Gaming Guru

Bits and Pieces from Indian Country - April 2005

The Native Hawaiian Government Reorganization Act, known as the Akaka bill, is expected to reach the Senate for a floor vote no later than Aug. 7. It could happen sooner, and by the end of this year the Akaka bill could be law. By the end of this 109th Congress, in December 2006, a new government exclusively by, of and for Hawaiians could be carved out of the state of Hawaii forever… It is reasonable to anticipate that the new Hawaiians-only government and its territory will have at least all of the sovereignty, jurisdiction, governing powers and authority of American Indian tribes and reservations. Unlike typical contiguous Indian reservations, the "reservation" in Hawaii likely will be a checkerboard of sovereign enclaves on all islands and in neighborhoods, urban and rural. While every Indian reservation does not employ all the options listed below, all of these powers are available to every reservation and all are actually in place in various reservations…Although the bill says it does not authorize gambling, the bill does not prohibit it. Once the new sovereign government is formed, with tax-free money and unlimited campaign contributions, casinos surely will follow. Thurston Twigg-Smith, Earl Arakaki, Sandra Puanani Burgess and H. William Burgess, Hawaiian Reporter, 4-13-05

Senator John McCain of Arizona is at the center of many of the hearings. He is very active and very vocal. It may be theatrics, but it still bears watching. He is proposing changes to the Act without specifics that are critical of lobbyists and contractors and seem to be against off reservation casinos or "land shopping." Watching Congress is not unlike watching Wall Street: there are things that outsiders find very confusing at best and impossible to understand at worst. Are the committee members sincere? Are they pandering to voters or are they posturing for political reasons? We each have to answer those questions for ourselves.

McCain, chairman of the Senate's Indian Affairs Committee, said Wednesday he will seek tougher regulations for the booming tribal gambling industry, which far outpaced Nevada's as it took in $18.5 billion last year. McCain, R-Ariz., faced opposition from tribal leaders at a hearing where he called for changes including more money for oversight and new rules to keep tribes from passing off slot machines as less-regulated bingo devices. But he said it was high time to review the federal Indian Gaming Regulatory Act. …"I don't want this hearing to be viewed as some attack on Indian gaming," McCain said. "It's not. Indian gaming is here to stay. The question is, do we protect the patrons of Indian gaming to the fullest extent consistent with our responsibilities, and I think we have clearly identified some areas that need to be addressed." Erica Werner, Associated Press, Washington Post, 4-27-05

John McCain, chairman of the Senate Indian Affairs Committee, indicated support Wednesday for committee passage of a bill by Sen. Dianne Feinstein that would block an Indian tribe from building a Nevada-style casino across the bay from San Francisco. McCain, R-Ariz., said he would poll fellow committee members on their views on the legislation, and if a majority wanted a committee vote he would schedule one. But he added his own preference would be to move the bill out of his committee and get it a vote in the full Senate. "I'd just as soon move it forward and let the full Senate decide on an issue such as this," McCain said in an interview. Erica Werner, Associated Press, San Francisco Chronicle, 4-27-05

The Confederated Tribes of Warm Springs in Oregon live a little off of the beaten path. The tribes in Oregon that are close to Portland have done very well, those that are not close to Portland or another population center have done less well. Warm Springs is too far from a population center to be really successful and because of that have been negotiating with the state for a better location. They have finally made a deal. But the deal is not the news, but the creative way it is structured to avoid federal limitations on revenue sharing. The plan is to put money into a nonprofit corporation that would distribute the money for the state's purposes. It hasn't passed federal muster, but if it does, look for others like it; Governor Arnie needs all of the creative ideas he can find to get money from the tribes.

Federal law is clear: States cannot tax tribal casino gambling. Yet as part of Oregon's approval of the Confederated Tribes of Warm Springs' plan for a Cascade Locks casino, the state is requiring the tribes to set aside as much as 17 percent of the gross gambling revenue mainly for tuition assistance to Oregonians. But instead of going to the government like a tax, the money would funnel through an independent nonprofit fund. The nonprofit setup has never been tried in a tribal casino deal, so there is no guarantee it will pass muster with the U.S. Department of the Interior, which has the final say. If the department approves the plan, Gov. Ted Kulongoski will hit a jackpot worth as much as $30 million a year for the state. "This is a unique kind of arrangement," said David Mielke, a New Mexico attorney who specializes in tribal issues. "I think there will be a long, hard look at how this comports or doesn't comport" with tribal gaming law. Experts say Oregon's nonprofit proposal is one of many new attempts by states trying to get a slice of tribal gambling profits while staying within federal law. They've seen varying degrees of success, although only three off-reservation casinos have been approved since the Indian Gaming Regulatory Act was passed in 1988. Jeff Kosseff, Oregonian, 4-25-05

