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Bits and Pieces from Indian Country - January 2003

31 January 2003

California is certainly the big story in Indian gaming this month.  The battle lines between some of the communities and the tribes have been drawn.  The state is reaching into Indian gaming for $6 billion of the $35 billion budget shortfall.  At the same time, the Governor has joined the battle to keep the tribes out of urban areas.

Agencies Win Right To Oppose Casino In Court.  …Casino opponents won a round in San Francisco, where U.S. District Judge Phyllis Hamilton ruled that Yolo County, the state of California and the Washington Unified School District have a right to intervene in a federal lawsuit concerning the Upper Lake Band of Pomo Indians. The Pomos want to build a large Nevada-style casino just off the Reed Avenue interchange on Interstate 80 in West Sacramento.  Jeff Hudson, The Davis Enterprise, 1-10-03

The state is also trying to force the tribes to conform to state campaign funding regulations; the tribes maintain that this is a sovereignty issue.

Agency Sues Tribe Over Campaign Funding.  In an important test of the reach of tribal sovereignty, California's political watchdog agency is suing one of the state's wealthiest and most influential Indian tribes, accusing it of violating campaign finance-reporting laws.  The Agua Caliente Band of Cahuilla Indians, which operates two casinos in and around Palm Springs, argues those laws do not apply to it because it is a sovereign entity. The Fair Political Practices Commission says California has the right to ensure the integrity of its election system.  Associated Press, Baltimore Sun, 1-7-03

Some communities want to enforce local regulations, and some simply want to keep Indian gaming out.  The state is a partner in nearly all of these efforts.

Manzanita Band Told To Halt Work.  Attorney General Bill Lockyer has ordered the Manzanita Indian band to halt construction on a large off-road, motocross and casino project in East County, saying the work appears to be violating the tribe's state gambling compact.  In a letter faxed to the tribe Monday on behalf of the Governor's Office, Lockyer said Manzanita has not fulfilled its obligations to consult state and local government, conduct environmental reviews and adopt public health and safety ordinances.  Chet Barfield, San Diego Union-Tribune, 1-10-03

Pomo Casino At Mare Island Rejected.  Vallejo official: Impact of $50 million complex makes it 'unfeasible'.  The Vallejo City Council has rejected a Ukiah tribe's proposal to build a casino on Mare Island.  The council chose three other proposals on Tuesday as finalists for development of the 120-acre parcel on Mare Island, a former Naval base that is now owned by the city. The council considered proposals from five developers before making the decision. Ucilia Wang, The Press Democrat, 1-10-03

Not everyone is against Indian casinos in California.  Senator Jim Battin is lobbying for expanded opportunity for gaming tribes.  His timing was perfect, just days afterward the Governor made his speech on the budget and said that he hoped to gain an additional $1.5 billion from Indian gaming.  Everyone agrees that to get that much, the Governor will have to be willing to allow Indian gaming to expand.

Slot Machine Cap Needs To Be Changed.  State Sen. Jim Battin, R-La Quinta, reiterated that removing the cap on the number of slot machines at Indian casinos would stimulate the state's economy and help reduce its deficit.  "Many Indian casino developments have been artificially limited because of the 2,000 slot machine limit," he said.  "Eliminating the cap would allow the marketplace to decide the success of Indian casinos, not the state of California."  … He said he favored tribes making some new kind of payment to the state, perhaps in exchange for removing caps on machines.  Dennis A. Britton and Jake Henshaw, The Desert Sun, 1-9-03

To the Governor, the process seems simple, allow the tribes more machines in exchange for a significant "contribution" from the tribes.  Davis' model appears to be Connecticut, where the tribes give the state 25% of the slot revenues.  The feds are not at all certain that such an arrangement will pass federal Indian law muster.  To make matters worse for the Governor, the chairman of the gaming commission resigned, just when it is time to begin renegotiating the tribal-state compacts.

