Managing Editor
The federal government has asked the Supreme Court to reject a petition from Maverick Gaming, Washington’s foremost poker operator, in a suit over the state’s tribal sports betting monopoly. Maverick was recently forced to close some of its cardrooms amid bankruptcy proceedings. It has blamed the state’s cardroom regulations for its financial difficulties, but also wanted to see cardrooms included in Washington sports betting as a secondary source of revenue.
Tribes hold the exclusive rights to casino gaming in Washington State. In 2020, Washington legislators passed a bill allowing the tribes to renegotiate their gaming compacts to include sports betting. That was politically simpler than trying to pass a commercial sports betting bill, which the tribes would likely have opposed.
Maverick has been fighting state and federal officials for years over that. It has argued that tribal exclusivity is discriminatory and, more importantly, that the Indian Gaming Regulatory Act (IGRA) itself is unconstitutional. That means a lot could be at stake if the Supreme Court agrees to hear the case.
The federal defendants in the case filed their brief in August arguing against a Supreme Court hearing. Their position is that there is an important issue at play, but that the same issue has also arisen in other cases, and that Maverick is not the plaintiff best situated to make the argument. In part, that is because of its ongoing financial difficulties.
Why the Ninth Circuit Dismissed Maverick’s Case
Lower courts never considered the case on its merits. They dismissed it after an intervention by the Shoalwater Bay Tribe, which employed a legal Catch-22 to argue that the case couldn’t continue. Tribes, as sovereign nations, enjoy immunity from being named as defendants in a lawsuit. At the same time, a suit cannot legally proceed if its outcome will directly affect the interests of a third party not named in the case, unless one of the existing parties adequately represents those interests. Maverick argued, without success, that the state and federal defendants were adequately aligned with the tribes to represent their interests.
The Supreme Court could overturn the Ninth Circuit’s decision, forcing the case to proceed. However, it agrees to hear fewer than 10% of the petitions it receives.
The federal defendants present four arguments for why the Supreme Court should select a different case to explore whether this sort of tribal intervention is valid. Three of those involve technical legal details of the case and alternative options available to Maverick. However, the recent bankruptcy proceedings provide the fourth argument: That Maverick may not be in a financial position to see the case through to its conclusion.
Why Maverick’s Sports Betting Challenge Matters
The case has received considerable attention because of the ramifications if Maverick were to win. The odds seem to be against the cardroom operator, as recent Supreme Court rulings have generally been favorable to tribal sovereignty. Even if the Supreme Court justices do return the case to the lower courts, it would still just eliminate Shoalwater’s intervention. Maverick could end up losing the underlying case.
But because of the nature of Maverick’s arguments, the case is about more than just Washington sports betting. It’s about the entire framework of tribal gaming in the United States. Much has also been made of the fact that Maverick’s legal team includes Ted Olson, whose arguments were instrumental in bringing down the Professional and Amateur Sports Protection Act (PASPA), which had kept sports betting illegal outside Nevada until 2018. That was a game-changer, but bringing down IGRA would be nothing short of Earth-shattering—and potentially devastating to tribes who rely on gaming for their economic well-being.
One key stipulation of IGRA is that if a state allows any party the right to offer a form of gaming, it must negotiate in good faith with any tribes that want to offer gaming as well. The argument made by Maverick and Olson is that this violates the Tenth Amendment.
The Tenth Amendment is terse, reading:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Hypothetically, if the courts found that compacts signed under IGRA amounted to unconstitutional coercion, tribes across the U.S. could have their gaming rights stripped and be forced to renegotiate from scratch.
A Long and Costly Battle for Maverick
Fighting a legal battle all the way to the Supreme Court is not cheap, often running into the millions of dollars. Meanwhile, poker is not a particularly lucrative business compared to other forms of gambling. It isn’t only the tribes with a lot at stake in the case, as Maverick is clearly in some financial difficulty if its efforts prove fruitless and it remains locked out of the Washington sports betting market.
Last month, it announced that it was closing four casinos while filing for bankruptcy protection. On its website, it blamed state officials for denying its request to amend the regulations to allow centralized surveillance. As things stand, it must have a separate security team for each property, but cannot have more than 15 tables per location. The implication is that the resulting overhead is keeping the company from being profitable.
