United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2000 Decided November 3, 2000
No. 98-5516
Diamond Game Enterprises, Incorporated and
The Cheyenne and Arapaho Tribes of
Oklahoma Gaming Commission, on behalf of the
Cheyenne and Arapaho Tribes of Oklahoma,
Appellants
v.
Janet Reno, Attorney General, et al.,
Appellees
Consolidated with
99-5345
Appeals from the United States District Court
for the District of Columbia
(No. 97cv00452)
---------
James E. Townsend argued the cause for appellants. With
him on the briefs were David W. McElroy, Munford Page
Hall, II, Virginia W. Boylan and Stephen A. Lenske. Philip
Baker-Shenk entered an appearance.
Leander Bergen, Geoffrey M. Standing Bear and Andrew
W. Baldwin were on the brief for amici Pueblo of San Juan,
et al.
John T. Stahr, Attorney, U.S. Department of Justice, ar-
gued the cause for the Federal appellees and Jonathan A.
Glogau, Special Counsel, State of Florida, argued the cause
for the State appellees. With them on the joint brief were
Lois J. Schiffer, Assistant Attorney General, U.S. Depart-
ment of Justice, David C. Shilton and Edward J. Passarelli,
Attorneys, and Sara J. Drake, Supervising Deputy Attorney
General, State of California. Jared A. Goldstein, Attorney,
U.S. Department of Justice, entered an appearance.
Before: Ginsburg, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge: This case requires us to determine
whether a gambling machine known as the Lucky Tab II, an
electromechanical device that dispenses paper pull-tabs and
then displays their contents on a video monitor, should be
classified under the Indian Gaming Regulatory Act as a Class
II "aid" or a Class III "facsimile." The Act prohibits Indian
tribes from operating Class III facsimiles without first negoti-
ating a compact with the state. Applying the statute's plain
language, guided by our only relevant precedent, Cabazon
Band of Mission Indians v. NIGC, 14 F.3d 633 (D.C. Cir.
1994), and proceeding without any views from the agency
charged with the Act's implementation, we conclude that the
Lucky Tab II is a Class II aid.
I
The Indian Gaming Regulatory Act of 1988 ("IGRA"), 25
U.S.C. s 2701-19, regulates gambling operations run by Indi-
an tribes. The Act's purpose is to "provide a statutory basis
for the operation of gaming by Indian tribes as a means of
promoting tribal economic development, self-sufficiency, and
strong tribal governments." 25 U.S.C. s 2702(1).
The Act divides Indian gaming into three classes, each
requiring a different level of authorization. Class I gaming
consists of social games played solely for prizes of minimal
value as well as traditional forms of Indian gaming. See 25
U.S.C. s 2703(6). Indian tribes may operate Class I games
as they wish. See 25 U.S.C. s 2710(a)(1).
Class II gaming includes bingo, and if conducted in the
same hall as bingo, it also includes lotto, punch boards, and
tip jars, as well as pull-tabs, the game at issue here. See 25
U.S.C. s 2703(7)(A). In language central to the dispute in
this case, the Act allows the use of "electronic, computer, or
other technologic aids" in connection with Class II games, 25
U.S.C. s 2703 (7)(A)(i), but prohibits the use of "[e]lectronic
or electromechanical facsimiles of any game of chance." 25
U.S.C. s 2703 (7)(B)(ii). Tribes may conduct Class II gaming
if the state in which they are located permits such forms of
gambling and if the governing body of the tribe adopts a
gaming ordinance that is then approved by the Chairman of
the National Indian Gaming Commission, the agency created
by Congress to implement IGRA. See 25 U.S.C. ss 2710(b),
2704.
Class III gaming includes all gambling not covered by
either Class I or Class II, including "facsimiles" of Class II
devices. See 25 U.S.C. s 2703(8). In order to conduct Class
III operations, tribes must obtain state approval through
negotiation of a tribal-state compact. See 25 U.S.C.
s 2710(d)(1).