Oregon is not the only place that the state, a region or a city is eager to find a way to enable an Indian tribe to build a casino and contribute to the common coffers. The motivation is always money. In Ohio, Kansas, Nebraska, California and other states, tribes are being courted to bring the powers of the National Indian Gaming Regulatory Act to town, and, of course, share the largess with the town. California, viewed as a whole, could be described as schizophrenic. In some communities, the tribes and their casinos are welcome, in others they are the enemies. Senator Dianne Feinstein of California has gone to Congress to keep the Lytton Band of Pomo Indians out of the San Francisco Bay area. At the same time, the City of Garden Grove in southern California is rethinking its position and considering inviting a tribe to come to town.

Eight months after the Garden Grove City Council considered and rejected the long-shot notion of building a Las Vegas-style casino down the street from Disneyland, the idea is regaining momentum. "There is a looming budget problem three years from now that we have to solve," said Bob Fish, the city's Chamber of Commerce chairman and a member of the city finance committee. "To do that, we either need a dramatic reduction in expenditures or new income from services. A casino is something we need to take a serious look at. It would be irresponsible not to."… But new Councilman Harry Krebs wants to reconsider it. "I think putting this thing to sleep last year was premature," said Krebs, who was appointed in December to fill the seat vacated when William Dalton was elected mayor. "Personally, I'm not a gambler. But there are many people who do. So why not explore the benefits of having a casino here since we're always looking for funds?" Dave McKibben, Los Angeles Times, 4-24-05

In New York the stone is turning the opposite direction. The Supreme Court ruled that the owner of Turning Stone Resort, the Oneida Indian Nation, could not expand its reservation simply by reacquiring former reservation land and declaring it part of trust land, thereby avoiding state regulation. The decision has several interesting implications about taxation and other state regulations, such as a state smoking ban. It will take a long time and probably lots of litigation to work things out. In the meantime, the rest of Indian and non-Indian country is watching with interest.

A spokesman for Gov. George Pataki said enforcing the state smoking ban at Turning Stone Resort and Casino is "one of the issues under discussion" as the state continues to analyze the U.S. Supreme Court's decision in last month's Sherrill property tax case. "We're determining what the extent of (the ruling's) impact is going to be," said Pataki spokesman Todd Alhart. The high court ruled that the Oneida Indian Nation could not expand its sovereign territory simply by reacquiring former reservation lands and declaring them sovereign and tax-exempt. The decision has called into question the tribe's sovereign status at its Verona casino. Without that, any state law could be enforced there…Still, anti-smoking groups have renewed their efforts to get the smoking ban enforced at Turning Stone in light of the new sovereignty question. "Why should casino employees not be given the same rights as their counterparts in bars and restaurants?" said Amy Norpell, a spokeswoman for the local chapter of the American Cancer Society. "We're working toward the day when all businesses in New York state are smoke-free." Alaina Potrikus, Syracuse Post-Standard, 4-24-05

The Native State of Hawaii; nonprofit taxation funds, a reservation here, but not one there--April produced some very interesting twists to a very twisty road. But that is the nature of our system; a government of laws, an adversarial legal system and a market driven economy. Those three work together, not in a linear and easily understood way, but in non-linear ways that defy conventional logic. In New York a series of laws, followed by litigation are threatening to stall the market forces that lead to the development of mega-casinos founded in the nurturing hands of the original legislation. What is next? The problem resembles the problems described by the science of complexity. Taken on their own, each of the three forces could be described and its affects predicted in a linear fashion. Add the three together and prediction becomes much more difficult. What new laws will be passed; what new court decisions will be made; what will the economic conditions and forces of the next year, the decade or other period be? If you were certain about each, you might predict the outcomes. I am not certain about any of the three and certainly not about the outcomes. I am certain about the growth of gaming, gaming legislation and gaming litigation. The rest is my reality television; I get up every day eager to tune into the latest episode.

But now, that is simply my opinion, isn't it?

Ken