Running Aces Updates Lawsuit Against Minnesota Tribal Casinos With Additional Alleged Federal Law Violations

Erik Gibbs

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Running Aces Casino, Hotel & Racetrack in Columbus, Minnesota filed a lawsuit in February against a number of tribal casinos in the state, and this week, it added more casinos and more alleged violations of federal and state laws.

The original lawsuit targeted the Treasure Island Resort & Casino and the Grand Casinos in Hinckley and Mille Lacs. This week, as reported by the Star Tribune, Running Aces added Mystic Lake and Little Six casinos, which belong to the Shakopee Mdewakanton Sioux Community.

For decades, tribal casinos and certain politicians have been falsely perpetuating that they are entitled to an exclusive right on gaming in the state of Minnesota, including electronic video games of chance.

— Running Aces CEO and President Taro Ito

Running Aces alleges that these tribal casinos are offering games not authorized under state law. The lawsuit claims that the casinos have multiple “illegal and unfair competitive advantages” over them.

Tribes allegedly violating IGRA

One of the main points of contention is the offering of Class III games in state compacts that aren’t authorized by the Indian Gaming Regulatory Act (IGRA) of 1988. The act provided a legal framework for the operation and regulation of gaming on Native American lands.

IGRA categorizes gaming into three classes: Class I includes traditional tribal games with minimal prizes; Class II covers games like bingo and non-banking card games; and Class III encompasses casino-style gaming. The latter requires tribal-state compacts approved by the respective state and the secretary of the interior.

The compacts limit casinos to offering slot machines and blackjack, according to Running Aces. However, the lawsuit says the casinos have offered games, including blackjack and Ultimate Texas Hold’em, in violation of their compacts.

Running Aces also alleges that the tribal casinos are offering video slots and video games of chance. These, it asserts, violate state laws. The casino asked the court for an injunction to stop what it views as illegal gambling. It seeks to recover an unspecified amount in damages and an injunction against the alleged illegal activities in the future.

Sensitive times for Minnesota gambling

The lawsuit was filed under the federal Racketeer Influenced and Corrupt Organizations (RICO) Act. The RICO Act is best known for federal criminal cases involving organized crime. However, the plaintiff’s attorneys also cite the law as a basis for civil lawsuits that have nothing to do with organized crime.

This lawsuit comes at a time when the Minnesota legislature is considering legalizing sports betting that would give tribes exclusive rights. That bill, SF 3803, is reportedly on the agenda for discussion by House lawmakers Wednesday.

It also coincides with a move by the state House of Representatives to ban historical horse racing (HHR) gambling. That initiative began last week after 500 HHR machines were approved by the Minnesota Racing Commission. Rep. Zack Stephenson has vowed to do everything in his power to ensure the bill passes.

The outcome of the lawsuit and the sports betting legislation could have far-reaching implications for tribal gaming nationwide. At a minimum, the next chapter in the legal saga promises to be a defining moment for the relationship between Minnesota’s tribal nations and the state government.