Court fogs reservation gaming rule

Friday, March 29, 1996 | 11:59 a.m.

THE U.S. Supreme Court left many attorneys shaking their heads this week as it tried to clarify what Congress couldn't -- where the states stand on the thorny issue of Indian gaming.

The court ruled that tribes cannot force states to accept reservation gaming through federal litigation. The ruling at first seemed to end more than a century of federal free rein over Indian reservations and was hailed as a victory for states' rights.

But now there are second thoughts. Transferring appeal powers of the secretary of the Interior has left some experts saying the ruling was a victory for the tribes. With those powers in doubt, states must be wondering if any of their laws can be enforced on reservation lands.

For years, states have been chafing under an Indian Gaming Act ruling that forced them to accept reservation gaming if state officials did not show "good faith" in negotiations. That effectively barred state authority.

Four years ago, Connecticut officials refused to negotiate with a tribe over a proposed bingo parlor and landed in federal court. After the state lost the case, the tribe constructed Foxwoods, a full-blown hotel-casino, despite a statewide prohibition against casino gaming. After that ruling, it was open season for Indian casinos nationwide.

The states have found themselves hamstrung in efforts to limit Indian gaming. While other areas were under strict state control or prohibition, Indian gaming was running wild, with little regulation from the Bureau of Indian Affairs. The result has been abuse, criminal infiltration and illegal siphoning of casino funds.

Giving the Interior secretary the power to arbitrate disputes between states and tribes opens the door to politicking and injects uncertainty into jurisdictional issues. Interior Secretary Bruce Babbitt has favored Indian gaming as giving reservations economic independence. But the next administration's secretary may not.

Gaming investors won't like that uncertainty. Nor will they like the idea that a state on the losing side of an Interior Department decision could sue in federal court and tie up the process for years.

Nevada Sens. Richard Bryan and Nevada Harry Reid have been trying for four years to clarify the Indian Gaming Act to give it reasonable enforcement powers. Now, with the court opening the possibility of more unchecked casino development on reservations, the need for reform is greater than ever.

And time may be running out. The impending federal investigation into the proliferation of gaming will be looking at Indian casinos as possibly the worst examples in the nation. The sad state of Indian gaming regulation would give anti-gamers, particularly the religious right, a foot in the door.

That bodes ill for the rest of the industry, particularly in Nevada where gaming has been tightly regulated and relatively clean for years. Federal regulation and taxation could be next.

Federal intervention into gaming could damage the good with the bad in the nation's fastest-growing industry and place a pall on what has been an amazing pace of development in Las Vegas.

Congress must establish realistic guidelines on jurisdiction and regulation. It also must set up enforcement machinery to ensure Indian gaming doesn't become an unregulated nightmare. Otherwise, the entire industry could be irreparably damaged.