Bits and Pieces from Indian Country - February 2003

Senators Renew Call For BIA Overhaul.  Connecticut's two U.S. senators Wednesday resumed their long-shot campaign to immediately halt federal recognition of Indian tribes and reform the way the Bureau of Indian Affairs does business.  By reintroducing a tribal recognition reform bill, U.S. Sen. Christopher Dodd is also certain to rekindle anger over what is perceived by some as "anti-Indian" legislation. …"This is a system that is broken," Dodd said, pointing specifically to the BIA's ruling recognizing the Eastern Pequots by combining two different tribes. "It is scandal that this process is applied so unevenly." Rick Green, Hartford Courant, 2-27-03

Plan Would Streamline Recognition Of Tribes.  The government could move faster in granting coveted federal recognition to Indian tribes.  …The bill introduced by Sen. Ben Nighthorse Campbell, R-Colo., would create an "independent review and advisory board" that would help the Bureau of Indian Affairs evaluate evidence submitted by a tribe to determine whether it qualifies for recognition, according to a summary of the bill.  Nationwide, about 200 tribes are awaiting recognition decisions. The bureau is telling tribes that once they apply, they have to wait six years for a preliminary decision.  Katherine Hutt Scott, Norwich Bulletin, 2-5-03

Inouye Testifies For Bill.  Sen. Daniel Inouye today described federal recognition of Native Hawaiians as the last milestone in an often tumultuous relationship between the United States and the Hawaiian people.  …A bill from the Hawaii congressional delegation would set up a process for the United States to recognize a sovereign Native Hawaiian government that could have government-to-government relations with the federal government and the state of Hawaii.  Derrick DePledge, Honolulu Advertiser, 2-26-03

California is one of the major battlegrounds in the sovereignty wars.  Inyo County won the right to break into Bishop Paiute tribal buildings and confiscate tribal property.  And in probably the most far-reaching decisions, California won the right to enforce state election laws against Agua Caliente Band

FPPC Can Sue Tribe, Judge Says.  In a case believed to be the first of its kind in the country, a Sacramento Superior Court judge ruled Thursday that a California Indian tribe can be sued in state courts for allegedly violating state campaign finance laws.  In a 17-page decision, Judge Loren McMaster dismissed arguments by the Agua Caliente Band of Cahuilla Indians that it was immune from being sued in state court by the Fair Political Practices Commission because it was a sovereign nation, answerable only to Congress.  Steve Wiegand, Sacramento Bee, 2-28-03

In the meantime, Governor Davis and the tribes have moved a step or two closer to renegotiating the tribal-state gaming compacts.  The tribes have formed a negotiating coalition and appear ready to make some commitments to help the governor.  In exchange the tribes expect to be granted unlimited slots and other concessions.

Tribes Announce Coalition to Negotiate Tribal-State Compacts.  Twenty-one Indian tribes from across the state announced today that they have formed a coalition to reopen negotiations on Tribal-State Gaming Compacts next month.  Business Wire, Yahoo Business, 2-12-03

State's Tribes Willing To Share Casino Money.   Leaders of 21 California Indian tribes informed Gov. Gray Davis on Tuesday that they're willing to share money with the state and do more to mitigate their casinos' impacts on local communities in return for more slot machines.  Josh Richman, Oakland Tribune, 2-12-03

Governor Davis' announcement that he expected to gain $1.5 billion from the tribes to help balance his budget caught the tribes and everyone else in California by surprise.  Halfway across the country Wisconsin was facing a similar financial crisis and hoped to gain some relief from its tribes and their casinos.  Instead of catching the tribes by surprise, he caught legislature by surprise.  Governor Doyle of Wisconsin began negotiating before he made any public statements; in fact, the first two compacts have already been signed.  As soon as the first compact was announced the state legislature acted to restrict the governor's authority to negotiate compacts.  Doyle countered by vetoing the bill.  Stay tuned, in California, Wisconsin and other states Indian gaming is becoming extremely important and contentious.

