California Dreaming

As we discussed in a mid-September post (see "The Compacts Are Dead, The Compacts Are Dead," Sept. 9th), the recent big news from California was the eleventh-hour demise of Governor Schwarzenegger’s proposed compacts with five tribes that would have changed the landscape of Indian gaming in that state.

The political upshot? Partisan finger-wagging with a pinch of special interest-group politics. Republicans accused Democrats with kowtowing to labor unions. Democrats pointed to Schwarzenegger’s last-minute efforts to dump the compacts in their lap to make them look bad. And the unions accused Schwarzenegger with trying to cozy up to well-moneyed tribes who otherwise would oppose his reelection efforts, while excoriating Indian tribes for being “opposed” to organized labor. For his part, Schwarzenegger played off the loss by reiterating that he was “committed” to working with gaming tribes who “deserve no less than the respectful consideration by the Legislature.”

No one seemed to have anything good to say about the proposed expansion of Indian gaming in the state of California. The tribes were simply hung out to dry.

Tune in to see what happens come January 2007 . . . which most likely is the next time we’ll hear anything in the California legislature about the compacts.

Eastern Shawnee Survey

Thread: Indian Gaming in the News

In Ohio, the Eastern Shawnee commissioned a telephone survey of residents of Canal Fulton, where the tribe hopes to open a casino-resort. Not surprisingly, the survey indicated that local residents needed more information about the proposed casino. Said the Canal Fulton city manager, "We already all knew that" -- that local folks weren't clear about the tribe's proposal. In fact, the city council received a petition with 350 signatures asking the city to learn more about the proposal.

We think it is imperative for local and state officials to gather good and accurate information on any proposed tribal casino. As we've said elsewhere, the stakes are too high for a lack of information, or bad information, to influence policymaking on Indian gaming. That's not to say that we think every city should embrace a tribal casino; there are many factors, some that are particular to a community or a state or a tribe, that must be assessed in making that decision.

As we're fond of saying, we don't tell folks *what* to think about Indian gaming, but we're happy to offer assistance in *how* to think about issues related to Indian gaming.

Steve’s Quoted in These Articles on the RIGHT Bill’s Defeat

Thread: Proposed IGRA Amendments

Steve’s quoted in the September 14th edition of the San Diego Union-Tribune and the September 13th edition of the Massillon Independent (Ohio) on last week’s defeat of House Rep. Pombo’s RIGHT bill. [We discuss that defeat in our post from last week, “Looks Like the RIGHT Bill is Wrong (Temporarily, at Least)”]

In these articles, Steve says he expects congressional efforts to reform the Indian Gaming Regulatory Act to continue into the fall.

Some may paint the defeat of Pombo’s bill is as simply the result of, say, the flow of tribal campaign contributions (which the Union-Tribune article points out tend to favor Democrats).

It’s true that election-year politics may be paramount in this case. And sure, the interests of tribal constituencies may overlap with the politics of partisanship. But it’s even more complicated than that.

As Steve notes, Democrats historically have been greater advocates for tribal sovereignty as well as tribal interests. Tribal sovereignty is the federally recognized basis for Indian gaming. To the extent that the defeat of this bill reinforces tribal sovereignty, partisan politics work in tribes’ favor –- for the time being.

Paul M. Krawzak and James P. Sweeney, “House Rejects Limits on Off-Reservation Casinos, San Diego Union-Tribune, September 14, 2006, at http://www.signonsandiego.com/news/state/20060914-9999-1n14casino.html

Paul M. Krawzak, “House Rejects Bill to Block Casinos,” Massillon Independent (Ohio), September 13, 2006, at http://www.indeonline.com/index.php?ID=10347&r=0&Category

New Verse, But Same Old Song

Thread: Indian Gaming in the News

States trying to tax tribes is an American tradition. The general rule is that states cannot tax tribal governments (though the U.S. Supreme Court has carved out exceptions), and the express rule in IGRA is that states cannot tax tribal gaming. But that doesn't stop them from trying.

And it doesn't mean that states receive no tax benefits generated by tribal gaming; they indisputably do, either directly (such as state income tax paid by tribal casino employees) or indirectly (such as state tax paid by businesses that contract with tribal casinos).

The most obvious "tax" on Indian gaming is direct payments to the state. According to the U.S. Interior Secretary, tribal-state revenue sharing doesn't count as an illegal tax under IGRA if the tribe receives some benefit from the state, such as exclusivity in a gaming market. The first revenue sharing agreement was between the Mashantucket Pequots and Connecticut, in which the tribe agreed to pay the state 25% of its slot machine revenue in exchange for the exclusive right to operate slots in the state. (The agreement later was modified to allow slots, at a similar price, at the Mohegan Sun.) That translates into a whole heck of a lot of money going to Connecticut -- some $200 million a year.

Apparently, though, it's not enough. The town of Ledyard is trying to tax the slot machines that the Pequots lease from a vendor, rather than own outright. The town claims that it is owed $10,758 in taxes on the slots. The vendor and tribe are challenging the town's taxation, claiming that it interferes with the tribe's gaming operations and thus violates IGRA's prohibition against state taxation of Indian gaming.

