Running Aces amends lawsuit, now claims tribal casinos violate federal law with illegal video games

Running Aces claimed Tuesday in an amended lawsuit that federal law outright bars American Indian tribes from having exclusive rights to gambling operations and that Minnesota’s tribes violate state law by offering video slots and video games of chance.

The Shakopee Mdewakanton Sioux Community firmly rejected the lawsuit’s claims as without merit and an attempt to mislead the public.

The harness track northeast of the Twin Cities in Columbus asked the court for an injunction to stop what it views as illegal gambling. Running Aces, one of two horse tracks in the state, also seeks unspecified monetary damages from the managers and executives who run the tribal casinos.

“For decades, tribal casinos and certain politicians have been falsely perpetuating that they are entitled to an exclusive right on gaming in the state of Minnesota, including electronic video games of chance,” Running Aces CEO and President Taro Ito said in a written statement. He added that federal law prohibits giving exclusive rights to the tribes and that Minnesota law prohibits electronic video games of chance.

In a statement, the Shakopee Mdewakanton Sioux community said all gambling at Mystic Lake and Little Six Casinos complies with tribal and federal law as well as the state compact executed in 1989.

“Winning in court is not Running Aces’ real purpose in filing this case,” the statement said. “It is a desperate stunt to attack the good reputation of tribes and tribal gaming. This lawsuit is intended to mislead the public and influence the final stages of the Minnesota Legislature’s 2024 session.”

The legal move amends the federal racketeering lawsuit that Running Aces filed last month in U.S. District Court. In the initial lawsuit, Running Aces claimed that tribal casinos in three locations offered card games not authorized by state law. The track now claims the casinos also illegally offer video games.

The initial lawsuit named executives at the Grand Casinos in Hinckley and Mille Lacs, owned by the Mille Lacs Band of Ojibwe, and Treasure Island Resort & Casino, owned by the Prairie Island Indian Community. The claim was filed using the federal Racketeer Influenced and Corrupt Organizations (RICO) Act.

The initial lawsuit said the Grand Casinos and Treasure Island offered card games not authorized by the state gambling compacts. Now Running Aces says those casinos, along with Mystic Lake and Little Six, are also offering prohibited video games.

The Minnesota Indian Gaming Association did not respond to a request for comment.

Under the federal Indian Gaming Regulatory Act of 1988 (IGRA), gambling activities such as video slots and casino card games are lawful on tribal lands only if the state explicitly permits them and Minnesota has not done so, the lawsuit said.

“Therefore, all these activities constitute gambling ‘in violation of Minnesota criminal law and federal law,’ and those violations in turn form the basis for defendants’ violations of RICO,” Running Aces said in a written release.

Running Aces itself offers casino card games, such as blackjack, Three Card Poker and Ultimate Texas Hold ’Em. The complaint said that by offering illegal games, the tribal casinos have an “illegal and unfair competitive advantages over Running Aces.”

The latest filing will heighten tensions at the Capitol as the Legislature must adjourn by Monday’s deadline. Lawmakers came into the session ready to discuss legalizing mobile sports betting, but the discussions have languished without bipartisan agreement on a bill.

The bills advanced by the DFL majority would give exclusive licensing rights to the state’s American Indian tribes, allowing each to partner with one betting platform such as DraftKings or FanDuel to offer the mobile betting.

The tracks and their GOP supporters say they would be hurt — possibly put out of business — by the expansion of gambling for the tribes. With mobile betting, Minnesotans could gamble on their cellphones from any place at any time of the day. They wouldn’t have to travel to a casino.

The tracks have encouraged the Legislature to allow them to offer Historical Horse Racing (HHR), which they say would draw customers and needed revenue to support live racing. The Minnesota Racing Commission voted to legalize HHR in early April with DFL leaders immediately rebuking that action.

On Monday, Sen. Matt Klein, DFL-Mendota Heights, said banning HHR is a priority for the DFL in the final days of this session.

Ito said the track wants to be treated fairly and to “take advantage of improvements within the pari-mutuel environment, and operate without fear of being eliminated.”