From Mlive:
The Gun Lake Tribe’s compact may be a model for agreements to be renegotiated in the next four to five years, according to James Hill, professor at Central Michigan University.
The compact is different from earlier agreements in three major ways. The tribe agreed to share revenue on an increasing scale, beginning with eight percent and rising to 12 percent of slot machine revenues, calculated on gross revenues. As the tribe makes more, it pays the state a higher percentage.
That might be the wave of the future, Hill said.
Another difference is the size of the exclusivity zone. instead of the whole state, the Gun Lake Tribe agreed to nine counties surrounding its Wayland casino.
A third difference is the makeup of the local revenue-sharing board. For the first time, three tribal representatives will join three local government representatives on the board.
“The compact sets forth responsible terms for the operation of the Gun Lake Casino. it protects the interests of all respective governments: tribal, state and local,” tribal chairman D.K. Sprague said.
But Michael Jandernoa, chairman of 23 is Enough, a Grand Rapids anti-casino group, said a Good Friday agreement between the state and two other tribes resulted in the state settling for less, not more of a cut of casino profits. He questioned why Michigan was willing to accept only six percent of net receipts from the Little Traverse Bay Bands of Odawa Indians and the Little River Band of Ottawa Indians when some other states get at least 24 percent.
But according to John Wernet, deputy legal counsel to the governor and native-American-gaming attorney for Michigan, while some states may receive more than Michigan, others receive no cut.
The settlement made payments much more stable, Wernet added.
“in general, state law does not apply to Indian tribes or their members inside tribal reservations or trust lands. It’s been well established the state cannot tax within Indian Country, which is not to say tribes don’t pay any taxes.”
So states have to negotiate, they can’t demand, Wernet explained.
The Department of interior has interpreted the Indian Gaming Regulatory Act narrowly, saying territorial exclusivity is the only item of value states can offer tribes in exchange for a cut of casino profits. When the Detroit casinos were approved in 1996, the first seven tribes to sign compacts claimed the state had reneged on exclusivity and ceased to pay, Wernet said.
The Little Traverse and Little River bands put the money in escrow. The settlement agreement filed March 21 divided that $52 million escrow between the Michigan Strategic Fund and the tribes.
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