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According to a federal court in Wisconsin, a compact between an Indian tribe and a state government for the development of Indian gaming facilities sufficiently "affects" interstate commerce for the compact to be subject to the Federal Arbitration Act (FAA).
In Wisconsin v. Ho-Chunk Nation, No. 05-C-632-S, 2007 WL 734390 (W.D. Wis. Mar. 9, 2007), the State of Wisconsin entered into a gaming compact with the Ho-Chunk Nation Indian tribe. The compact allowed the tribe to implement a full variety of Las Vegas-style games, known as "Class III" games. The compact contained an arbitration clause.
After the Wisconsin Supreme Court invalidated a similar compact in Panzer v. Doyle, 680 N.W.2d 666 (Wis. 2004), Ho-Chunk Nation was forced to cease operating Class III games in its facilities. The tribe filed an arbitration complaint, seeking damages, and Wisconsin counterclaimed to recover payments under the compact.
However, when the Wisconsin Supreme Court subsequently abrogated portions of the Panzer decision, Ho-Chunk Nation resumed operation of Class III gaming. Dairyland Greyhound Park, Inc. v. Doyle, 719 N.W.2d 408 (Wis. 2006). The State of Wisconsin brought an amended complaint, requesting a declaration that the tribe's activities were illegal, as well as an order compelling arbitration.
The Court held that the Indian compact affected interstate commerce, and was therefore subject to the FAA with regards to Wisconsin's efforts to compel arbitration. Ho-Chunk Nation argued that Wisconsin could not compel arbitration under the FAA because "Indian commerce" did not qualify as "interstate commerce."
However, the Court noted that Indian casinos attracted interstate customers and contracted with interstate suppliers—activities constituting "interstate commerce" within the meaning of 9 U.S.C. § 1. Moreover, previous court decisions had interpreted contracts for the development of Indian gaming facilities as being subject to the FAA. See Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Kean-Argovitz Resorts, 383 F.3d 512, 514 (6th Cir. 2004).
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