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State of Missouri v. Coeur D'Alene Tribe

This case represents another attempt by the State of Missouri to regulate the gaming activities conducted by defendant the Coeur D'Alene Tribe ("Tribe") with Missouri residents. The Tribe operates a lottery over the Internet in which residents from 36 states, including Missouri, can participate. After funding an account with the Tribe, bettors, from their residence, can purchase chances in various lotteries over the Internet. Each chance entitles the bettor to participate in a prize drawing. The equipment used by the Tribe to operate this lottery is located on the Tribe's reservation in Idaho.

The State of Missouri commenced suit against the Tribe in Missouri state court, charging that the Tribe had violated Missouri state law by allowing Missouri residents to participate in this lottery. The Tribe responded that its gaming activities were exempt from Missouri state regulation by virtue of the federal Indian Gaming Regulatory Act ("IGRA"), 25 U.S.C. ??2701 et seq. This statute provides a framework under which Indians can legally operate gaming enterprises "on Indian lands". The lottery had been established pursuant to the IGRA and a compact between the Tribe and the State of Idaho. Arguing that the case involved a federal question, defendant removed it to federal district court. The District Court then, on the Tribe's motion, dismissed the suit on the grounds that the Tribe's gaming activities were not subject to regulation by the State of Missouri by virtue of the IGRA and federal preemption.

On appeal, the Eighth Circuit Court of Appeals reversed and remanded the case to the District Court. The Eighth Circuit held that contrary to the district court's ruling, state law claims against Indian gaming activities are only preempted if the gaming activities take place "on Indian lands." If they do not, "the IGRA does not preempt state law claims -- indeed it does not even appear to provide a federal defense ...". The Eighth Circuit remanded the case to the District Court for a determination of whether the activities at issue took place on or off Indian lands. If the later, the case was to be remanded to the State Court for adjudication of the validity of the State of Missouri's state law claims, free from any defense that those claims were preempted by application of the IGRA.

While not deciding the issue, the Eighth Circuit indicated that it believed that Missouri residents who place wagers over the Internet from their Missouri residence to the Tribe in Idaho were subject to Missouri state regulation. Said the court:

Once a tribe leaves its own lands and conducts gambling activities on state lands, nothing in the IGRA suggests that Congress intended to preempt the State's historic right to regulate this controversial class of economic activities. For example, if the State of Missouri sought an injunction against the Tribe conducting an internet lottery from a Kansas City hotel room, or a floating crap game in the streets of St. Louis, the IGRA should not completely preempt such a law enforcement action simply because the injunction might 'interfere with tribal governance of gaming.'

The full text of the court's decision can be found on a web site maintained by Findlaw.