Court OKs phone lottery sales

Margie Mason

Wednesday, March 20, 2002 | 9:57 a.m.

SAN FRANCISCO -- An Indian tribe in Idaho can sell lottery tickets to buyers off the reservation via a toll-free number provided by AT&T Corp., a federal appeals court said Tuesday.

The 9th U.S. Circuit Court of Appeals reversed a U.S. district court's ruling that AT&T was not responsible for providing toll-free phone numbers to the Coeur d'Alene Tribe for the lottery.

AT&T withheld service after being contacted by several state attorneys general who said they would take action against the phone company for violating gaming laws if it provided the service.

"I am very, very enthused," said David Matheson, CEO of the Coeur d'Alene Casino and Resort Hotel. "I can't wait to talk to the tribal council about what we're going to do next."

The federal appeals court found that the tribal court that first took the case did not have jurisdiction to resolve the dispute, but that the lottery was not illegal under the Indian Gaming Regulatory Act.

As required by the gaming act, the tribe entered into a compact with the state of Idaho that was approved by the U.S. Secretary of the Interior in 1993. The tribe launched its lottery in March 1997.

The compact itself didn't specify that lottery tickets would be sold over the telephone and the Internet, but a contract between the tribe and Unistar Entertainment Inc., the company managing the lottery, made that part of the deal clear, the opinion said. That contract was approved by the chairman of the National Indian Gaming Commission.

Attorneys general in 37 states asked the commission to shut down the lottery. They argued the gambling must take place at the location where the game is being offered. But the tribe said the transactions took place on the reservation in Worley, Idaho, even if the players were not physically present.

The tribe sought to operate the lottery, but was unable to get AT&T service and later sued the phone company to provide the lines. The lottery was instead run for about a year through a local telephone service in Idaho, but stopped operating about two years ago when a U.S. district judge ruled against the tribe in December 1998, Matheson said.

He argued that some 1,000 Internet sites worldwide provide similar gambling, so "why they picked on the little Coeur d'Alene Tribe was always perplexing to us," he said. The tribe is made up of about 1,800 members.

The appeals court wrote that the states challenging the tribal lottery were doing so for their own self-interest.

"The 30-plus states that have briefed this court as amici -- most of which operate their own lotteries -- have the biggest stake in challenging the validity of the tribe's lottery," the opinion said.

Circuit Judges James R. Browning, Betty B. Fletcher and Ronald M. Gould issued the opinion. Gould wrote a partial dissenting opinion.

Because the Indian Gaming Regulatory Act "governs only gambling on Indian lands, it neither permits nor prohibits tribe-sponsored gambling off Indian lands," Gould wrote. "Thus, a statement that the IGRA does not prohibit a national lottery does not mean that the IGRA authorizes such a lottery."

The states against the tribal lottery were Minnesota, Florida, Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Massachusetts, Michigan, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Utah, Vermont, Virginia, Washington, West Virginia and Wyoming.