Indian Casino Challenge Raises New Questions

26 January 2000

By David Waddell

Last week, a Circuit Court Judge ruled that the four Tribal-State gaming compacts approved by Michigan's legislature in 1998 are invalid. Judge Peter D. Houk, Chief Judge of the Ingham County Circuit Court held that the Legislature's approval of the compacts by joint resolution violated state law. In making this decision, Judge Houk concurred with an opinion previously given by Michigan's former Attorney General Frank Kelley.

Judge Houk's decision concerns Class III (casino-style) gaming compacts between the State of Michigan and four Indian tribes, all of which have made some progress toward building and operating a casino. The Little River Band of Ottawa Indians opened a casino in Manistee in late summer of 1999, and have already announced plans for a $50 million resort and expanded casino facility. The Little Traverse Bay Bands of Odawa Indians have completed a temporary facility in Petoskey, and expect to be open by the time of this column's publication. The Pokagon Band of Potawatomi Indians have identified a casino location and hired a developer for its casino near New Buffalo. The tribe is still in negotiations with local government bodies on issues like revenue sharing, but expect to file next month for land to be taken into trust. The Huron Band of Potawatomi Indians has selected a spot for its casino near Battle Creek, and is currently at work purchasing the land to be taken into trust.

The challenge to the 1998 compacts has a long history, dating back to just after the approval of the compacts. Two state legislators, who were joined by the Jackson County Treasurer, initiated the suit in Federal District Court in January of 1999. Federal Judge David McKeague dismissed the suit, stating that federal court was the wrong place to challenge a state law. In June, one of the legislators, Representative Laura Baird (D-Okemos), joined with the grassroots group Taxpayers of Michigan Against Casinos (TOMAC) to challenge the compacts in state court. This case ultimately led to Judge Houk's decision last week.

At first glance, Judge Houk's invalidation of the compacts would seem to spell potential disaster for these tribes and their members, who have invested all this time and effort in vain. In addition, it is not difficult to see the decision causing problems for all of the state's Indian casinos (the 1993 compacts, which allow the previously existing Indian casinos in the state, were also approved by a Resolution). However, based on statements the Governor has made, there is sure to be a lengthy appeal process by the State of Michigan. Additionally, Indian gaming is a complicated issue that is rooted more in tribal sovereignty and federal law than in state law. Under the applicable federal law, the ultimate determination to close down an Indian casino can not come from a state judge, but only from the United States Attorney and the Bureau of Indian Affairs.

Judge Houk's decision is just the latest in a whole series of cases that have been decided both in state and federal courts in Michigan on tribal gaming issues. Michigan has truly become the legal battleground in which the nuances of the Indian Gaming Regulatory Act are being defined. Observers from all over the nation are watching and the decision made here will have major implications on other states in the years to come.