Can New Mexico let non-tribal racetracks offer Class II gaming (like bingo-style machines) without breaking the 2015 tribal-state gaming compact, and could the tribes stop their revenue sharing if it does?

Plain-English summary

The New Mexico Gaming Control Board asked two questions. Could the state let non-tribal racetracks offer Class II gaming (bingo-style machines, certain card games) without breaching the 2015 tribal-state Compact? And if it did, could the tribes lawfully terminate the revenue-sharing payments they currently make to the state?

The Attorney General declined to answer either question definitively. The Compact restricts non-tribal gaming, and the trigger for tribes to stop revenue sharing is tied to whether the state allows non-tribal entities to operate "Gaming Machines" beyond the racetrack and veterans/fraternal carve-outs. The contractual definition of "Gaming Machine" arguably covers only Class III devices, but the supporting Compact appendix admits that gaming technology is evolving and many devices straddle the Class II/III line. The Secretary of the Interior also did not affirmatively approve the 2015 Compact and has voiced skepticism about its revenue-sharing structure.

Because answering would require interpreting an ambiguous contract term in light of negotiation history and federal regulators' positions, the AG concluded the questions are mixed questions of fact and law that fall outside the scope of an AG opinion under Section 8-5-2(D). The opinion expressly walks back AGO 13-02, which had given a cleaner "no problem" answer under the prior Compact.

What this means for you

If you operate or invest in a New Mexico racetrack

Treat the legal status of expanded Class II offerings as unsettled. The 2015 Compact's Gaming Machine definition is anchored to Class III, but the Compact appendix explicitly contemplates that some games sit on the Class II/III boundary, and the Secretary has signaled that any expansion of non-tribal gaming would terminate the tribes' revenue-sharing duty. Either of those positions would be a major political and legal headwind for any racetrack expansion plan.

If you are pricing a deal that depends on adding bingo-style machines or other Class II products at a racetrack, model both outcomes: (a) the Compact restricts you and the state cannot authorize the expansion without renegotiating, or (b) the state can authorize but the tribes terminate revenue sharing, which puts pressure on the state to reverse course.

If you are at a New Mexico tribe with revenue sharing under the 2015 Compact

Section 11(D)(1)(b) and (c) describe the conditions under which your revenue-sharing obligation terminates: the state allowing operators other than the six licensed racetracks and veterans/fraternal organizations to operate Gaming Machines, or letting any racetrack exceed the machine count or hours caps. If the state authorizes a non-tribal Class II expansion that you read as crossing those triggers, the AG's opinion does not give you a green light to terminate, but it also does not bar you. Document your reasoning carefully and coordinate with the Secretary of the Interior, since federal review of compact compliance is the ultimate check.

If you are a New Mexico legislator or in the Governor's compact-negotiation team

The opinion is essentially a request for legislative or negotiated clarity. The current Compact's Gaming Machine definition is ambiguous on Class II reach, and the Secretary's deemed-approval letter creates ongoing uncertainty about which Compact provisions are even enforceable under IGRA. A renegotiated Compact (or stand-alone state legislation paired with tribal consultation) could resolve the question. Until then, any expansion of non-tribal gaming is high-risk on the revenue-sharing side.

If you are a gaming or Indian-law attorney

The opinion treats the Compact as a contract under New Mexico law, citing Sipp v. Buffalo Thunder, Inc., 2024-NMSC-005. That opens the door to extrinsic evidence of intent under Mark V, Inc. v. Mellekas, 1993-NMSC-001, including the Secretary's correspondence and the parties' negotiation history. Litigating the Gaming Machine definition would be a fact-intensive contract-interpretation exercise, not a clean question of statutory construction.

Common questions

Q: Does the 2015 Compact prevent non-tribal racetracks from offering Class II gaming? A: The Compact's restrictions are tied to "Gaming Machines," which the Compact's appendix calls "Class III Gaming Machines." On its face, that suggests Class II machines are outside the restriction. The opinion declines to confirm that reading because the term is contractually ambiguous and the Secretary's interpretation could differ.

Q: If the state allowed Class II at non-tribal racetracks, would tribes stop revenue sharing? A: The opinion does not say definitively. The Secretary of the Interior has separately stated that any expansion of non-tribal gaming triggers the revenue-sharing termination provision. So even if the Compact text technically allowed it, the practical risk to revenue sharing is real.

Q: Why did the AG walk back the 2013 opinion (AGO 13-02)? A: AGO 13-02 said neither IGRA nor the prior compact stopped the legislature from authorizing Class II gaming outside Indian lands. Three things changed: (1) the 2015 Compact replaced the prior one with new revenue-sharing triggers; (2) the Secretary's 2015 deemed-approval letter expressed skepticism about the new revenue-sharing terms; (3) gaming technology has blurred the Class II/III line, so any answer now requires fact-specific analysis of particular machines.

