gaming

Marcia Yablon-Zug on Tribal Gaming Revenue Sharing and Indian Child Support

Matthew L.M. Fletcher

Marcia Yablon-Zug has posted “Dangerous Gamble: Child Support, Casino Dividends, and the Fate of the Indian Family” on SSRN. It is forthcoming in the William Mitchell Law Review.

The abstract:

Casino dividends have created significant wealth for many Indian tribes and have greatly improved the lives of their members. However, these benefits do not come without a price. Other scholars have noted the negative effects of gaming on tribal membership, culture, and identity but, there has been virtually no discussion regarding how casino gaming may hurt the Indian family. A recent case from the Florida Court of Appeals vividly illustrates how casino dividends can be used in ways that harm Indian families. In Cypress v. Jumper, the Florida court completely relieved an Indian father of any and all financial obligation to his children due to his children’s receipt of tribal casino dividends. In this article, I explore both the basis for, and ramifications of, this decision. I conclude that the court’s decision is not supported by previous case law permitting the consideration of children’s income but rather, is the result of the parties’ Indian ethnicity and the historic and continuing negative perceptions regarding Indian parents. I then explore the importance of child support and demonstrate that the benefits of paying child support are not simply monetary, but are also emotional and psychological. These additional benefits are especially important for Indian children who, given the centuries long assault on the Indian family, are more likely to experience family break down and the emotional and psychological effects of such breakdown than non-Indian children. Consequently, I argue that the Cypress decision creates a dangerous precedent that if followed, will allow Indian gaming to significantly harm Indian families.

Mohegan Tribe Per Caps under Scrutiny by Lenders

Matthew L.M. Fletcher

From the Day:

Times were flush when the Mohegans sought the U.S. Bureau of Indian Affairs’ approval of the tribe’s plan for distributing gaming revenues.

After ensuring that the plan provided adequate funding for tribal government and economic development, among other things, the deputy commissioner of Indian Affairs signed off on the plan on July 16, 2001. It calls for 40 to 50 percent of the tribe’s net gaming revenues from Mohegan Sun to be distributed to the tribe’s adult members on a quarterly basis.

More recently, on Jan. 4, 2008, the office of the secretary of the Department of the Interior approved a Gaming Revenue Allocation Plan submitted by the Mashantucket Pequots. Under the plan, up to 30 percent of the net gaming revenues generated by Foxwoods Resort Casino (including MGM Grand at Foxwoods, which opened in May 2008) are to be distributed to tribal adults “to help advance their personal health, safety and welfare.”

The plans, which the BIA requires of tribes that choose to make so-called per capita payments to members, have come under scrutiny in recent weeks, particularly in the case of the Mashantucket Pequots, who are seeking to restructure a debt load of more than $2 billion. Gaming industry analysts and the Mashantuckets’ creditors are more interested than ever in how the tribe distributes its gaming revenue.

The creditors were alarmed in late August when Mashantucket Chairman Michael Thomas, addressing tribal members about the “dire financial times” facing the tribe, vowed to protect funding for tribal government and per capita “incentive” payments from further cuts. The pledge, which many within and without Indian Country considered irresponsible, cost Thomas his chairmanship. Placed on administrative leave and facing a tribal council vote to expel him from the council, Thomas announced he would not seek re-election Nov. 1.
“He’s not that relevant at the moment,” Jane Pedreira, a gaming analyst with Rye, N.Y.-based Clear Sights Research, said last week.

With Thomas out of the picture, the investment world is keen to learn about the tribe’s funding of its tribal operations and the payouts its members receive. If they’re having trouble finding such information, “it’s not for our lack of looking,” one investor said.

Plans’ percentage breakdowns

Copies of the revenue-allocation plans, which The Day obtained from the BIA through a federal Freedom of Information Act request, detail the percentage breakdown of the tribes’ allocation of their net gaming revenues. The Mohegans’ 10-page plan specifies that 30 to 40 percent of the tribe’s revenue is to be dedicated to tribal-government operations and programs, including investments and education; 5 to 15 percent to the general welfare of tribal members, including investments, health, housing, social services and youth services programs; and 10 to 20 percent to economic development, both gaming and non-gaming related. Continue reading →

Detroit City Council Rejects Greektown Bankruptcy Deal

Matthew L.M. Fletcher

From FREEP:

The Detroit City Council voted 6-2 Tuesday to reject a $15.3-million settlement for the city that would have transferred ownership of Greektown Casino to a new company after the casino emerges from bankruptcy.