Commission regulations define Class II aids and Class III
facsimiles. An aid is "a device ... that when used ... [i]s
not a game of chance but merely assists a player or the
playing of a game [and] is readily distinguishable from the
playing of a game of chance on an electronic or electrome-
chanical facsimile." 25 C.F.R. s 502.7. A facsimile is "any
gambling device as defined in [the Johnson Act]." 25 C.F.R.
s 502.8. Predating IGRA by more than 30 years, the John-
son Act prohibits the use of gambling devices on federal land,
in interstate commerce, and in "Indian country." See 15
U.S.C. ss 1171-78 (1953). Both the Commission's regula-
tions and this Court have interpreted IGRA as limiting the
Johnson Act prohibition to devices that are neither Class II
games approved by the Commission nor Class III games
covered by tribal-state compacts. See Cabazon, 14 F.3d at
635, n.3 (noting that IGRA repealed the Johnson Act with
regard to Class III devices subject to a tribal-state compact
but that there is no other repeal of the Johnson Act in IGRA,
implying that Class II aids, permitted under IGRA, do not
run afoul of the Johnson Act).
This case concerns a game known as pull-tabs. A small,
two-ply paper card, a pull-tab bears symbols and patterns
similar to tic-tac-toe that appear when players peel off the
pull-tab's top layer. The pattern of the symbols determines
whether the player wins a prize. In the traditional pull-tabs
game, bingo hall clerks sell pull-tabs from counters or mobile
carts, and winners present the tabs to either clerks or cash-
iers to collect prizes. Pull-tabs are sold from large pools
known as "deals." Containing anywhere from 1200 to 100,000
pull-tabs, deals have a fixed number of winners and losers.
At issue in this case is the proper classification of a
gambling device known as the Lucky Tab II, an electrome-
chanical dispenser of paper pull-tabs. The machine dispenses
pull-tabs from a roll containing approximately 7500 tabs.
About 100 rolls comprise a deal, within which winning pull-
tabs are randomly distributed. The machine cuts the pull-tab
from the roll and drops it into a tray. A bar code scanner
inside the machine automatically reads the tab and then
displays its contents on a video screen. A placard on the
machine informs players that "[v]ideo images may vary from
actual images on pull tabs. Each tab must be opened to
verify." To collect prizes, players must present the actual
winning tab to a clerk. In many bingo halls, players pur-
chase pull-tabs either from a Lucky Tab II or from clerks; in
such cases, machines and clerks cut pull-tabs from rolls that
are part of the same deal.
In 1994, the Kickapoo Traditional Tribe of Texas and
Diamond Game Enterprises, the manufacturer of the Lucky
Tab II, asked the Commission to classify the machine as a
Class II aid. Two years passed without Commission action.
In August 1996, the Kickapoo Tribe began operating approxi-
mately 100 Lucky Tab II machines. At this point, the record
becomes complicated and, to say the least, confusing. As far
as we can tell, the following events of significance to this case
transpired: The Commission's Director of Enforcement ad-
vised the Tribe that the machines were Class III gambling
devices that could only be operated pursuant to a tribal-state
compact. See Diamond Game Enterprises, Inc. v. Reno, 9 F.
Supp. 2d 13, 15 (D.D.C. 1998). Notwithstanding the Di-
rector's action, the members of the Commission were appar-
ently divided over the proper classification of the Lucky Tab
II, some thinking it an aid and others a facsimile. Because of
this disagreement, the Commission sought advice from the
Department of Justice, but DOJ lawyers were themselves
divided over the proper classification of the machine. See
Memorandum from Deputy Assistant Attorney General Rich-
ard Shiffrin to Associate Deputy Attorney General Seth P.
Waxman, at 1 (June 13, 1996) (noting that the Office of Tribal
Justice and the Criminal Division had reached opposite con-
clusions on the appropriate classification of the Lucky Tab
II--the former concluding that it falls under Class II and the
latter concluding that it belongs in Class III). The Commis-
sion never formally responded to the request to classify the
Lucky Tab II.
According to the Tribe and Diamond Game, certain mem-
bers of the Commission recommended that the Tribe and the
company file a declaratory judgment action in federal court to
resolve the issue. Acting on that advice, they filed this action
in the U.S. District Court for the District of Columbia seek-
ing, among other things, a declaratory judgment that the
machine qualifies as a Class II aid. The Cheyenne and
Arapaho Tribes of Oklahoma intervened as plaintiffs. Ala-
bama, California, and Florida intervened as defendants.
The parties filed cross motions for summary judgment.
Finding that the Lucky Tab II "performs all the functions
that a player of the traditional pull-tab game would have
performed," the district court found the machine to be a Class
III facsimile and granted summary judgment to the govern-
ment. See Diamond Game, 9 F. Supp. 2d at 20. Subse-
quently, Diamond Game and the Tribes filed a Rule 60(b)
motion, claiming that the company had made technical
changes to the Lucky Tab II. Finding that the modifications
were not new evidence, the district court denied the motion.
