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Bits and Pieces from Indian Country - August 2005

13 October 2005

The continuing story of Indian country for this year and maybe next is the "off reservation" debate. Is it possible within the limits of the National Indian Gaming Regulatory Act for an Indian tribe to open and operate a casino on land not part of or contiguous to its federally recognized tribal trust land? The simple answer is no; the land on which an Indian tribe operates a casino under the NIGRA must be part of the tribe's reservation (trust land). However, it is possible to obtain and place into trust land that was not part of the original reservation; if the intended use for such a parcel of land is gaming, then a specific process must be followed.

In recent years, Indian gaming has been seen as a solution to economic revitalization for many communities. Many cities have approached a tribe and offered an opportunity to operate a casino in exchange for something the city wants or needs. As well, many rural tribes looking for a better location to operate a casino have approached cities and suggested a mutually beneficial relationship. Up to this point, there have been very few successful attempts to create an "off reservation" urban casino. Still the possibility has drawn a great deal of criticism, including a current congressional inquiry and a handful of legislative proposals to eliminate the possibility.

Every month has a few stories on sovereignty and off reservation gaming. The stories can roughly be divided into two categories; the places and people who support allowing a tribe to move into town and those who opposite the idea, such as the two stories of support from California.

Las Vegas-style gambling in the heart of Orange County, a longshot possibility previously dismissed as too controversial, is up for reconsideration in Garden Grove as a new source of city revenue. When it meets Tuesday night, a divided City Council will once again discuss allowing a tribal-owned casino down the street from Disneyland. Among the five council members, two say they favor exploring the idea, and two oppose it. The swing vote rests with the mayor, whose committee to study revenue options recommended an Indian casino. He said he was willing to at least discuss it. Dave McKibben, Los Angeles Times, 8-26-05

Casino opponents are less vocal today about an Indian tribe's plan to build closer to Rohnert Park than they were two years ago, when the tribe first chose a site on the city's outskirts. This time, there are no angry protesters storming City Hall, complaining of Rohnert Park officials' selling out in backroom deals to the tribe and its Las Vegas partner. There are no threats of lawsuits or recall elections. There aren't 500 people showing up for a five-hour marathon meeting on the casino issue, as in August two years ago after the Federated Indians of Graton Rancheria unveiled plans for a casino resort…City officials said it appears the tribe's new development plans will require a re-evaluation of the revenue-sharing agreement. Mackenzie has promised "an open and transparent public process." Clark Mason, The Press Democrat, 8-26-05

On the other side, there is the opposition to Indian casinos moving into town (or the state in this case) as in this story of the Cleveland Plain Dealer. In Ohio several mayors and communities think that casinos could help the economy; they also think that an Indian tribe might be the best option. There are also a number of tribes that claim Ohio to be their ancestral home and believe a return to operate a casino is not only good business it is historic justice. The latest legislation to prevent such developments comes from Ohio. Ohio is not the only state with significant political power being put against "off reservation" gaming, California, Connecticut, Louisiana and New York also have mustered significant resistance.

Ohio's two Republican senators will push legislation that would keep Indian tribes from establishing casinos prohibited by the Ohio Constitution. Flanked by an array of other high- powered gambling opponents at a Tuesday news conference, U.S. Sen. George Voinovich vowed to keep casino interests out of the state as he has helped do twice in the last decade. He said the new bill would clarify a point of law that otherwise might allow tribes eager to establish casinos to do so even though the state's constitution prohibits it. Julie Carr Smyth, Cleveland Plain Dealer, 8-31-05

New York is the center of attention of several other issues related to trust land and sovereignty. A recent court decision says that New York tribes have to pay tax on lands taken into trust subsequent to the establishment of the original reservations. That has led to a number of attempts by cities and counties to enforce their regulations and taxes on land heretofore considered to be exempt and sovereign to an Indian tribe. The issue this month is a smoking regulation, but property taxes, gasoline and cigarette sales taxes are among the issues in New York. One tribe trying to gain a foothold in the state (a tribe claiming historical right), has offered to pay property taxes to prove they are good corporate citizens of the state. New York is a good case study. There are communities, such as Buffalo that want Indian gaming, as does the governor, while at the same time there are communities that definitely do not and use every legal option available to fight tribes in general and Indian gaming in particular.

