Running Aces files lawsuit against tribal casino execs

Casino CEO argues other casinos are illegally using some gaming systems, making market unfair

Running Aces Casino and Racetrack filed a federal lawsuit against executives at three tribal casinos in Minnesota under the Racketeer Influenced and Corrupt Organizations (RICO) Act last week. The lawsuit alleges some of the games offered at three Minnesota casinos, including Grand Casino Hinckley, Grand Casino Mille Lacs and Treasure Island Resort & Casino aren’t allowed under the tribal gaming compacts. According to the lawsuit, the inclusion of those games puts Running Aces at a disadvantage to attract patrons, negatively impacting its business.

“[If] they’re trying to put me out of business, I got to fight for my business. Why wouldn’t anybody do that?” said Running Aces Casino & Racetrack President and CEO Taro Ito.

Ito alleges that the compacts only specifically outline parameters for tribal casinos to play blackjack and have slot machines. According to Ito, the casinos offer other games like Ultimate Texas Hold ‘Em, baccarat or 3-Card poker, which aren’t specifically outlined in the gaming compacts and therefore illegal.

“We’re not trying to be vindictive and trying to punish or hurt tribes,” Ito said. Instead, he said the lawsuit was filed to make the gambling market mo re fair.

Ito said he doesn’t want the lawsuit to be seen as an attack against tribal rights and sovereignty, but a necessary means to keep his business running.

“If some Nevada-based company was doing this, I’d file the suit too. It’s not about the tribes. It’s about competition and being treated fairly,” Ito said.

The groundwork for this lawsuit started several years ago when Running Aces tried to negotiate with the tribes for the ability to expand gaming or venture into sports betting, according to Ito.

“At every step of the way they just slammed the door on us,” Ito said.

This federal lawsuit was filed on the heels of historic horse racing games being contested by tribes and Minnesota legislators, who argue the games are akin to slot machines, which are only allowed at tribal casinos.

The Minnesota Racing Commission approved the installation of historic horse racing games, virtual games that allow a user to place a bet on a horse race that happened in the past. The manufacturer of the historic horse racing games utilizes a database that holds around 60,000 horse races that happened throughout the country, except races that happened in Minnesota. In each race that’s shown, the names of the horses and name of the racetrack are excluded from the experience preventing users from Googling the outcome of the race. All that is available for a user to see is the racing statistics of the horse.

Ito argues they are not slot machines since they’re based on pari-mutuel gambling – bets that are contributed to a pool of money that is divvied out – and that legislators didn’t take time to examine their “volumes” of work to explain why the new games should be allowed under current laws.

“They haven’t done their due diligence yet. They’re saying, ‘This is illegal and a slot machine.’ It just baffles my mind,” Ito said.

An amendment banning historic horse racing games was added to a house bill, the Minnesota Sports Betting Act 2.0, which is still on the table this session. There is a lot of debate at the Legislature about whether racetracks should be included in the bill as a sports betting venue, which Ito argues Running Aces is already in that business.

“Every time you bet on a horse, it’s identical to a sports bet. … They’re going to cut out the people that have been doing it for 39 years,” Ito said.

The gaming compacts have been amended over the years to allow for new technologies to be used at the tribal casinos, but Ito says historic horse racing games are met with unnecessary roadblocks.

“When Running Aces wants to take advantage of new technology in the pari-mutuel world, they say, ‘Oh, wait a minute, you can’t do that. That’s not allowed, that’s against the rules, it’s unconstitutional.’ … The hypocrisy is so staggering,” Ito said.

RICO laws are more recently known for being used in the charges against former President Donald Trump in Fulton County, Georgia. Georgia has a unique history pursuing RICO cases to punish organized groups who violated its laws. For example, in 2015, a Georgia district attorney utilized the RICO laws to convict Atlanta school district officials for falsifying standardized test scores.

This case is different. The lawsuit argues that under the RICO Act, Running Aces is entitled to compensation because of lost business due to the alleged illegal card games offered at the three casinos, under the racketeering laws.