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Michigan Sues Two Casino Tribes

LANSING, Michigan – As reported by the Crain's Detroit Business: "The state has filed a federal lawsuit against two American Indian tribes, seeking millions of dollars that the state uses to help support state economic-development operations.

"The suit, filed by Attorney General Mike Cox and the Michigan Economic Development Corp., asserts that the Little River Band of Ottawa Indians and the Little Traverse Bay Bands of Odawa Indians have violated state-tribal gambling compacts by withholding casino revenue due the state.

"At stake so far is at least $9.5 million, by state estimates, that has gone into escrow accounts instead of state coffers. The MEDC has put business-attraction marketing on hold and state international-expansion plans came to "a screeching halt," said Don Jakeway, the MEDC's president and CEO.

"…The dispute is over the Bureau of State Lottery's keno game, as Crain's first reported in April. The tribes believe the Club Keno game, played in bars and restaurants statewide, violates the tribes' gambling exclusivity under 1998 compacts and thus ends the requirement they share casino revenue with the state.

"In a statement, the Little River Band and the Little Traverse Bay Bands said tribal officials believe their interpretation of the revenue-sharing provisions in the compacts is 'legally and factually correct.'

"…The tribes say the Club Keno game, which began on Oct. 27, 2003, constitutes a commercial casino game. But the state says Club Keno is neither an electronic game of chance as defined under the compacts nor a commercial casino game that, within the compacts' meaning, could nullify revenue sharing. The Club Keno game also is just an expansion of a lottery keno game that existed since 1990, the state contends…"

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