## Facts

- Several federally recognized tribes and Michigan resolved IGRA compact disputes through a 1993 stipulation and consent judgment governing Class III gaming and requiring semiannual payments to nearby local governments equal to 2% of each casino’s “net win” from Class III electronic games of chance.
- The consent judgment defined “net win” as the total amount wagered on electronic games of chance minus amounts paid to players for winning wagers, but did not expressly address complimentary or promotional play.
- Hannahville Indian Community operated the Island Resort and Casino and introduced a promotional program using complimentary “QuickSilver” credits usable only on designated machines.
- Patrons received QuickSilver credits without charge; credits were not redeemable for cash, but winning outcomes could produce cash payouts (with a play functionally tied to a $0.25 amount on the machines).
- In calculating the 2% payments, Hannahville treated QuickSilver credits as a $0 wager, which reduced reported “net win” because promotional machines produced payouts without corresponding patron-paid wagers.
- Michigan’s Governor asserted QuickSilver credits were wagers with a $0.25 value per play and sought enforcement of that interpretation under the consent judgment.
- The district court granted the enforcement motion, found the consent judgment unambiguous, adopted the Governor’s interpretation, and refused to consider Hannahville’s proffered extrinsic evidence (industry and accounting standards).

## Issues

1. Whether the consent judgment’s “wager” and “net win” provisions were ambiguous as applied to complimentary promotional gaming credits.
2. Whether the district court erred by enforcing one interpretation without considering extrinsic evidence offered to show the parties’ intended meaning.

## Decision

- The Sixth Circuit reversed the enforcement order and remanded.
- The court held the consent judgment was ambiguous as applied to the QuickSilver promotional program.
- Because of that ambiguity, the district court was required to consider relevant extrinsic evidence to determine the parties’ intent.
- The court did not decide the correct treatment of QuickSilver credits on the merits, leaving that determination to the district court on remand after factfinding.

## Legal Principles

- Consent judgments are interpreted under ordinary contract interpretation principles.
- Contract language is ambiguous when it is susceptible to more than one reasonable interpretation in the context presented.
- When a consent judgment is ambiguous, courts may consider extrinsic evidence (including specialized industry usage and practices) to determine the parties’ intent.
- A court errs by treating ambiguous consent-judgment terms as unambiguous and enforcing a party’s interpretation while excluding relevant extrinsic evidence.

## Conclusion

The Sixth Circuit required further proceedings because the consent judgment did not clearly resolve how complimentary promotional slot credits affect “amount wagered” and therefore “net win”; the district court had to interpret those terms using extrinsic evidence rather than enforcing a single, text-only reading.


Sault Ste. Marie Tribe of Chippewa Indians v. Granholm, 475 F.3d 805 (6th Cir. 2007)