U.S. Official Cautions On Tribal-Revenue Sharing.  The new chairman of the U.S. commission that regulates Indian gambling told tribal officials Thursday that revenue sharing between tribes and the state would not automatically meet with federal approval.  Philip Hogen, head of the National Indian Gaming Commission, told the Eighth Annual Western Indian Gaming Conference that Interior Secretary Gale Norton wrote to a New York tribe recently expressing concern over its revenue-sharing agreement with the state.  According to Hogen, the interior secretary has said she was thinking about "sending a shot across the bow to those folks who are going to be sending in new compacts to the secretary for review and approval — be careful where you go with this revenue-sharing business because they're not all going to be automatically approved."  …Under federal law, tribes cannot be taxed, but they can agree to share revenue.  Associated Press, Santa Fe New Mexican

Gambling Commission Chairman Stepping Down.  John Hensley, the widely respected yet controversial chairman of the state's gambling commission, has quietly informed Gov. Gray Davis that he is stepping down.  …It comes at a critical juncture, with the Davis administration about to start renegotiating the state's gambling agreements, or compacts, with more than 60 Indian tribes. Hensley apparently has agreed to stay through at least the initial stage of those talks.  James P. Sweeney, Copley News, San Diego Union Tribune, 1-16-03

On the other side of the country Foxwoods and Mohegan Sun are still the largest casinos in the world.  Mohegan Sun dominated the news first by beating Foxwoods in revenue for the first time and then by buying a basketball team.  One local reporter thinks that the momentum of the game has changed and Mohegan Sun is the new leader; exciting and energetic, while Foxwoods is ten years old, dated and tired.

Slots Out At Casino Allows Rival To Move Ahead. (Ken, something wrong with this title) Mohegan Sun outstripped Foxwoods Resort Casino in slot-machine winnings for the first time in December…  Mohegan Sun's win of $62,112,276 was $7.6 million higher than Foxwoods' win of $54,485,892.  Karen Florin, The Day, New London, Conn. Knight Ridder/Tribune Business News, 1-16-03

Sun Shining On Mohegans. It isn't just the new basketball team, luxury hotel, celebrity chefs, slot machines or affable tribal chairman, a former local cop who once rode his motorcycle with the Blues Brothers through the casino.  It's the buzz, and the Mohegans have it. Ten years after the arrival of Indian casinos in Connecticut, it's Mohegan Sun - not Foxwoods Resort Casino - that is creating the stir in the gambling world.  And that means big money for the Mohegans - money enough to spend $10 million on a women's basketball team and not worry about whether all those 10,000 arena seats fill up every night.  Rick Green, Hartford Courant, 1-29-03

Mohegan Announces Quarter Results.  The Mohegan Tribal Gaming Authority…announced its operating results for the first quarter ended December 31, 2002.  …Adjusted EBITDA for the quarter ended December 31, 2002 increased by $20.3 million, or 40.3%, to $70.6 million from $50.3 million for the quarter ended December 31, 2001. Mohegan Sun achieved a 24.5% Adjusted EBITDA margin for the quarter ended December 31, 2002 compared to a 20.8% Adjusted EBITDA margin for the quarter ended December 31, 2001.  PRNewswire, Yahoo Business

One Connecticut tribe got some bad news, no recognition, and no casino. 

Paugussetts' Rejection Ends Plan For Casino.  For the second time in two months the Bureau of Indian Affairs has denied a Connecticut tribe federal recognition, turning back the Golden Hill Paugussetts Tuesday and effectively squashing its proposal for a Bridgeport casino.  … The BIA's "proposed finding" by acting Assistant Secretary of Indian Affairs Aurene M. Martin ruled that the Trumbull-based Paugussetts failed in three of seven mandatory criteria. BIA researchers determined the tribe "ceased to exist as a distinct community" 180 years ago and that there is "insufficient evidence" that the group's current members are descended from historic Indians.  They also found no evidence of a tribe with an internal government or political process between 1802 and 1973. Since 1973, the BIA said, the tribe's political process has consisted of only "a few individuals."  Rick Green, Hartford Courant, 1-22-03

California and Connecticut will continue to be the story in Indian gaming.  Whether Governor Grey Davis can get $1.5 billion from the tribes remains to be seen.  And whether Foxwood and Mohegan Sun can maintain their dominate position without any serious competition also remains to be seen.  Massachusetts might want to sell monopoly, but there are other forces out there working to develop other Indian casinos in New York, Rhode Island, and Massachusetts.  In Pennsylvania, Rhode Island, Maryland and other states, there are forces at work to put slots in racetracks and to develop other casinos.  Nothing is certain at this point, except that big changes are underway.

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.