Justices uphold approval of electronic table games

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The Minnesota Supreme Court recently decided whether off-reservation electronic tables violate agreements granting Minnesota tribes exclusive rights to video games of chance. Running Aces Casino, Hotel & Racetrack introduced touchscreen-operated electronic tables, and the court upheld the Minnesota Racing Commission‘s consent, despite finding that a tribe had standing to challenge.

The Shakopee Mdewakanton Sioux Community is authorized to operate video games of chance pursuant to its compact with the state. The community owns Mystic Lake Casino Hotel and Little Six Casino in Prior Lake, offering blackjack, other table card games, and various gambling devices.

Running Aces, operating a harness racing track and card club in Columbus, Minnesota, requested Racing Commission approval for electronic table games manufactured by Interblock. These “dealer-assist” games combine physical card dealing with digital player stations, allowing players to bet electronically while a human dealer shuffles and scans physical cards. The games are distinct from fully automated electronic games that use random number generators, which are prohibited as gambling devices under state law. Since 2017, the commission has approved amendments allowing electronic table games under the condition that games remain live, without random number generators.

Running Aces sought further amendments to add additional dealer tables and player stations. The Shakopee Mdewakanton Sioux Community objected, claiming the games constituted gambling devices reserved by law for tribal operation and requesting revocation or formal review. The commission consulted with the community but ultimately approved the amendment under the same live-play conditions as prior approvals.

The community petitioned for certiorari, asserting the commission exceeded its authority. The Court of Appeals confirmed the community had standing and upheld the commission’s decision. It found the electronic table games are not gambling devices or video games of chance, so the commission did not rely on unenforceable rules and the amended floor plan complied with statutory table limits.

The community contended that the commission unlawfully expanded gambling in Minnesota by approving the use of video games of chance and other gambling devices and by allowing the card club to exceed the statutory limit on gaming tables. The community also argued that the Racing Commission relied on an unpromulgated rule in approving the amended plan. Running Aces responded that the community lacked standing to bring the appeal.

Under the Minnesota Administrative Procedure Act, judicial review is available to an aggrieved party. Aggrieved parties are those suffering an injury in fact, which is a concrete and particularized invasion of a legally protected interest, due to the agency’s action. There was disagreement about whether the plaintiffs were aggrieved.

The Shakopee Mdewakanton Sioux Community argued that it is aggrieved because the commission’s decision infringes on its legally protected right, under its tribal-state compact and Minnesota’s gambling statutes, to operate video games of chance. It also asserted that the decision threatens the gaming revenues that fund its government.

Running Aces countered that the Community is merely a competitor in a regulated industry and that speculative economic harm from lawful competition does not establish standing.

The Supreme Court agreed that the community has standing. It found that, because the commission’s decision allegedly interferes with the community’s legally protected, competition-restricted interest in operating video games of chance, the community has alleged a concrete and particularized injury in fact.

However, the court was evenly divided on whether the commission’s decision should be vacated. As a result, it affirmed the lower court’s decision on the remaining issues.