Oneida County Health Department officials have told the Oneida Indian Nation they will begin enforcing the state's no-smoking law at one of the few remaining havens for local smokers - the tribe's Turning Stone Resort and Casino. County officials say the U.S. Supreme Court's ruling in March clears the way for them to enforce the smoking ban and all other state and county health codes on nation-owned properties. The high court ruled March 29 that the nation could not assert sovereignty over land that has been out of its hands for nearly 200 years. "The Supreme Court decision . . . indicates, at least by our reading, that they're subject to regulatory controls," said County Attorney Randy Caldwell. Glenn Coin, Syracuse Post-Standard, 8-26-05

Seneca-Cayuga Tribe of Oklahoma leaders returned to their homeland Thursday with a $70,186.45 check for back taxes in Cayuga County and an economic development plan that includes casino gambling. Newly elected Chief Paul Spicer gave the check to county Legislature Chairman Herbert Marshall and spoke for roughly 30 minutes about the tribe's plans for the Finger Lakes…is looking to build a full-scale casino in the Cayuga land-claim area while it tries to forge an economic development partnership with county and other municipal leaders and businesses. "Gaming is going to be a part of the mix," Spicer said. The tribe is eager to work with local communities in trying to find a mutually acceptable site for the casino, he said. It would also obey local building and zoning regulations and pay taxes or user fees to the taxing entities, he said. Scott Rapp, Syracuse Post-Standard, 8-19-05

The award for trying to sit on the fence of Indian gaming goes to California and Governor Schwarzenegger. For every city or community (or politician) that is willing to fight until the death rather than allow an Indian casino within its sphere of influence, there is another who thinks that Indian gaming is the best thing since…(fill in your own best invention). The governor is both; he wants and needs money from Indian gaming (he promised the state billions from the tribes to help solve the budget deficit), but he wants the tribes to do everything on his terms and frequently threatens legal action if he doesn't get his way. The stakes are high, even the more remote locations, such as the River Rock Casino 75 miles north of San Francisco demonstrate the value and potential of an Indian casino. Imagine the revenues if it were in or very near San Francisco.

The Schwarzenegger administration and two Indian tribes, including San Diego County's Los Coyotes band, have finalized agreements that would allow the tribes to build large, off-reservation casinos in Barstow, along a heavily traveled route to Las Vegas. The soon-to-be-signed, 20-year deals offer up to 2,400 slot machines each to Los Coyotes and the Big Lagoon tribe of Humboldt County in Northern California, said Big Lagoon Chairman Virgil Moorehead…The agreements, or compacts, promise to be controversial, with one of the state's most successful and influential gaming tribes already warning it will wage an aggressive fight against them. Complicating the situation are two other new compacts - for the Quechan tribe of Imperial County and the Yurok tribe of Klamath - awaiting ratification. Those compacts also have drawn tribal criticism. The Barstow compacts will pose an even tougher sell because they authorize off-reservation casinos. The 380-member Los Coyotes band has a 25,000-acre reservation near Warner Springs, more than 100 miles from Barstow. Big Lagoon's rancheria is 700 miles to the north. U.S. Interior Secretary Gale Norton recently declared that she will no longer consider compacts for casino sites not yet held in trust for a tribe by the federal government. The Barstow site where Los Coyotes and Big Lagoon hope to build a joint gambling complex has not been taken into trust for either tribe. James P. Sweeney, Copley News Service, San Diego Union-Tribune, 8-26-05

Gov. Arnold Schwarzenegger's office warned the Jamul Indian tribe yesterday that the tribe's proposed 30-story casino and hotel may be in violation of its gambling compact with the state. In a letter to Jamul tribal chairman Leon Acebedo, Schwarzenegger's legal affairs secretary, Peter Siggins, said news of the casino raises troublesome questions about fire protection, water quality and the tribe's willingness to analyze environmental issues. …"Should the tribe choose not to accept this invitation to inform the state of its activities and provide assurances of its intent to comply with its compact obligations, our office will be obliged to take further appropriate action under the compact," he wrote. Anne Krueger, San Diego Union-Tribune, 8-31-05