II
Unlike the legal issues presented in this case, the policy
questions are both interesting and challenging. In determin-
ing the proper classification of the Lucky Tab II, how do we
further Congress' objective of allowing Indian tribes to use
gaming as a means of "promoting tribal economic develop-
ment, self-sufficiency, and strong tribal governments," 25
U.S.C. s 2702(1), while at the same time "shield[ing] [Indian
tribes] from organized crime and other corrupting influ-
ences," 25 U.S.C. s 2702(2)? Will the Lucky Tab II enable
tribes to "take advantage of modern methods of conducting
class II games"? S. Rep. No. 100-446, at 9 (1988). Or does
the machine increase the risk of corruption or excessive
gambling losses, concerns that government counsel told us at
oral argument require its classification as a Class III device?
To resolve such issues, Congress created the National Indian
Gaming Commission, headed by a Chair appointed by the
President and confirmed by the Senate presumably for his or
her expertise on Indian gaming. Yet whether because of
bureaucratic gridlock or, as the tribes allege, because of
congressional interference, we have no idea what the Com-
mission thinks about the policy questions presented by the
Lucky Tab II. Not only does this leave us with no agency
position to which we might defer, see Chevron U.S.A. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 844
(1984) ("[A] court may not substitute its own construction of a
statutory provision for a reasonable interpretation made by
the administrator of an agency"), but the Commission's IGRA
regulations provide no assistance in interpreting the statute.
Boiled down to their essence, the regulations tell us little
more than that a Class II aid is something that is not a Class
III facsimile. We mention this not to escape our duty to
decide this case--to the contrary, because we have jurisdic-
tion, we must determine how the Lucky Tab II should be
classified--but to highlight the fact that we have no choice
but to proceed without the benefit of a Commission position, a
situation we expect Congress neither anticipated nor would
appreciate. That said, we turn to the parties' arguments
about the classification of the Lucky Tab II. See Everett v.
United States, 158 F.3d 1364, 1367 (D.C. Cir. 1998) ("We
review a grant of summary judgment de novo.").
Diamond Game and the Tribes contend that the Lucky Tab
II acts as a permitted "electronic aid" to the Class II game of
pull-tabs. They emphasize that the machine's operation de-
pends entirely on pre-printed paper pull-tabs that can be (and
in fact are) played without the mechanical dispenser. The
Lucky Tab II, in other words, cannot function without rolls of
paper pull-tabs. The Tribes also emphasize that despite the
fact that the Lucky Tab II presents a video image of the
contents of the pull-tabs it dispenses, the machine does not
give the player the final word on the game; players must still
peel off the top layer to verify its contents and present it to a
clerk to receive their winnings. For all of these reasons, they
argue, the Lucky Tab II cannot be considered a facsimile of
the paper game of pull-tabs.
According to the government, because the machine mirrors
the traditional game played by purchasing cards from clerks,
it is a Class III facsimile, not a Class II aid. The government
embraces the district court's description of the Lucky Tab II:
"When the participant plays the Lucky Tab II, she is not
playing the pull-tabs inside the machine; she is engaging the
machine that replicates the functions of the traditional pull-
tab game." Diamond Game, 9 F. Supp. 2d at 13, 20. As to
the possibility that the information on the video screen might
be inaccurate, the government says mistakes are rare and for
all practical purposes, the Lucky Tab II is a duplicate of the
paper version.
Both sides claim support from Cabazon Band of Mission
Indians v. NIGC, 14 F.3d 633 (D.C. Cir. 1994). There, we
held that a video pull-tabs game was a "computerized ver-
sion" of pull-tabs and therefore a Class III facsimile. The
machine "randomly selects a card for the gambler, pulls the
tab at the gambler's direction, and displays the result on the
screen. The computer version, like the paper version, has a
fixed number of winning cards in each deal." Cabazon, 14
F.3d at 635. Finding that video pull-tabs "exactly repli-
cate[s]" the game of pull-tabs in computer form, Cabazon
concluded that it amounted to a facsimile of the game. See
id.; see also Sycuan Band of Mission Indians v. Roache, 54
F.3d 535, 541-42 (9th Cir. 1994) (holding that a self-contained
unit containing a computer linked to a video monitor and a
printer constitutes an electronic facsimile of pull-tabs).