The vote came after a group of local investors, including former Highland Park Emergency Financial Manager Arthur Blackwell, made its case to the council that the investors deserve some form of payment in the bankruptcy.

“I’ve never heard of a deal where the casino has never lost a dime” being in bankruptcy, said Blackwell, an investor who sold most of his stake in Greektown to casino mogul Don Barden, but retains $5 million in Greektown options. “By voting ‘No’ … we’ve got hope for something.”

But Mayor Dave Bing said he will ask the council to reconsider its vote.

In a statement, Bing decried the vote as “an attempt to force the Greektown bankruptcy court to make payments to a small group of casino investors” that violates U.S. bankruptcy rules.

Continue reading →

News Coverage of Pokagon Band Casino Revenues

Matthew L.M. Fletcher

From Indianz:

The Pokagon Band of Potawatomi Indians continues to report strong slot machine revenues at its casino in Michigan. The Four Winds Casino took in $311 million on slots from August 2008 to August 2009, according to the Michigan Gaming Control Board. That’s slightly more than the $309 million reported in the casino’s first year of operation, from August 2007-August 2008.

“It’s still a new property. People still are coming to test it out,” spokesperson Tom Shields told The South Bend Tribune. The tribe shares 6 percent of slot revenues with the state and 2 percent with local communities.

Get the Story:
Four Winds rakes in $1 million per day in 2nd year (The South Bend Tribune 10/21)

Materials in North Carolina Gaming Case

Matthew L.M. Fletcher6 Comments

Here are the State’s briefs at least in McCracken and Amick, Inc. v. Perdue, the appeal of a trial judge’s decision in North Carolina finding it unconstitutional under state law for the State to enter into gaming compacts with tribes but not with other citizens of the State. The lower court opinion is here.

North Carolina Brief

North Carolina Reply Brief

Majority of Creditors Approve of Greektown Casino Reorganization

Matthew L.M. Fletcher

From the Freep:

Greektown Casino said Tuesday its plan of reorganization was supported by a majority of creditors, paving the way for it to emerge from bankruptcy after confirmation hearings next month.

Charles Moore, a turnaround expert for the casino’s estate, told the Michigan Gaming Control Board on Tuesday that 80.6% of pre-petition lenders representing $220.7 million in claims voted to accept the casino’s plan.

Voting results on the alternative plan offered by Luna Greektown LLC and Plainfield Asset Management LLC were not available Tuesday.

Creditors representing much smaller amounts owed voted overwhelmingly to reject the Greektown reorganization plan, according to a filing Tuesday with the U.S. Bankruptcy Court in Detroit. Confirmation hearings on the plan are to begin Nov. 3 and are expected to last four days.

The pre-petition lenders will receive equity in the new casino and be the new owners, Moore told state regulators. Fine Point Group would continue to manage the casino, he said.

The board also was told of a settlement between the City of Detroit and Greektown Casino that would give the city a $15.3-million payment and free the casino to seek a 5% tax rollback from state regulators.

Moore said that Greektown would approach the board at its next meeting Nov. 10 for approval. That would give the casino time during confirmation hearings the prior week to receive court approval for the rollback first.

The casino, under Chapter 11 bankruptcy protection, would reduce its annual city and state taxes by $15 million with the rollback.

The city had argued that Greektown Casino was not eligible for the tax break already extended to MotorCity Casino and MGM Grand Detroit casino because it violated its development agreement.

The casino, which opened its hotel in February, had argued that it met the requirements for its permanent facility then.

Moore also told the state gaming board that Greektown’s goal is to emerge from bankruptcy by Dec. 31.

Challenge to N.C. Video Poker Ban Heard in State Appellate Court

Matthew L.M. Fletcher

This case involved, if I recall correctly, a sort-of equal protection challenge to a state video poker ban in North Carolina on grounds that the N.C. tribes have gaming compacts, etc. Lower court opinion here.

From TV via Pechanga:

Appeals court judges hearing arguments Wednesday on the legality of North Carolina’s video poker ban sounded wary of negating the will of the General Assembly when it granted an exception to machines on the Cherokee Indian reservation.

