Running Aces Files RICO Suit Against Three Minnesota Casinos

Running Aces Casino in Columbus, Minnesota filed a federal lawsuit against three other local casinos for allegedly offering illegal class III card games. 

The lawsuit identified high-ranking members at Grand Casino Hinckley, Grand Casino Mille Lacs, and Treasure Island Resort and Casino. It deemed those officials offered class III card games that were not authorized by the tribal gaming compact which all gaming entities must follow. 

A press release said that Running Aces is looking to recover damages as a result of patronage lost to the illegal offerings. It also wants an injunction against the casinos and illegal offerings named in the suit.

The lawsuit was filed under the federal Racketeer Influenced and Corrupt Organization Act (RICO). It addressed the Mille Lacs Band of Ojibwe, which owns the Grand Casinos, and the Prairie Island Indian Community, which owns Treasure Island.

The act applies to a variety of areas, including gambling, and can be used to address more than one person under the same count. Its purpose is to outlaw anyone from associating with an illegal business or operation that affects foreign or interstate commerce. 

The Indian Gaming Regulatory Act of 1988 allows tribal casinos with class III gambling licenses to offer common chance-based casino games, slot machines, video poker, roulette, baccarat, craps, and banking card games such as blackjack.

Attorneys for Running Aces claim the casinos named in the suit offered more types of card games than they were allowed to, including Three-Card Poker and Ultimate Texas Hold’Em, giving them “illegal and unfair competitive advantages over Running Aces.”

The suit claims that Mille Lacs was in violation of its compact since 2020. It also noted that Treasure Island’s compact was amended last October. 

"By offering Class III card games other than blackjack, these casinos have engaged in gaming that was not authorized by IGRA but instead violated Minnesota criminal law, (at least until October 2023 for Treasure Island)," the lawsuit states. 

“All that we have ever sought was to be treated fairly, compete on a level playing field, take advantage of improvements within the pari-mutuel environment, and operate without fear of being eliminated,” said Running Aces President & CEO, Taro Ito. “It is our sincere desire to have our day in court and let the facts determine the outcome.”

A RICO suit is normally used to address gang activity. However, it is also commonly used to address fraud when it comes to matters of business. 

The burden is now on Running Aces to prove that it lost customers as a direct result of the other casinos’ alleged illegal offerings, according to Jeffrey E. Gree, a RICO attorney who taught at the University of Minnesota’s law school. 

“For a damage analysis, you would have to show that a concrete monetary value was lost because of this alleged illegal gaming that was going on,” said Grell.

Proving the list of offerings directly led to a decline in customer visits and patronage could be difficult. Gamblers are motivated by more than just the type of games they can play and could factor in travel, comfort, prices, amenities, and much more.

A Prairie Island spokesperson said the tribe only recently became privy to the lawsuit and did not have any comments. Neither group submitted a response.

This comes at a time when the future of Minnesota sports betting is still up in the air. 

Minnesota is one of 12 states that do not offer legal sports betting sites to locals. A proposal led by Rep. Zack Stephenson that included a 20 percent tax on gross gaming revenue drew support from tribes, charities, and lawmakers, but it is still a long way from the finish line.

If approved, the bill would allow casinos to partner with a online sports betting brand, such as FanDuel or DraftKings. 

However, Running Aces and Canterbury Park, a horse racing facility, objected to the proposal.