Q: What is the difference between Class II and Class III gaming? A: Class II under IGRA includes bingo and bingo-derived games and certain non-banked card games. It is regulated by the tribe and the National Indian Gaming Commission. Class III is everything else, including casino-style slots, blackjack, and roulette, and requires a tribal-state compact.

Q: What is the role of the Secretary of the Interior here? A: Tribal-state compacts must be approved by the Secretary or, after 45 days, deemed approved to the extent consistent with IGRA. The 2015 Compact was deemed approved rather than affirmatively approved, and the Secretary's letters expressed reservations about the revenue-sharing structure. That makes the Compact's enforceability on revenue-sharing more contestable than a fully-approved compact would be.

Q: What's a Gaming Machine under the Compact?
A: Section 2(K) defines it as a coin- or consideration-operated device that plays a game of chance, with the appendix labeling the definition as one for "Class III Gaming Machines." Whether Class II machines fall inside or outside that definition is the disputed question.

Background and statutory framework

The Indian Gaming Regulatory Act of 1988 (IGRA), 25 U.S.C. §§ 2701-2721, sets the federal framework for tribal gaming. It defines three classes of gaming and regulates each differently: Class I is regulated by the tribe alone, Class II is regulated by the tribe and the National Indian Gaming Commission, and Class III requires a negotiated tribal-state compact approved by the Secretary of the Interior.

In New Mexico, Class III tribal gaming operates under a compact framework established by NMSA 1978, §§ 11-13A-3 and -4. Each tribe negotiates with the Governor, the Legislature approves, and the Secretary then reviews. The 2015 Compact, codified by reference at NMSA 1978, § 11-13-app., is the operative agreement.

Section 11(D) of the 2015 Compact restricts non-tribal Gaming Machine operations to six licensed horse racetracks and veterans/fraternal organizations, with caps on machine count and hours of operation. Section 11(D)(1)(b)-(c) terminates a tribe's revenue-sharing duty if the state allows additional non-tribal operators or relaxes the racetrack caps.

The opinion treats compact interpretation as contract interpretation under New Mexico law, citing Sipp v. Buffalo Thunder, Inc., 2024-NMSC-005, and Mark V, Inc. v. Mellekas, 1993-NMSC-001. Under those cases, ambiguous terms can be interpreted in light of extrinsic evidence about the parties' intent. The Compact's own appendix admits that gaming technology is changing fast and that some games may need case-by-case classification, which makes the Class II/III line a moving target.

The Secretary of the Interior's June 2015 deemed-approval letter and the March 2016 letter from the Acting Assistant Secretary both make clear that any state authorization of additional non-tribal gaming would, in the federal view, terminate the tribes' revenue-sharing obligation. That federal position adds another layer of risk to any state-side decision to expand non-tribal gaming.

Citations and references

Federal statutes and regulations:

• 25 U.S.C. §§ 2701-2721 (IGRA)
• 25 U.S.C. § 2710(d)(8)(C) (Deemed approval)
• 25 C.F.R. § 293.27 (Revenue-sharing review)

State statutes:

• NMSA 1978, §§ 11-13A-3, -4 (Compact procedure)
• NMSA 1978, § 11-13-app. (2015 Compact text)
• NMSA 1978, § 8-5-2(D) (AG opinion authority)

Cases:

• Sipp v. Buffalo Thunder, Inc., 2024-NMSC-005
• Mark V, Inc. v. Mellekas, 1993-NMSC-001, 114 N.M. 778

Related AG opinion:

• N.M. Att'y Gen., No. 13-02 (Sept. 26, 2013) (Class II/III gaming at non-tribal racetracks; superseded in part by this opinion)

Source

• Landing page: https://nmdoj.gov/publication/opinion/2025-16-opinion-2015-tribal-state-gaming-compact-implications-on-non-tribal-racetracks/
• Original PDF: https://nmdoj.gov/wp-content/uploads/AG-Opinion-2025-16-2015-Tribal-State-Gaming-Compact-Implications-on-Non-Tribal-Racetracks.pdf

Original opinion text

December 23, 2025
OPINION
OF
RAÚL TORREZ
Attorney General

Opinion No. 2025-16

To:

Patrick Garrett, Chairman, New Mexico Gaming Control Board

Re:

Attorney General Opinion – 2015 Tribal-State Gaming Compact Implications on Non-Tribal Racetracks Questions

