## Facts

- Congress enacted the Indian Gaming Regulatory Act (IGRA) in 1988, creating three gaming classes and establishing the National Indian Gaming Commission (NIGC) to implement the statute by regulation.
- IGRA defines Class II gaming to include “bingo” and “games similar to bingo,” while Class III includes all other gaming and generally requires a tribal–state compact.
- Several tribes and a tribally chartered corporation operated or sought to operate keno on Indian lands and asserted that keno is “similar to bingo” and therefore Class II.
- The NIGC promulgated regulations classifying keno as Class III, treating it as a “house banking” game in which the house participates and effectively competes against players.
- The tribes filed separate federal actions challenging the regulation as contrary to IGRA and arbitrary and capricious, and argued that statutory ambiguities must be resolved in favor of tribes under Indian-law interpretive canons.
- The district courts upheld the regulation, applying Chevron deference to the agency’s interpretation; the cases were consolidated on appeal.

## Issues

1. Whether IGRA unambiguously classifies keno as a Class II game “similar to bingo,” or instead leaves ambiguity permitting the NIGC to classify keno by regulation under Chevron.
2. Whether the NIGC’s classification of keno as a Class III, house-banking game was arbitrary, capricious, or contrary to IGRA.
3. Whether the Indian-law canon favoring tribes in statutory ambiguities overrides or limits Chevron deference to the NIGC’s interpretation.

## Decision

- The Eighth Circuit affirmed the judgments upholding the NIGC regulation classifying keno as Class III.
- The court held IGRA is ambiguous as to whether keno is a “game similar to bingo” and contains no clear congressional directive on keno’s classification.
- Applying Chevron, the court concluded the NIGC’s Class III classification was a reasonable construction of IGRA’s scheme, including its distinction between house-banking games and other games.
- The court rejected the argument that the pro-tribal canon displaced Chevron in this context where Congress delegated interpretive authority and the agency’s interpretation was reasonable.
- The court found the regulation not arbitrary or capricious, noting the Commission’s reasoned rulemaking process, including hearings and consideration of comments and relevant statutory purposes.

## Legal Principles

- When IGRA’s classification terms (such as “games similar to bingo”) are ambiguous and Congress has delegated implementation authority to the NIGC, courts apply Chevron and uphold any reasonable agency classification not contrary to a clear congressional directive.
- The NIGC may reasonably treat “house banking” games—where the house participates and competes against players—as Class III unless the statute expressly includes the game in Class II.
- IGRA reflects both economic-development objectives for tribes and protective objectives aimed at maintaining integrity and preventing corrupt influences; an agency may implement reasonable policy lines consistent with that structure.
- Indian-law interpretive canons may inform interpretation but do not automatically override Chevron deference where an agency’s reasonable interpretation falls within delegated authority.

## Conclusion

The Eighth Circuit upheld the NIGC’s regulation classifying keno as Class III under IGRA, concluding that IGRA is ambiguous on keno, Chevron deference applied, the agency’s house-banking rationale was reasonable, and neither the pro-tribal canon nor arbitrary-and-capricious review required invalidating the regulation.


Shakopee Mdewakanton Sioux Cmty. v. Hope, 16 F.3d 261 (8th Cir. 1994)