁵ As it stands, the distinction is irrelevant since Secretary Haaland has interpreted the statute in the same way as the Seminole Tribe.²⁶ However, if any future Secretary of the Interior disagreed with Secretary Haaland’s and the Seminole Tribe’s interpretation, then the courts would have to determine which canon of construction trumps the other, assuming that they found an ambiguity in the statute.

The district court in West Flagler held that the IGRA’s language was not ambiguous and that the Compact had violated the IGRA’s terms by extending the Seminole Tribe’s exclusive jurisdiction to areas not “on Indian lands.”²⁷ Compacts which violate the IGRA’s terms must be rejected by the Secretary of the Interior.²⁸ The court explicitly rejected the legal fiction suggested by the Secretary and by the Seminole Tribe, observing that “[w]hen a federal statute authorizes an activity only at specific locations, parties may not evade that limitation by ‘deeming’ their activity to occur where it, as a factual matter does not.”²⁹ The court’s interpretation complies with the common meaning and statutory usage of the word “on,” thus making it likely that its decision will be affirmed in the case’s ongoing appeal. However, if the Seminole Tribe manages to poke a hole large enough to create an ambiguity, this would enable the Seminole Tribe—and Native tribes across the country—to operate online gambling applications free from the regulation of their home states.

* Matthew Dorfman is a J.D. Candidate (2023) at New York University School of Law. This Contribution arose from the problem presented at the 2022 Schreck Gaming Law Moot Court Competition hosted by University of Nevada Las Vegas William S. Boyd School of Law. The question presented was whether gaming activity can be deemed as having taken place exclusively on Native lands when a bettor places an online sports wager on a server located on Native lands while not physically present on Native lands. This Contribution presents one of the assigned arguments, and the views expressed do not necessarily represent the views of the author.

1. See W. Flagler Assocs. v. Haaland, No. 21-cv-2192 (DLF), 2021 WL 5492996, at *1–2 (D.D.C. 2021).

2. Indian Gaming Regulatory Act, 25 U.S.C. § 2701(5) (2000).

3. W. Flagler Assocs., 2021 WL 5492996, at *1.

4. Indian Gaming Regulatory Act, Nat’l Indian Gaming Comm’n, https://www.nigc.gov/general-counsel/indian-gaming-regulatory-act.

5. Indian Gaming Regulatory Act, 25 U.S.C. § 2701(5) (2000) (emphasis added).

6. Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 785 (2014).

7. Indian Gaming Regulatory Act, 25 U.S.C. § 2703(4) (defining “Indian lands” as those lands “within the limits of any Indian reservation,” “held in trust by the United States for the benefit of any Indian tribe,” or “over which an Indian tribe exercises governmental power”).

8. Cheyenne Haslett and Laura Romero, For Tribes, Casinos Fund What the Government Doesn’t. Now They’re Closed, ABC News (Apr. 9, 2020, 1:36 PM), https://abcnews.go.com/Politics/tribes-casinos-fund-government-doesnt-now-closed/story?id=70371212 (reporting that revenue from tribal casinos fund programs that the government fails to cover such as “provid[ing] school clothes for children, support for the elderly and health care for thousands”).

9. 2021 WL 5492996.

10. W. Flagler Assocs., 2021 WL 5492996, at *1.

11. Id.; see Indian Gaming Regulatory Act, 25 U.S.C. § 2710(d)(8)(C) (“If the Secretary does not approve or disapprove a compact . . . before the date that is 45 days after the date on which the compact is submitted to the Secretary for approval, the compact shall be considered to have been approved by the Secretary . . . .”).

12. See Fla. Stat. § 849.14 (2020).

13. W. Flagler Assocs., 2021 WL 5492996, at *2 (“The Compact . . . provides that all in-state wagers on sporting events ‘shall be deemed . . . to be exclusively conducted . . . where the sports book(s) . . . are located,’ even those that are made ‘using an electronic device’ ‘by a Patron physically located in the State but not on Indian lands.’”) (quoting Compact § III(CC)(2)); see also Compact § IV(A) (providing that “wagers on Sports Betting . . . shall be deemed to take place exclusively where received”).

14. See Mich. Comp. Laws Ann. § 432.304(2) (West 2019); N.J. Stat. Ann. § 5:12-95.20 (West 2013); 42 R.I. Gen. Laws Ann. § 42-61.2-1(21) (2022).

15. W. Flagler Assocs., 2021 WL 5492996, at *10.

16. 459 F.2d 445, 447 (10th Cir.), cert. denied 409 U.S. 914 (1972); see also Brief for the United States of America as Amicus Curiae Supporting Appellee, AT&T Corp. v. Coeur d’Alene Tribe, 295 F.3d 899 (9th Cir. 2002) (No. 99-35088), 1999 WL 33622333, at *13 (“A contractual transaction, requiring mutuality or a meeting of the minds, presupposes the existence and application of two minds.”).

17. California v. Iipay Nation of Santa Ysabel, 898 F.3d 960, 965 (9th Cir. 2018).

18. 644 N.W.2d 563, 571 (Neb. 2002) (declaring the practice of “telephonic wagering” a violation of the Nebraska State Constitution).

19. Id. at 566.

20. Id.; see also Rice v. Connolly, 488 N.W.2d 241, 247 (Minn. 1992) (“In its literal sense, the word ‘on’ as part of the phrase ‘on-track’ is more precisely defined as ‘at’ to denote a location for the placement of a . . . bet.”).

21. Stenberg, 644 N.W.2d at 571.

22. 2021 WL 5492996.

23. 471 U.S. 759, 766 (1985) (holding that Montana could not tax Indian royalty interests arising out of leases executed after the adoption of the Indian Mineral Leasing Act).

24. Compare Navajo Nation v. Dep’t of Health & Hum. Servs., 325 F.3d 1133, 1136 n.4 (9th Cir. 2003) (holding that the Blackfeet presumption did not apply where the underlying statute was unambiguous), with United States v. Santa Fe Pac. R.R., 314 U.S. 339, 354 (1941) (applying the Blackfeet presumption after finding an ambiguity).

25. Compare, e.g., Williams v. Babbitt, 115 F.3d 657, 663 n.5 (9th Cir. 1997) (deferring to agency interpretation under Chevron notwithstanding pro-Native presumption), and Seldovia Native Ass’n, Inc. v. Lujan, 904 F.2d 1335, 1342 (9th Cir. 1990) (same), with Ramah Navajo Chapter v. Lujan, 112 F.3d 1455, 1461–62 (10th Cir. 1997) (holding that Blackfeet trumps Chevron), and Albuquerque Indian Rts. v. Lujan, 930 F.2d 49, 59 (D.C. Cir. 1991) (same).

26. W. Flagler Assocs., 2021 WL 5492996, at *1.

27. Id. at *1–2.

28. Id. at *9 (citing Amador Cnty. v. Salazar, 640 F.3d 373, 382 (D.D.C. 2011) (holding that IGRA imposes “an obligation on the Secretary to affirmatively disapprove any compact” that is inconsistent with its terms).

29. Id.