Can the state allow non-tribal racetracks to offer Class II gaming without violating the terms of the current compacts with the tribes? If legislation allows the racetracks to offer Class II gaming, could the tribes lawfully terminate the revenue sharing payments required by the current compacts? Short Answer Because the required analysis necessitates factual determinations that exceed the scope of an Attorney General opinion, we cannot provide a definitive answer to the questions posed. See NMSA 1978, § 8-5-2(D) (1975) (providing that attorney general opinions address questions of law). Background The Indian Gaming Regulatory Act (IGRA), 25 U.S.C. §§ 2701–2721, is the federal regulatory scheme that governs Indian gaming throughout the United States. IGRA designates three classes of Indian gaming: Class I, Class II, and Class III. Class I gaming consists of traditional tribal games and is regulated exclusively by tribes. Id. §§ 2703(6), 2710(a)(1). Class II gaming, regulated by tribes and the National Indian Gaming Commission (NIGC), includes bingo and similar games, as well as certain non-banked card games. Id. §§ 2703(7), 2710(b). Class III gaming encompasses all other forms of gaming, including casino-style games such as slot machines, blackjack, and roulette. Id. § 2703(8). Class III gaming requires a tribal-state compact, which is negotiated between the tribe and state and must be approved by the Secretary of the Interior (Secretary). Id. § 2710(d).

New Mexico Department of Justice
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In New Mexico, tribal-state compacts are negotiated between each tribe that wishes to offer Class III gaming and the Governor's office, and then must be approved by the Legislature. See NMSA 1978, §§ 11-13A-3 (1999), 11-13A-4 (2007). Currently, all Class III gaming in the state is governed by the 2015 tribal-state compact (2015 Compact or Compact). Standardized compact language as approved by the Legislature is available at NMSA 1978, Section 11-13-app. (2015). See also Tribal Compacts, N.M. GAMING CONTROL BOARD, https://www.gcb.nm.gov/new-mexico-gaming-control-board-office-of-the-state-gaming-representative/#TribalCompacts (last visited Nov. 18, 2025). The same questions addressed herein were previously answered by Attorney General Opinion 13-02, in which we opined that "[n]either IGRA nor the Compacts affect the state legislature's authority to authorize or regulate Class II gaming activities outside of Indian lands." N.M. Att'y Gen., No. 13-02 (Sept. 26, 2013) (opinion regarding Class II and III gaming at non-Native American racetracks). A new compact, developments in the law, and technology advancements warrant a different answer today. Analysis At the outset, although provisions governing Class II gaming on Indian lands may not permissibly be included in a tribal-state compact, see 25 U.S.C. § 2710(d)(3)(C) (listing permissible provisions that may be included in a tribal-state compact), a compact could theoretically address or restrict non-tribal Class II gaming. This is because a compact "may include provisions that address revenue sharing in exchange for a [s]tate's meaningful concessions resulting in a substantial economic benefit for the [t]ribe." 25 C.F.R. § 293.27(a). Accordingly, a state could conceivably agree to limit or restrict other forms of non-tribal gaming within the state as a "meaningful concession" to justify any revenue sharing imposed by the compact. At the federal level, revenue sharing provisions in compacts are reviewed "with great scrutiny[.]" 25 C.F.R. § 293.27(b). The questions before us implicate the revenue sharing provisions of the 2015 Compact, particularly Section 11(D), which imposes restrictions on gaming at non-tribal racetracks and outlines various circumstances in which a tribe may lawfully cease making revenue sharing payments to the state. Whether these provisions limit the ability of non-tribal racetracks to offer Class II gaming presents a question of contract interpretation. See Sipp v. Buffalo Thunder, Inc., 2024-NMSC-005, ¶ 15 (explaining that New Mexico courts "treat gaming compacts as contracts between the [s]tate and the [t]ribe"). The Compact states that a tribe's obligation to make revenue sharing payments to the state terminates if the state: "allows any person or entity other than six licensed horse racetracks and veterans and fraternal organizations . . . to operate Gaming Machines;" or "permits any licensed horse racetrack to operate a larger number of Gaming Machines, or to operate any Gaming Machines for longer hours, than is set forth in Subsection (D)(2)(e)" of the Compact. Section 11(D)(1)(b)–(c); see also § 11(D)(2)(e) (explaining that "Gaming Machines" are permitted at licensed racetracks "provided that such operation is limited to no more than eighteen (18) hours in any one day, and to no more than a total of one hundred twelve (112) hours in any calendar week, and provided further that no licensed horse racetrack shall have more than six hundred (600) licensed Gaming Machines, nor be authorized to operate more than seven hundred and fifty (750) Gaming Machines"). Thus, the operative questions depend on the meaning of "Gaming Machines" in the Compact. If Gaming Machines means only Class III machines, these Compact provisions would not likely limit a non-tribal racetrack's ability to engage in Class II gaming. If "Gaming Machines" as used in the Compact does encompass Class II machines, then Class II gaming at a non-tribal racetrack is limited by the Compact. The Compact defines "Gaming Machine" as follows: a mechanical, electromechanical or electronic contrivance or machine that, upon insertion of a coin, token or similar object, or upon payment of any consideration in any manner, is available to play or operate a game of chance in which the outcome depends to a material degree on an element of chance, notwithstanding that some skill may be a factor, whether the payoff is made automatically from the Gaming Machine or in any other manner; but Gaming Machine does not include a Card Minder or a Table Game or any devices utilized in Table Games. Additional clarification of the definitions of a Gaming Machine and a Table Game is set forth in the attached Appendix. Section 2(K). The Appendix further explains that this is a "definition[] for Class III Gaming Machines." App. § I. Section 11(A) explains that the tribes agree to make revenue sharing payments in exchange for the tribes' "exclusive right within the [s]tate to conduct all types of Class III Gaming described in this Compact, with the sole exception of the use of Gaming Machines, which the [s]tate may permit on a limited basis for racetracks and for veterans' and fraternal organizations[.]" And the Compact provision outlining the number of Gaming Machines permitted at racetracks is prefaced by a characterization of such machines as a "form[] of Class III Gaming[.]" Section 11(D)(2). Although these provisions appear to lend support for a conclusion that "Gaming Machines" is only intended to encompass Class III machines, we cannot provide a definitive answer on this point because it delves into factual considerations that exceed the scope of an Attorney General opinion. New Mexico law permits parties to a contract to submit extrinsic evidence concerning whether a contract term is ambiguous. See Mark V, Inc. v. Mellekas, 1993-NMSC-001, ¶¶ 10-14, 114 N.M.