We think the Lucky Tab II is quite different from the
machine at issue in Cabazon. To begin with, the Lucky Tab
II is not a "computerized version" of pull-tabs. Although the
Lucky Tab II has a video screen, the screen merely displays
the contents of a paper pull-tab. Instead of using a computer
to select patterns, the Lucky Tab II actually cuts tabs from
paper rolls and dispenses them to players. In other words,
the game is in the paper rolls, not, as in the case of the
Cabazon machine, in a computer. Indeed, players using the
Lucky Tab II often play a deal simultaneously with other
players in the same hall who have chosen to purchase pull-
tabs from clerks. For players using the Lucky Tab II, the
machine functions as an aid--it "helps or supports," or "as-
sists" the paper game of pull-tabs. Webster's Third New
International Dictionary 44 (1993). Without the paper rolls,
the machine has no gaming function at all. It is, in essence,
little more than a high-tech dealer. Viewed this way, the
game played with the Lucky Tab II is not a facsimile of paper
pull-tabs, it is paper pull-tabs.
Another difference between the Lucky Tab II and the video
machine at issue in Cabazon reinforces our belief that the
Lucky Tab II should be classified as a Class II aid. The
Cabazon machine plays the game of pull-tabs in its entirety,
dispensing receipts for players to redeem winnings. By
contrast, the Lucky Tab II dispenses actual paper pull-tabs
that players must peel and display to a clerk before they can
obtain prizes. Although the machine's scanner apparently
commits few errors when reading paper pull-tabs, the fact
remains that unlike the Cabazon machine, the Lucky Tab II
is technically not final. It is, in other words, an aid to the
game of pull-tabs.
Notwithstanding the differences between the Lucky Tab II
and the machine at issue in Cabazon, the government insists
that the Lucky Tab II is a Class III device. At oral
argument, the government even asserted that removing the
video screen would not convert the Lucky Tab II into a Class
II aid. Asked what in the government's view would be an
aid, counsel pointed us to an electronic scanner called the
"Tab Force Validation System." As we understand this
device, after a clerk dispenses a paper pull-tab, instead of
peeling off the top layer, the player inserts the pull-tab into
the machine, which scans the bar code and displays the
results on a video screen. The Commission has issued advi-
sory opinions classifying the Tab Force and other similar
machines as Class II aids, concluding that the systems "sim-
ply read the pull-tabs and display whether or not they are
winners.... [They] cannot change the outcome of the
game." See NIGC Advisory Opinion, at 2 (June 8, 1998).
We see no principled difference between the Tab Force and
the Lucky Tab II. Both devices electronically "read" paper
pull-tabs and display their contents on a screen, and neither
can "change the outcome of the game." Unlike the machine
involved in Cabazon, neither contains an internal computer
that generates the game. Rather, both machines facilitate
the playing of paper pull-tabs. They are thus Class II aids.
The government makes two additional arguments in sup-
port of its position that the Lucky Tab II is a Class III
facsimile. First, like the district court, it relies on language
from a Senate Indian Affairs Committee report describing a
Class II aid as a device that enables tribes to "take advantage
of modern methods of conducting class II games" by, for
example, "join[ing] with other tribes to coordinate their class
II operations and thereby enhance the potential of increasing
revenues." S. Rep. No. 100-446, at 9 (1988). Class II aids
are thus limited to devices that "merely broaden the potential
participation levels and [are] readily distinguishable from ...
electronic facsimiles in which a single participant plays a
game with or against a machine rather than with or against
other players." Id. Unlike computers, cables, or telephone
lines that connect bingo games on different reservations--
examples the Senate Report gives of aids that expand partic-
ipation--the Lucky Tab II, the government argues, neither
increases participation levels nor enhances competition among
players. Second, the government claims that the Lucky Tab
II makes it easier for players to play pull-tabs, thus increas-
ing the potential for players to "lose the rent money."
These statutory interpretations, resting as they do on the
policy underlying IGRA, are interesting and might even be
worthy of Chevron two deference had they been offered by
the Commission. But they come only from appellate coun-
sel--indeed the "lose-the-rent" argument surfaced for the
first time at oral argument. Moreover, nothing in the Senate
Report suggests that an electronic device must link players
on different reservations to qualify as a Class II aid. Accord-
ingly, because of the similarities between the Lucky Tab II
and the Tab Force Validation System, which the Commission
has found to be a Class II aid, and because of the differences
between the Lucky Tab II and the Class III device at issue in
Cabazon, we reverse the district court and remand with
instructions to enter summary judgment for appellants. In
view of this disposition, we have no need to address the
district court's denial of the Rule 60(b) motion.
So ordered.