New Gaming Compacts Figure Into Budget.  A small segment of the state budget includes money sent in by the 11 tribes that operate casinos under gaming compacts with the state.  That segment could grow, depending on where compact talks go between Gov. Jim Doyle and the tribes. Negotiations have been under way for weeks, Doyle spokesman Thad Nation said.  Nation said the compacts would be addressed in the 2003-05 spending package that the governor will unveil Tuesday. The package will include a plan to fix a projected $3.2 billion deficit.  John Dipko, Green Bay Press-Gazette, 2-17-03

Oneida Compact Allows More Games, Calls For Higher Payments.  The Oneida Tribe of Indians would pay the state $58 million over three years starting in 2004 in exchange for a permanent gambling compact that gives it more games and higher betting limits, the tribe said Wednesday.  The Oneida reached the agreement just minutes before Gov. Jim Doyle delivered his budget address Tuesday night.  …The perpetual compact would the first of its kind in Wisconsin, Marotta said.  Associated Press, Star Tribune, 2-19-03

State Reaches Agreement With Tribe.  The administration of Gov. Jim Doyle late Monday afternoon announced a major new gaming agreement with the Forest County Potawatomi tribe, which operates the casino and bingo hall.  …The Potawatomi will pay $40.5 million in the first year of the agreement and about $43.5 million in the second, with a percentage of profits in following years.  Channel 3 News, 2-25-03

Lawmakers Want A Say In State Gaming Deals. Angered by what they portrayed as Gov. Jim Doyle's "giveaway" gambling deal with the Oneida Indian tribe, Republican lawmakers plan to take quick action Friday in an effort to strip his sole authority to enter into such agreements.  "I don't know if he wants to go down in history as 'Diamond Jim, the gambling governor,' but that's certainly what it looks like to us," state Sen. Bob Welch (R-Redgranite) said Thursday. "He is negotiating and signing contracts that basically give away the store."  Dennis Chaptman, Milwaukee Journal-Sentinel, 2-21-03

Doyle Vetoes Bill Giving Lawmakers Final Say Over Gaming Compacts. In his first veto, Gov. Jim Doyle on Friday rejected a bill rushed to his desk that would have required the Legislature to approve new gaming compacts that let American Indian tribes run casinos statewide.  Steve Walters, Milwaukee Journal-Sentinel, 2-28-03

And now for the only results available from tribal casinos, some reports from Foxwoods, Mohegan Sun, Turning Stone and the Mississippi Choctaw.  Non-reporting may soon become a national issue.  Senator John McCain of Arizona has suggested that tribes need to "fully disclose" casino operating results.  He makes the statement, he says, "as a 20-year friend of tribes."  Yea, right, one wonders what McCain had to think about before he discovered gaming.

Mohegan, Foxwoods Report Strong Business.  Despite a sluggish economy and chilly winter weather, both Mohegan Sun Casino and Foxwoods Resort Casino reported strong net slot wins in January.  Gamblers wagered a combined $1.47 billion at the state's two casinos last month, a 10 percent increase over the same period last year, the casinos said Friday.  The state treasury will receive $29.1 million from the earnings, a provision of the tribes' gaming compacts with the state.  Mohegan Sun, bolstered by an aggressive advertising campaign, pulled in $56.9 million in net slot revenues, an 18 percent increase over January 2002.  Las Vegas Sun, 2-18-03

Turning Stone Casino Turns Up Profits.   Profits at the Turning Stone Casino Resort have soared in the past five years.  According to a report sent to potential investors in December, profits at the casino rose from about $45 million in the 1998 fiscal year to nearly $70 million last year.  The casino made last year's profit on total revenues of $232 million. That's a profit margin of about 30 percent.  Glenn Coin, Syracuse Post Standard, 2-20-03

Casino Opening Hurts First- Quarter Earnings For Choctaws.  The Choctaw Resort Development Enterprise has reported a $10.5 million loss in first-quarter earnings from the previous year due to the expense of opening a new casino.  Net income for the first quarter ended Dec. 31, 2002, was $9.4 million compared with $19.9 million in the previous first-quarter.  Revenue was $68.5 million – up $11.3 million, or 19.8 percent – compared with $57.2 million for the first quarter ended Dec. 31, 2001.  Associated Press, Neshoba Democrat, 2-19-03

Expansion, as exciting as it is, is an economic bubble.  The current gaming expansion bubble is driven by the economy, state budgets and the "leveling of the playing field" effect.  Leveling the playing field is the term used to describe the pressure from conventional gaming operators for the opportunity to operate under the same conditions as Indian casinos.  Regardless of its causes, the bubble will burst; just as the tulip, Florida land development and dot.com bubble burst.  The dynamics of competition as outlined by Michael Porter in his famous work, Competitive Strategy, apply to the gaming industry just as surely as they do to the automobile industry or any other.  The end result of the expansion, competition and bursting bubble will be simple.  Not all casinos, suppliers or manufacturers will succeed; not all states, cities or Indian tribes will be successful with gaming.  There is a high cost in gaming, a high cost to enter, a high cost to operate (due to regulation) and a high cost to compete.  And there is a price for failing, the exit price.  Every state (individual and company) rushing to get on the bandwagon would be well served to weigh the costs as they consider the benefits.