Two of the three judges on the panel of the state Court of Appeals, which considered a Wake County judge’s ruling earlier this year that overturned the 2006 law, peppered an attorney for an amusement machine vendor with questions about why it should step into a legislative policy question.

Video poker machines could be permitted again in all 100 counties should the lower court keep the ruling in place.

“I always thought that the Legislature set public policy,” Judge Robert Hunter of Marion asked Hugh Stevens, representing vendor McCracken and Amick Inc., which sued over the ban. “You seem to argue that this is somehow contrary to the public policy of the state.” Continue reading →

City of Detroit OKs Greektown Bankruptcy Plan

Matthew L.M. Fletcher

From the Detroit News via Pechanga:

Detroit — A plan to hand control of Greektown Casino-Hotel to its largest group of creditors has been tentatively approved by the city of Detroit and could get the casino of out of Chapter 11 bankruptcy by the end of the year.
The tentative agreement was unveiled this morning at a meeting of the Michigan Gaming Control Board. The casino would be in the hands to the largest group of secured creditors, represented in the case by banking and investment giant Merrill Lynch.

“This is a major milestone,” said attorney Daniel Weiner of Bloomfield Hills-based Schafer and Weiner, who represents the debtors. The tentative agreement was reached with the city Friday, but needs approval by City Council, Mayor Dave Bing, the gaming board and U.S. Bankruptcy Court Judge Walter Shapero. A confirmation hearing in bankruptcy court is set for Nov. 3, which would be followed by a vote of the gaming board.

The other suitor for the hotel and casino was an effort lead by Bloomfield Hills business man Tom Celani, in partnership with Connecticut-based hedge fund Plainfield Asset Management.

Greektown’s owners, the Sault Tribe of Chippewa, filed for Chapter 11 protection on May 29, 2008. The Detroit casino has more than $777 million in debt.

Chuck Moore, a financial advisor working on the Greektown case, said he anticipates that the tentative bankruptcy agreement will ultimately be approved.

“We anticipate a contested confirmation hearing, but it will be approved,” Moore told the Michigan Gaming Control Board.

FMLA Claim against Soaring Eagle Casino Dismissed

Matthew L.M. Fletcher

Here is the court order in Sober v. Soaring Eagle Casino (E.D. Mich.), dismissed on grounds that the plaintiff failed to exhaust tribal court remedies (she did not appeal tribal court’s dismissal of her claim to the tribal court of appeals) — Sober v Soaring Eagle DCT Order

Here are the materials:

SCIT Motion to Dismiss

Sober Tribal Court Order

Second Circuit Summarily Dismisses Joe Frazier Suit against Oneida’s Turning Stone Casino

Matthew L.M. Fletcher1 Comment

Here is the opinion in Frazier v. Brophy — Frazier v Brophy CA2 Order

An excerpt:

An Indian Tribe is not a citizen of any state for the purposes of diversity jurisdiction. Romanella v. Hayward, 114 F.3d 15, 16 (2d Cir. 1997); Frazier, 254 F. Supp. 2d at 304. (“[T]he Court cannot assert diversity jurisdiction over this action as long as the Oneida Indian Nation (“Oneida Nation”) and the Casino are Defendants.”). Because an Indian Tribe is not a citizen of any state, the Oneida Nation’s presence as a party bars a federal court from hearing the matter under its diversity jurisdiction. Romanella, 114 F.3d at 16 (“[T]he diversity statute’s provisions for suits between citizens of different states, 28 U.S.C. § 1332(a), strictly construed, cannot be said to embrace suits involving Indian tribes.”); see also Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829 (1989) (holding that one stateless party destroys diversity jurisdiction). This accords with the treatment of other domestic sovereigns, such as states, which cannot sue or be sued in diversity. Romanella, 114 F.3d at 16. Given the continued presence of the Oneida Nation in this suit, the district court lacked subject matter jurisdiction to hear this case. We therefore remand with instructions to dismiss the matter.

And, importantly:

The dismissal of this suit from federal court does not foreclose all relief against the tribe, its casino, and its agents. The Oneida Nation has a trial and appellate court system staffed by former New York Court of Appeals Judges Stewart Hancock and Richard Simons. FACT SHEET: The Oneida Nation Court, http://www.oneidaindiannation.com/pressroom/factsheets/26965674.html (last visited October 2, 2009). To the extent Frazier has live claims against the tribe, its casino, or the casino’s employees, he could attempt to bring them there.