778. This inquiry requires consideration of "the context in which the agreement was made to
     determine whether the party's words are ambiguous." Id. ¶ 12. Here, the context in which the Compact was entered into includes concerns by the parties about changing technology and skepticism from the Secretary about the Compact's revenue sharing provisions. Concerning technology, the Appendix to the 2015 Compact acknowledges that "technology is constantly changing in the area of casino gaming" and lines that were once clear are now blurred. App. § I. In recognition of "the dynamic nature of gaming technology," the Appendix provides that some games may need to be categorized on a case-by-case basis. Id. In addition, advancements in technology have made assessing the distinction between Class II and Class III games difficult to discern in some cases. The NIGC, which provides advisory opinions concerning which class a tribal game falls into, has determined that some games are properly categorized as both Class II and Class III. See Game Classification Opinions, NAT'L INDIAN GAMING COMM'N, https://www.nigc.gov/office-of-general-counsel/legal-opinions/game-classification-opinions/ (last visited Nov. 18, 2025). The Secretary's concerns about the Compact must also be considered. To be valid, tribal-state compacts must be approved by the Secretary. The 2015 Compact was not affirmatively approved by the Secretary. Rather, the Secretary "considered [the Compact] to have been approved, but only to the extent it is consistent with the provisions of IGRA." Letter from Kevin K. Washburn, Assistant Sec'y – Indian Affs., to Hon. Ty Vicenti, President, Jicarilla Apache Nation (June 9, 2015); see 25 U.S.C. § 2710(d)(8)(C) ("If the Secretary does not approve or disapprove a compact
     . . . before the date that is 45 days after the date on which the compact is submitted to the Secretary for approval, the compact shall be considered to have been approved by the Secretary, but only to the extent the compact is consistent with the provisions of [IGRA]."). Notably, the Secretary expressed skepticism "about the overall value of the Compact's additional claimed concessions" and explained that "if the [s]tate permits any additional non-tribal gaming, [a] [t]ribe's obligation to make revenue sharing payments will cease." Letter from Lawrence S. Roberts, Acting Assistant Sec'y – Indian Affs., to Hon. Francisco I. Lujan, Governor, Pueblo of Sandia (Mar. 29, 2016). Because the context in which the Compact was negotiated and approved involves open questions about technology advancements and reservations from the Secretary, the questions posed cannot be answered as pure questions of law. Conclusion Answering the questions presented requires factual determinations that exceed the scope of an Attorney General opinion. See § 8-5-2(D) (providing that attorney general opinions address questions of law). Given the above considerations, we cannot definitively conclude that Class II gaming at non-tribal racetracks would be permitted under the Compact.

Please note that this opinion is a public document and is not protected by the attorney-client privilege. It will be published on our website and made available to the general public.

RAÚL TORREZ
ATTORNEY GENERAL