In a recent decision, U.S. Judge Kirtan Khalsa ruled six New Mexico tribes do not owe the state more than $60 million for “free play” at their casinos. Tribal attorney Richard W. Hughes said, “It’s a common sense observation that it makes no sense to claim revenue sharing based on something that is not, in fact, revenue.”
The original lawsuit was filed by the Pueblo of Isleta, Pueblo of Sandia and Pueblo of Tesuque in June 2017. Pueblo of Santa Ana, the Pueblo of Santa Clara and the Pueblo of San Felipe later joined the suit.
New Mexico is the only state where the Bureau of Indian Affairs has not approved or rejected any tribe operating under a casino under a Class III gaming compact. Their required payments are higher but they do not receive anything meaningful in return. As a result, the compacts are considered to be legal and in effect as long as their provisions are consistent with the Indian Gaming Regulatory Act.
Khalsa wrote, “The pueblos did not agree to the disputed revenue, and the additional revenue sharing payments defendants seek do not satisfy the requirements of IGRA, i.e., they are not payments made pursuant to a bargained-for and agreed-upon compact provision for which meaningful concessions were offered in return. Lacking any authorization under IGRA, defendants’ claims for such payments from the Pueblos constitute an impermissible attempt to impose a tax, fee, charge or other assessment.
“The court further finds that defendants’ claims for additional revenue sharing violate the ‘per se rule’ prohibiting states from taxing federally recognized Indian tribes without express Congressional authorization,” Khalsa ruled.