The River Rock Entertainment Authority, the operator of the River Rock Casino in Sonoma County, California, today announced second quarter operating results for the period ended June 30, 2005...Net revenues for the second quarter ended June 30, 2005 were $35.8 million. Casino revenues totaled $34.8 million in the second quarter and included slot revenue of $31.0 million and table game revenue of $3.8 million. Food, beverage, and retail revenues were $1.8 million. …EBITDA (1) for the second quarter of 2005 was $12.8 million, or 35.9% of net revenues. Income from operations for the second quarter 2005 was $10.0 million and represented 28.0% of net revenues. …We are a Tribal governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians, a federally recognized self-governing Indian tribe. The Tribe has 768 enrolled members and approximately 75-acre reservation in Sonoma County, California. We own and operate the River Rock Casino, a 68,000 square foot facility which is on the reservation and overlooks the scenic Alexander Valley, 75 miles north of San Francisco. River Rock Casino features 35,500 square feet of gaming space containing 1,600 slot and video poker machines, as well as two full-service restaurants. Business Wire, 8-16-05

One of the biggest stories in August has been the military base closing commission and the reaction across the country to potential loss of revenues and jobs that military bases create. In Michigan there is an interesting twist. Have you ever wondered what happens to the land, buildings and trappings of the bases that get closed? Here is part of the answer. They are for sale, and if you are an Indian tribe and the land is near the traditional reservation, it is a very sensible investment. It might not work for a casino location, but there are other possibilities.

Since the Cold War ended, the government has closed 97 major military bases at a savings of $29 billion to the American taxpayer. Tribes from the Muckleshoot to the St. Regis Mohawk are among those who have obtained surplus military land for housing, recreation and enhancing portfolio investments. Now, another round of closings - the first in 10 years - is imminent. Defense Secretary Donald Rumsfeld announced in May that some 5 percent of 3,700 domestic bases and installations would be recommended for closure. …When the K.I. Sawyer Air Force Base in Michigan's Upper Peninsula was selected for closure, the Sault Ste. Marie Tribe of Chippewa Indians were interested. The base was located on the border of land taken from the tribe in the Chippewa-Ottawa Treaty of 1836. The BRAC reclamation process began in 1994 - and proceeded at a slow crawl. …The Sault Ste. Marie Chippewa, with about 2,000 acres in trust, has a core reservation in Sault Ste. Marie and additional land in seven outlying areas. To be eligible for BRAC, they had to have trust property within 25 miles of the base. The tribe has been running casinos since the mid-1980s; the LRA wanted gaming, explained Nygaard, but the Indian Gaming Regulatory Act stipulated that casinos weren't permitted on land obtained after its passage. …In the end, the tribe prevailed - the Chippewa paid nothing for their 98 acres of land except for surveys, metering, property descriptions and other incidental costs. The tribe came away with 275 housing units - single-family, duplexes and multiplexes - along with three industrial buildings and a gas station. …advice aplenty for BRAC-seeking tribes: Arrange for a site visit immediately; contact the LRA without delay; submit the plan to the BIA with a tribal resolution; get the BIA and Office of Management and Budget to sign on; make frequent visits to all parties, including those in Washington; respond to requests for information; don't depend on the BIA for property descriptions; and attend all record-of-decision meetings. Indian Country Today, 8-26-05

One way or another, sovereignty continues to be the major issue in Indian gaming. The debate differs from state to state, but there is one major common factor. Indian gaming, in fact all Indian sovereignty, is a federal issue and is governed by federal legislation. Congress is in the process of reviewing the Act, inquiring into some suspicious activities, such as lobbyist Jack Abramoff's tribal activities, and discussing limiting locations, legislation sponsored by senators and representatives from several states. It is clear that change is certain to result from the Congressional debates; the nature of the change is not quite so clear. There are very passionate people on every side.

The hurricane on the Gulf Coast, the price of gasoline, the housing market or some other pressing issue will take turns in dominating the media focus and public attention. But Indian gaming is certain to remain a significant political issue for the next few years, not the most important, but significant. In the short-term, however, the fate of Biloxi and New Orleans are going to be far more important to everyone, including the United States Congress.


But now, that is simply my opinion, isn't it?

Ken

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.