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Bits and Pieces from Indian Country - February 2008

1 March 2008

Twenty years into Indian gaming, many things have changed. Indian gaming is now big business, much larger than anyone would have imagined in 1988. In the beginning, just one state, Connecticut, saw a chance for the state to take advantage of Indian gaming and that awareness came only at the suggestion of the management of Foxwoods. The original compact allowed for table games but not slot machines. The management and the tribe realized they could make much more money if they also had slot machines. So they asked for a meeting with the governor and suggested a 25 percent fee to the state from slot revenues for the privilege of operating slot machines.

Today, the idea that slots make the majority of the money and that any state would benefit from a share of the action seems like a no-brainer. Every state with Indian gaming has attempted in the last few years to gain some direct financial reward for allowing gaming. Some states have had to wait until the original agreements came due for renewal; others used the prospect of expanded gaming to negotiate a percentage of the slot revenue. The governors of two major states, California and Florida, are both in the process of allowing for expansion in exchange for a percentage of the action.

"I'm interested in one thing, and one thing only, that ... the Indian gaming tribes pay their fair share, and ... that we in California get the money, because we need the money." Gov. Arnold Schwarzenegger suggested the significant Indian gambling expansion pending in four initiatives on the Feb. 5 ballot could be overshadowed by what's to come. In frank comments, the governor also said the billions promised to the state were his primary, if not sole, motive in negotiating agreements that would allow four Southern California tribes to build some of the biggest casinos in the world. "This is $9 billion ... and when we are finished with all the negotiations with all the tribes -- because we're not finished yet -- it will be approximately $22 billion that we will get over the next 20 years," the governor said. (James P. Sweeney, Copley News Service, San Diego Union-Tribune, 1-31-08)

Both states' governors have signed compacts with some tribes, both of the states' compacts have federal approval and both have challenges to the compacts. In California opponents have managed to get the compacts placed on the ballot (one signed compact is not on the ballot) and in Florida the compact is being challenged in court.

The federal government has approved a gambling expansion plan that allows the San Manuel Band of Mission Indians to add 5,500 more slot machines to its San Bernardino area casino. The tribe now operates 2,000 slots. The approval by the Department of the Interior, published Friday in the Federal Register, comes as four other tribes wage a costly campaign to win California voters' support of their gambling expansion agreements… The San Manuel tribe, which signed its agreement with Gov. Schwarzenegger in August 2006, already has a labor union – the Communication Workers of America – and does not face an election challenge. Additionally, San Manuel has done cross promotions with horse racetracks, some of which are also fighting the other four tribes. The Department of Finance has estimated the tribe will pay $7.2 billion to the state over the life of the agreement, which lasts through 2030, if it adds all 5,500 machines allowed. If the tribe adds 3,000 machines, the state will get $3.8 billion. (Michelle DeArmond, Press-Enterprise, 1-23-08)

The high-stakes pact struck between Gov. Charlie Crist and the Seminole Tribe of Florida to let the Indians expand their gambling operations appeared to be on shaky ground Wednesday, after the state's highest court questioned the validity of the deal. The high-stakes pact struck between Gov. Charlie Crist and the Seminole Tribe of Florida to let the Indians expand their gambling operations appeared to be on shaky ground Wednesday, after the state's highest court questioned the validity of the deal… In the spirited session, justices peppered both sides with questions on whether the deal is constitutional and about what would happen if the court fails to act. The legal showdown came two days after the tribe installed 800 slot machines at the Seminole Hard Rock Casino near Hollywood. Both sides agreed that Florida law is murky on what role the governor and Legislature should play in reaching a deal with the tribe. But justices sounded troubled that the compact authorized the Seminoles to offer card games that are currently illegal in the state… But justices equally questioned the position of Jon Mills, the attorney representing Rubio, that while Crist can 'negotiate' a deal with the tribe, he doesn't have the power to sign an agreement with them. The justices noted that Florida was under orders from the federal government to reach a deal with the Seminole Tribe after 16 years of previous negotiations had gone nowhere… The court gave no indication when it might rule, although one justice asked what would happen if the court waited to see what the Legislature might do during its upcoming session that starts in March. The attorneys for both sides agreed that the compact would remain in effect. (Gary Fineout, Miami Herald, 1-30-08)

Gov. Arnold Schwarzengger is putting the campaign on Indian gaming deals into high-gear. Schwarzenegger's political spokesperson Julie Soderland said Schwarzenegger will head to the Los Angeles area on Friday to stump for a "Yes" vote on Propositions 94, 95, 96 and 97. One stop is expected to take him to the Valley Industry and Commerce Association in Sherman Oaks, according to Soderlund. Until now, Schwarzenegger has delivered his message largely through TV commercials promoting… Schwarzenegger maintains the compacts he signed with the Agua Caliente Band of Cahuilla Indians, Morongo Band of Mission Indians, Pechanga Band of Luiseno Indians and Sycuan Band of the Kumeyaay Nation are good deals for California, as they would bring more than $9 billion in needed revenues to the state budget in the next two decades for essential services. (Debra Gruszecki, Palm Springs Desert Sun, 2-1-08)

As much as the perception of Indian gaming and its potential has changed in the last twenty years, one thing hasn't changed as much – the resistance to it. Indian gaming has always had its opponents; most of the opposition has come from state and local governments that would like to control Indian gaming, rather than stop it completely. The arguments are often couched in moral terms, but they usually boil down to control and money. This is similar to the arguments in Philadelphia, where the City is fighting to maintain its codes and regulations and resisting the state's attempt to impose its will on the City. The tribes usually insist that they are sovereign and subject only to federal oversight and such state restrictions as agreed upon in the compact.

