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Tribe Says It Will Beat Lottery Suit At Odds With Missouri Over Legal ‘Site’ Of Online Wagers

Fri., May 30, 1997

Coeur d’Alene tribal officials expressed confidence Thursday that they’ll beat a Missouri legal challenge to their new Internet lottery.

“We expect more (challenges),” said tribal gaming chief executive David Matheson. “Ultimately, the entire issue will be decided in court, and we are very confident that we’re going to win.”

The tribe maintains that when someone plays its lottery over the Internet, the gambling is happening on the Coeur d’Alene Reservation in Idaho.

“The transaction would in fact take place here on the reservation, just like somebody buying from a catalog, or an 800 number on TV to buy an oldie-goldie album,” Matheson said. “The transaction legally takes place where that company is located.”

Missouri has its own state lottery, plus legal casino gambling on riverboats that includes slot machines, blackjack and poker.

Matheson said states are wary of the tribe’s efforts because they don’t want the competition to their own gambling operations.

“Our competitors are using antiquated technology and fear competition. And they’re hiding themselves behind claims of illegality.”

Missouri Attorney General Jay Nixon filed suit against the tribe Wednesday after an undercover investigator from his office opened an account and played the Coeur d’Alenes’ online “USLottery.”

Nixon said he was particularly concerned that the investigator was told over the phone that it was legal for him to play the game from Missouri. Nixon contends that the online lottery is illegal in Missouri, and that saying it isn’t violates the Missouri Merchandising Practices Act.

But tribal officials say state laws do not apply to their lottery - federal laws do.

Indian tribes, as sovereign nations, are allowed by federal law to engage in any form of gambling that’s legal in their state, if they negotiate a gaming compact with the state. The Coeur d’Alenes have a compact with the state of Idaho that specifically authorizes a national lottery conducted through telecommunications.

According to Nixon’s complaint, filed in a county circuit court in Missouri, “The only lottery which can be conducted legally in the State of Missouri is that conducted by the State of Missouri.”

Nixon, who sued both the tribe and its management company, Unistar Gaming Corp., seeks restitution to Missouri customers and the state, a civil penalty of $1,000 for every violation of Missouri state law, court costs and attorney’s fees.

Tribal officials, Unistar and their attorneys held a strategy session Thursday.

“We totally anticipated this happening,” Matheson said. “We didn’t know who it would be first, but the fact that it happened to be Missouri is neither here nor there. It’s Missouri and there will be more, and we’ll fight them as they come.”

The Internet lottery, which is in limited operation at, will continue to operate and expand, he said.

, DataTimes MEMO: Cut in the Spokane edition.

Cut in the Spokane edition.

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