Gaming Per Caps Are Marital Property Under State Law, Part I

Thread: Indian Gaming in the News

Last week, the Minnesota Court of Appeals ruled in Zander v. Zander that per capita distribution of gaming profits to tribal members counts as income (rather than the equivalent of a gift or inheritance), and thus is subject to division as marital property in divorce cases. This is true even if one spouse is not a tribal member.

The case involved per capita payments made by the Shakopee Mdewakanton Sioux Community, which operates the highly profitable Mystic Lake Casino near the Twin Cities of Minneapolis-St. Paul in Minnesota. The wife, who was a tribal member, received $84,000 each month in per capita payments. Her husband was "voluntarily unemployed." When they divorced, the husband sought his "fair share" of the payments.

Minnesota law presumes that all property and income obtained by either spouse during the marriage is marital property; the exception is gifts or inheritances, which belong to one spouse and are not divided in the event of a divorce.

The wife's attorney argued that as a tribal member, the per capita payments were made according to her "birthright as a member of the Mdewakanton Sioux, a sovereign nation." Tribal law supported this argument, as the Mdewakanton Sioux Tribal Domestic Relations Code specifically provides that per capita payments are not marital property. Yet the Minnesota court refused to abide by tribal law, saying that it applied only in tribal court. The tribal government was not party to the divorce proceeding in state court.

What broader issues does the case raise? We’ll discuss that next time.