The Tribe owns and operates a casino on tribal trust land in South Dakota. In 1994, the Tribe entered into a five-year casino management contract with BBC. Article 6.4(c)(5) of the contract required BBC to fund an initial Operation Expense Reserve (“OER”) account. BBC, however, never made the initial contribution to the OER account. Instead, BBC and the Tribe orally agreed that BBC would contribute 7.5% of the casino’s net profits to the account each month. At the conclusion of the contract, BBC withdrew $415,857 from the OER account based on its belief that it was entitled to 35% of the remaining OER account balance, a division consistent with the contract’s division of net profits. The Tribe brought a breach-of-contract suit in tribal court, arguing that the oral modification was not in compliance with the Indian Gaming Regulatory Act of 1988 (“IGRA”) and IGRA’s various implementing regulations.
IGRA created the statutory basis for the regulation and operation of gaming by Indian tribes. IGRA established the National Indian Gaming Commission (“NIGC”) to oversee Indian gaming. Indian tribes may enter into casino management contracts only after the NIGC Chairman has approved those contracts. Any modifications of the contracts are also subject to the NIGC Chairman’s approval. The NIGC Chairman approved the casino management contract entered into by the Tribe and BBC, but the oral modification regarding the funding of the OER account was never presented to the NICG Chairman.
Judge(s): Bobby Shepherd
Jurisdiction: U.S. Court of Appeals, Eighth Circuit
Related Categories: Civil Procedure
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