Looks Like the RIGHT Bill is Wrong (Temporarily, at Least)

Thread: Proposed IGRA Amendments

House Rep. Richard Pombo’s Restricting Indian Gaming to Homelands of Tribes, or RIGHT bill, was rejected by a 247-171 vote today. Not unpredictably, the vote fell along party lines; Republicans in favor, Democrats against. The legislation in part fell pray to a procedural posture in which the bill was brought to the House floor under rules that limited debate, precluded amendments, and required a two-thirds approval for passage. Tribal associations and lobbyists also carried their message of opposition to key lawmakers.

The RIGHT bill’s main target was to do away with the "best interests" exception to IGRA's general prohibition against gaming on newly acquired lands.

“How this bill could be considered controversial – outside Indian gaming circles, of course – is beyond me,” said Pombo after the vote came down.

That statement could be seen as either curious or disingenuous. We can see clearly why the RIGHT bill is controversial. Indeed, we discussed why RIGHT is wrong (both wrong-headed and wrongly constructed) in our August 7th post.

Although the vote is a clear victory for Indian gaming-related interests and advocates of tribal sovereignty, it may be short-lived. Legislators now will turn to their prospects in the upcoming election, and may even point with pride to their vote on the RIGHT bill, but nothing guarantees the bill is dead.

From a different perspective – from the figurative 20,000 feet up, looking down – even the current bill’s demise demonstrates how beholden tribes are to Congress’s whims.

Indian Gaming and Wisconsin State Politics

Thread: Indian Gaming in the News

Here's a short excerpt from an online “chat” hosted by the Milwaukee Journal Sentinel with Paul Bucher, the Waukesha County District Attorney and a Republican challenger for the office of Wisconsin Attorney General.

Q: People tend to think that Indian gaming in Wisconsin is the same as Las Vegas gambling. The difference is in Nevada, the profit margins are set by the state, and here the Indians determine their take. How do you feel about what is happened in our state regarding the explosion of Indian gaming? How do you feel about the tavern industry and their attempt to level the playing field somewhat with the video poker machines many have?

A: Paul Bucher -- I support the tavern leagues’ attempt to level the playing field. I oppose the negotiation of Indian gaming compacts in secret. I support the legislature having a role in the approval of Indian gaming contracts. I also believe the AG MUST be at the table when these contracts are negotiated. I believe this not as a negotiator but as legal counsel for the state.

The exchange reflects the common perception that more state control of Indian gaming is necessary. It also highlights the sense of many state policymakers that tribes transact both the business and politics of Indian gaming “in secret” –- regardless of whether state officials themselves are in on the compact negotiations that set the terms.

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The Compacts Are Dead, The Compacts Are Dead!

Thread: Indian Gaming in the News

Big headlines last week, West Coast style. The proposed California compacts are dead – at least for the time being.

As the close of the state legislative session approached, Governor Schwarzenegger signed five compacts that would have dramatically changed the landscape of Indian gaming in California.

The compacts would have authorized the Morongo Band of Mission Indians, the Pechanga Band of Luiseno Indians, and the San Manuel Band of Mission Indians to triple the number of their slot machines, from 2,000 to as many as 7,500. (The “world’s largest casino” title currently resides with Connecticut’s Foxwoods casino.) The Sycuan Band would have allowed expansion to 5,000 slot machines, while the Yurok Tribe would have been authorized to operate 99 slot machines. The potential total? 22,500 new machines – a massive expansion of legalized gambling in the state, and a massive new revenue stream leading straight to state coffers.

With a flat fee on existing slot machines and a percentage cut on new machines generating as much as $22 billion for the state treasury through 2030, Schwarzenegger would have made good on his longstanding promise to provide a “fair deal” for the state of California. (We discuss the governor’s 2003 campaign rhetoric in our book, Indian Gaming and Tribal Sovereignty: The Casino Compromise, and show how it dovetails with a number of other pervasive perceptions of Indian gaming popularized by public officials and in the mainstream media.)

While the compacts for moment are waiting to be resurrected, the political and partisan finger-pointing is ongoing. Next time we’ll discuss the whys and wherefores of the compacts’ demise.

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

Thread: Indian Gaming in the News

As we discussed in a post on August 30, the Minnesota Court of Appeals ruled at the end of last month 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 Zander v. Zander case raises at least two issues. First, of course, is how Indian gaming interacts with other areas of law, such as family law. There remain many gray areas in the lacunae of the law governing the wide and varied implications of tribal gaming.

Second is the bigger issue of the role of tribal sovereignty and intergovernmental relations. The Minnesota court relied on its civil authority under Public Law 280, a termination-era federal law that delegated jurisdiction over civil actions involving Indians to some states, including Minnesota. But the brevity with which the Minnesota court dismissed the issue is disturbing, if not surprising. The court simply concluded, "Because Minnesota law governs this dissolution and because the Mdewakanton Sioux Tribal Domestic Relations Code is inconsistent with Minnesota law, the tribal code provision relied on by wife does not apply."

Minnesota Appeals Court judge David Minge dissented, noting that the per capita payments were not ordinary income, but distribution of government assets by the tribe. "The amount paid is akin to a lump-sum distribution of tribal government assets which would be parallel to the principle distribution of a gift under Minnesota law."