SEARCH HERE

Tuesday, March 11, 2014

Five Major Indian Gaming Issues to Watch in 2014

By Dennis J. Whittlesey

The New Year is well under way, and any number of Indian gaming issues will be debated over the next 10 months. The resolution or non-resolution of some of them could have significant and long-lasting impacts for Indian Country in general and tribal gaming in particular. High on anyone’s list of issues to watch are five that are in active discussion and even controversy.

1. Internet Gaming

Much of the current debate concerns potential state legislation authorizing I-gaming, with concerns raised about states in which tribes have an exclusive franchise for gaming. Another area of concern is that various states have extended to tribes various forms of “exclusivity” for their gaming, including (a) geographical and (b) specific types of gaming, such as slots. The tribes have made financial concessions to those states in return for some form of exclusivity, and protecting their position could be difficult if the scope of I-gaming would breach any exclusive rights ceded to tribes.

As for federal legislation, there seems to be little chance for action in 2014, but proponents continue to hold out some hope. For example, Senator Lindsey Graham (R-SC) has just proposed legislation for interstate I-gaming. Initially, little enthusiasm for his proposal has been expressed by Democrats or his fellow Republicans.

There are strong voices in Indian Country demanding that tribes have a place at the table when any legislation is proposed, regardless of the forum. The current phenomenal financial success of Indian gaming ensures that they will have a seat at the table, but the greater issue is whether it will be a united voice.

2. Off-Reservation Gaming

When the Indian Gaming Regulatory Act became law on October 17, 1988, Congress specifically provided that tribes can conduct gaming on “Indian lands” as defined as of the date of enactment. However, Congress realized that many recognized and non-recognized tribes seeking status clarification would be excluded from ever conducting gaming with a fixed date for lands qualification. That fact led to enactment of IGRA’s Section 20 – Gaming on lands acquired after October 17, 1988, which established various exceptions to the fixed date barrier. These exceptions provide a number of pathways through which tribes can secure “Indian lands” status for after-acquired lands. Among them was the provision at Section 20(b)(1)(A) providing that tribes unable to qualify for any of the other statutory exceptions could seek approval for gaming on “off reservation” lands.

Off-reservation approval is not easy and has rarely been granted in IGRA’s 25 years. While past Presidents have been reluctant to honor this statutory path for gaming status, the Obama Administration has been more amenable to such considerations. Most readers know that the Governors were given a veto over such applications after the Secretary of the Interior has first determined that the trust application should be granted. This veto – which was carefully considered during the drafting of the IGRA – was a major concession to the Governors who are lawfully empowered to act on behalf of their states.

Referendum challenges can also play a significant role in the off-reservation process. The North Fork Rancheria of Mono Indians of California has carefully negotiated the path to compact approval for an off-reservation casino after some 10 years of work, but now faces a threat that would wipe out its ability to proceed with development of the casino project. The threat arises out of the fact that California is one of a handful of states that require the state legislature to ratify tribal gaming compacts once approved by the Secretary of the Interior and the Governor. The State Constitution provides for state ballot consideration by the electorate of any state law upon submission to the Secretary of State with petitions containing sufficient valid signatures to invoke the referendum. Petitions challenging the legislature’s approval of the North Fork Compact with the required number of signatures have been certified by the Secretary of State, and the Compact approval will be on the November ballot for affirmation or rejection. The Referendum’s legality reportedly is being examined by attorneys interested in the North Fork casino development. This one is worth watching for sure.

3. State Renegotiations of Compacts Due to Expire

Class III tribal-state compacts are expiring in New Mexico, and the State has attempted to negotiate new compacts with provisions for revenue sharing not previously included. While the Governor has been largely successful, several of the Pueblo tribes have refused to accept the new demands for revenue sharing, and one – the Pueblo of Pojoaque – has filed suit in federal court claiming that the State has not negotiated in good faith as required by the Indian Gaming Regulatory Act. The State’s demand for revenue sharing is cited as bad faith negotiation.

There are other states in a renegotiation mode, starting with Florida which currently is in compact talks with the Seminole Tribe, owner of the Hard Rock franchise and seven tribal casinos, including major facilities in Tampa, Hollywood, and Coconut Beach. The negotiations are private, but the State won major financial concessions from the Tribe only a few years ago, and it is reported that further concessions are being sought by the Governor. Given the scope of Seminole’s Florida operations as well as its ownership of the Hard Rock brand, this negotiation is being closely watched throughout Indian Country.

4. Indian Gaming as Part of a Major Regulatory Reorganization of Gaming in Florida

As discussed above, the Seminole Compact negotiation is a big deal, both for Florida and Indian gaming in general. The Tribe’s negotiating team will be as experienced and savvy as any in the country. Whether the State can match it will be the story of this negotiation.

5. Tribal Disenrollments for Blatantly Financial Reasons

Over the past several years, there have been a series of publicized tribal enrollment revocations of enrolled members – including former tribal leaders – and their entire families. This phenomenon is disturbingly common and apparently limited to gaming tribes that make periodic per capita payments of casino revenues to enrolled adult members. Many tribes have found that, as tribal populations grew, the periodic – often monthly – revenue distributions had to be reduced since revenue growth was not matching the population growth. One solution is to reduce the tribal membership by expelling members, resulting in a smaller tribal population which, in turn, allows the tribe to return individual payments to their previous higher levels.

There is virtually nothing the expelled members can do. Legal challenges cannot be mounted due to tribal sovereign immunity and are routinely dismissed. Moreover, while the federal Indian Civil Rights Act of 1968 ostensibly offers legal protections to the victims of enrollment revocations, the reality is that the law is toothless and is not the vehicle through which individual Indians have gained much of anything in the way of rights protection. And the Bureau of Indian Affairs rarely takes any action, reiterating a long-standing position that the issue of tribal membership is purely an internal tribal matter and not something in which the federal government will – or even should – become involved.

Among the most notorious “enrollment reductions” are those implemented by the Pala Band of Mission Indians of California, the Picayune Rancheria of Chukchansi Indians of California, and the Nooksack Tribe of Washington. Each (i) has operated a tribal casino for years, (ii) has been making per capita payments to its enrolled members, (iii) has now disenrolled scores of members, and (iv) began disenrolling members after experiencing downturns in casino cash flow and was forced to reduce per capita payments.

To read the complete article, please check out the latest edition of Gaming Legal News.