Maverick Gaming LLC Mounts Legal Challenge to Washington’s Sports Betting Framework, Indian Gaming Regulatory Act

On January 11, 2022, Maverick Gaming LLC (Maverick), a non-tribal cardroom and casino operator, initiated a lawsuit in D.C. federal court challenging Washington state’s sports betting framework, which grants federally-recognized Indian tribes the right to offer sports betting (and certain other class III games), but makes it illegal for non-tribal entities to engage in such activity.

By way of background, in March 2020, Washington enacted legislation authorizing sports betting “on a very limited basis” by permitting federally-recognized Tribes to amend their tribal-state gaming compacts to include sports betting. In 2021, Washington Gov. Jay Inslee executed compact amendments authorizing sports betting with 16 tribes. It is otherwise illegal, pursuant to Washington’s “professional gambling” law, to conduct sports betting operations.

In Maverick’s complaint, the company argues Washington’s gambling laws and compact amendments establish a “tribal monopoly” over sports betting that violates the Indian Gaming Regulatory Act (IGRA). Maverick maintains that IGRA permits class III gaming activities on Indian lands only when the state also allows non-tribal entities to engage in those gaming activities. Maverick argues further that Washington’s gambling laws and compact amendments violate the U.S. Constitution’s guarantee of equal protection under the law because they establish a race-based preference for federally-recognized Indian tribes. Maverick insists this race-based preference could not withstand strict scrutiny or even rational basis review because it concerns commercial gaming activities that bear no relation to “uniquely tribal interests.”

If successful, Maverick’s challenge to Washington’s sports betting framework could have a significant impact on the tribal gaming landscape nationwide, imperiling the numerous tribal-state gaming compacts granting exclusive class III gaming rights to federally-recognized tribes in states across the country.

In its complaint, Maverick also takes aim at IGRA, arguing the federal law violates the anti-commandeering clause of the Tenth Amendment because it “orders” state governments to partake in negotiations over tribal-state gaming compacts with federally-recognized tribes. The Tenth Amendment’s anti-commandeering clause provides the federal government is only authorized to exercise those powers delegated to it. IGRA provides, in pertinent part, that upon receiving a request from a federally-recognized tribe, a state “shall negotiate with the Indian tribe in good faith to enter such a compact.” 25 U.S.C. § 2710(d)(3)(A). Maverick insists this negotiation provision amounts to a “direct order” from Congress and asserts that because the powers delegated to Congress did not include the authority to issue direct orders to state governments, IGRA violates the anti-commandeering clause.

If successful, Maverick’s challenge to IGRA could have broad ramifications; an order invalidating IGRA on constitutional grounds would likely nullify hundreds of tribal-state gaming compacts executed under the law, thereby halting most (if not all) class II and class III gaming operations on Indian lands. That said, such an outcome seems unlikely, given federal courts have rejected similar Tenth Amendment challenges to IGRA in the past. See, e.g., Estom Yumeka Maidu Tribe of the Enter. Rancheria of Cal. v. California , 163 F. Supp. 3d 769 (E.D. Cal. 2016); Cheyenne River Sioux Tribe v. South Dakota, 3. F.3d 273 (8th Cir. 1993). These courts have held that IGRA, when read as a whole, does not force state government to execute tribal-state gaming compacts, and therefore does not violate the anti-commandeering clause.

Maverick’s lawsuit is captioned, Maverick Gaming, LLC v. United States of America et al, No. 1:22-cv-00068-FYP (D.C. Cir. 2022).

We will continue to monitor this litigation and provide updates regarding significant developments.

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