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Best of Chris Sieroty

Gaming Guru

Chris Sieroty
 

Native American casino lawsuit allowed to proceed

19 June 2012

The U.S. Supreme Court won't stop a lawsuit that aims to shut down an operating Native American casino, which was built and is now operating in Michigan under a seven-year contract with Las Vegas-based Station Casinos, Inc.

The high court in an 8-1 ruling on Monday upheld a lower court decision that would allow Gun Lake, Mich., casino opponent David Patchak to sue to close the $165 million casino, which opened in February 2011.

Patchak, of Shelbyville, Mich., sued several years ago in a failed bid to block the opening of a casino in Wayland Township, some 20 miles south of Grand Rapids, Mich., by the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the Gun Lake Tribe.

Patchak challenged how the Interior Department had placed the land in trust for the tribe, arguing that the move was illegal because the tribe had not been recognized by the federal government in 1934 when the Indian Reorganization Act was passed.

A lower court had dismissed the lawsuit, saying Patchak lacked the legal standing necessary to file it. But an appellate court found he did have the standing, and the Supreme Court agreed in Monday's decision.

"We are pleased that the U.S. Supreme Court has agreed that Mr. Patchak is entitled to his day in court," said Matthew Nelson, a partner at Warner Norcross & Judd who argued the case before the high court. "We believe that once Patchak's had his day in court, he will be vindicated."

Station Casinos spokeswoman Lori Nelson declined to comment Monday.

Station Casinos also has development and management deals with the Mechoopda Indian Tribe of Chico Rancheria near Chico and the North Folk Rancheria of Mono Indians for a casino near Madera. Both locations are in California.

The tribe issued a statement Monday noting while the high court's decision allows the lawsuit to go forward it doesn't say anything about the merits of the lawsuit. A tribal leader said they will continue to fight the lawsuit in federal court.

"The Supreme Court clearly stated that this decision was not based on the merits," said D.K. Sprague, tribal chairman. "This is simply a procedural decision that has no impact on operations at Gun Lake Casino."

Sprague said the decision simply means that Patchak's lawsuit can "go forward before the federal courts, which may take many more years to finally resolve it." He said the tribe was confident that "the facts will clearly prove once and for all that Patchak's claims have absolutely no merit."

The 76,000-square-foot casino, which employs more than 800 people, will continue to operate, according to tribal officials. The casino features more than 1,400 slot and video poker machines and 28 table games.

MGM Enterprises LLC, of which Station Casinos is a 50 percent partner, will manage the property for seven years, in exchange for a fee equal to 30 percent of the casino's net income.

The Gun Lake Casino has paid out more than $18.4 million in state and local revenue sharing since it opened last year. For the period from Oct. 1 to March 31, the tribe paid out $6.5 million to the state, while local revenues topped $1.5 million.

The Associated Press contributed to this report.
Native American casino lawsuit allowed to proceed is republished from Online.CasinoCity.com.