Amador County supervisors announced the beginning of a public outreach program to seek input on two options the county faces regarding the proposed Buena Vista Rancheria Casino Tuesday. With a three-year-old legal challenge that has yet to be heard, District 2 Supervisor Rich Forster announced during a press conference the county's options had shrunk down to two: Continuing with a costly litigation campaign that has yet to yield any results or approving an agreement with the tribe that would secure funding for public services and clear the way for the county's second casino? While the county has set up a hotline and will engage in a series of community information workshops to elicit public input, the tone struck during Tuesday's press conference and in the subsequent news release from the county suggested the county was begrudgingly leaning toward the latter. (Amador Ledger-Dispatch, 1-31-08)

There are exceptions; for example the Attorney General of Nebraska is trying to prevent a tribe in Iowa from opening a casino that he says will affect the citizens of his state. If he has an underlying agenda, it isn't clear what that might be – except that he doesn't want Nebraskans spending their money in Iowa. He says people in Nebraska voted down casinos and shouldn't be burdened with them in another state – by that logic he might sue Steve Wynn or Sheldon Adelson.

Nebraska Attorney General Jon Bruning is challenging a federal agency's ruling that allows the Ponca Tribe of Nebraska to build a casino on its trust land in Carter Lake, Iowa. Bruning said he filed a complaint with the U.S. District Court for the Southern District of Iowa. Bruning criticized the Ponca for trying to build a casino near downtown Omaha, despite failed attempts in the past to get Nebraska voters to approve casino-style gambling in the state. "Nebraskans have repeatedly said no to casino gambling in our state," he said. "The Ponca Tribe shouldn't be able circumvent voters' wishes." Even though the casino is technically in Iowa, it will directly affect Nebraskans because people will have to drive through Omaha to get to it, he said. (Kevin Abourezk, Lincoln Journal Star, 1-31-08)

The quotation is exemplary of one area of opposition that has been consistent: attorneys general. At every juncture in the development of Indian gaming, there have been lawsuits brought by attorneys general. Often an attorney general has sued the governor of the state, as in Florida, or very early in Indian gaming, in Kansas, and sometimes they have sued the federal government or a government agency. Occasionally, a group of attorneys general will get together in a common cause, as is the case with a suit currently being pursued. One of the attorneys general, Massachusetts Attorney General Martha Coakley, made the case most succinctly when she said: "The result of taking land into trust is the creation of an area largely controlled by a competing sovereign within a state's borders without its consent." A competing sovereign – so it really is about control.

The brief asks the Supreme Court to determine whether Congress' delegation of the trust power is constitutional. The latest challenge to Indian sovereign land could not only jeopardize the Mashpee Wampanoag tribe's proposed casino in Middleboro, but Indian territory across the nation. [Massachusetts] Attorney General Martha Coakley has signed on to a lawsuit filed by Rhode Island Gov. Donald L. Carcieri against Secretary of the Interior Dirk Kemp-thorne, who heads up the Bureau of Indian Affairs. "The attorney general felt it was important for the U.S. Supreme Court to clarify the Indian Reorganization Act of 1934," said Harry Pierre, Coakley's spokesperson… At issue is whether it is unconstitutional for Congress to delegate authority to the Secretary of the Interior to take land into trust. The suit questions "the secretary's authority to take land into trust for Indian tribes, thereby removing it from state jurisdiction in many critical respects."… They also question whether tribes recognized after 1934 are covered by the Indian Reorganization Act. (Alice C. Elwell, Brockton Enterprise, 1-31-08)

Indian gaming is twenty years old this year, and it has grown from literally a garage or backyard industry to a major force in gaming. It has also become a major source of funding for any state fortunate enough to have tribes located close to major markets. And while many governors are eager to work with resident tribes (and in some cases non-resident tribes, although that possibility is fading with a change in federal policy) to expand gaming as long as the state gets a cut, there are forces that are fighting against Indian gaming. The fight now is at the most fundamental level – that of the legitimacy of Indian sovereignty. It seems ironic that at a time when our national policy is one of supporting emerging sovereignty in Iraq, Afghanistan, and elsewhere in the world, that at the same time there would be forces within our country trying to deny sovereignty to the original nations of this continent.

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.