Detroit News Laments “Low-Rent Casinos” in Editorial re: Bay Mills Vanderbilt Casino Start-Up

A cheap shot from the News:

Editorial: Rolling the dice

Allowing a slot machine hall without state involvement opens door to proliferation of low-rent casinos

The latest tribal casino imbroglio illustrates what a tangled web government weaves when it attempts to determine who will be winners and losers in the marketplace. Five tribes want Michigan to crack down on a new slot machine hall the Bay Mills Indian Community has installed 100 miles south of its Upper Peninsula headquarters near Brimley, arguing it violates the spirit of the law allowing casinos on tribal land.

In a perfect world, casino locations would be based on business prospects. But because gambling is a regulated industry, the state is going to have to wade into this controversy, and Gov.-elect Rick Snyder will inherit the job of negotiating some new ground rules with the Indian communities regarding the proliferation of casinos.

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Santa Ynez Indians Sue IRS Over Tax Refund re: Gaming Per Cap Withholding

Here is the complaint, filed in Central District of California: Santa Ynez v US Complaint.

An excerpt:

11. During 2003 and 2004, Santa Ynez made “per capita” payments to its members from revenues derived from gaming activities. Federal law, at 25 U.S.C. § 2710(b)(3)(D), makes such payments subject to federal income taxation and 26 U.S.C. § 3402(r) make such payments subject to federal withholding requirements.

12. During 2003 and 2004, Santa Ynez failed to withhold, or underwithheld, federal taxes on payments made to some tribal members.

13. The IRS later conducted an audit of Santa Ynez for those years and assessed taxes, interest and penalties against the Tribe for 2003 and 2004.

14. On or about May 5, 2006, Santa Ynez paid the IRS $1,041,745.11 for tax year 2003 and $2,891,865.76 for tax year 2004 in full satisfaction of all amounts ostensibly owed under the audit.

15. Upon information and belief, the IRS received and credited the Tribe’s tax payments on or about May 10, 2006.

16. Subsequent to making its May, 2006 tax payments to the IRS, the Tribe determined that all, or virtually all, of the tribal members whose taxes had not been withheld, or had been underwithheld, had reported and fully paid their federal income taxes for years 2003 and 2004. As a result, the Tribe overpaid its withholding tax obligation for years 2003 and 2004.

 

Interlochen Public Radio on the Bay Mills Vanderbilt Casino Controversy

Here.

By Linda Stephan

A small casino that just opened last month in Vanderbilt is already growing. The Gaylord Herald Times reports leaders of the Bay Mills Indian Community are building on to the small facility, even as questions abound over its legality.

Several other Indian nations say it is not legal and that Vanderbilt is not place Bay Mills has any historic claim to. That’s a traditional litmus test with off-reservation gaming.

The state has yet to decide whether the casino is legal.

It’s no more than a few dozen slot machines and even after expansion, it will be just 2,600 square feet. But it’s widely speculated that this is a test case, and that the tribe would like to build in other places, such as Port Huron.

Play the audio above for more on the legal questions, as seen by Matthew Fletcher. He’s a member of the Grand Traverse Band and an Indian law expert at the Michigan State University College of Law. He spoke with IPR’s Linda Stephan.

 

Bay Mills to Expand Vanderbilt Casino

From Indianz:

The Bay Mills Indian Community of Michigan is already expanding its controversial off-reservation casino.

The tribe opened the 1,200 square-foot facility on November 3. A 1,400 square-foot addition will more than double the size of the casino.

“It’s going as well as we had expected. On opening day we were tickled pink with the number of people who showed up,” spokesperson Shannon Jones told The Petoskey News-Review

Other tribes say the facility is illegal. But Bay Mills says it’s entitled to open a casino in connection with a land claim settlement.

Get the Story:
Casino expands in Vanderbilt (The Petoskey News-Review 12/8)

Bay Mills Indian Community Submission to NIGC re: Vanderbilt Casino

This document was submitted in support the Bay Mills Indian Community’s amendment to their gaming ordinance, and appears to be the legal justification for their Vanderbilt casino.

Here it is: Bay Mills Submission to NIGC.

 

Ninth Circuit Remands Pauma Band Gaming Dispute to Trial Court in Light of Colusa Case

Here is that unpublished order.

An excerpt:

This case is remanded to the district court for reconsideration of all four ofthe Winter factors (see Winter v. Natural Res. Def. Council, – U.S. –, 129 S.Ct.365, 374 (2008)), and to re-analyze them in light of our recent decisions inAlliance for Wild Rockies v. Cottrell, 09-35756, 2010 WL 3665149 (9th Cir. July28, 2010) (amended Sept. 22, 2010) (articulating a post-Winter “sliding-scale”test), and Cachil Dehe Band of Wintun Indians of the Colusa Indian Cmty. v.California, No. 09-16942, 2010 WL 3274490 (9th Cir. Aug. 20, 2010) (altering theEastern District Court of California’s interpretation of the IGRA Compact formulafor determining the total number of Class III gaming licenses at issue). If uponreconsideration the district court determines injunctive relief is warranted, it mustjustify any alteration of the status quo. See Tanner Motor Livery, Ltd. v. Avis, Inc.,316 F.2d 804 (9th Cir. 1963).

Little Traverse Bay Bands Completes Financing Restructure

Here is the press release: LTBBOI Press Release Financial Restructure

An excerpt:

The Little Traverse Bay Bands of Odawa Indians (“LTBBOI”) is pleased to announce the completion of a financial restructuring with its bondholders. An exchange offer to holders of its $122 million 10.25% Senior Notes due 2014, which was launched October 26, 2010, has closed and is effective today.The transaction will result in the exchange of $143 million of existing Senior Notes and related unpaid accrued interest, for $23 million of cash and $40 million of new 9.0% Senior Secured Notes due 2020.

A Quick Note on Politics, Indian Gaming Lands Litigation, and Permissive Intervention

In the Gila River Indian Community v. United States litigation over proposed gaming lands benefiting the Tohono O’odham Nation, there have been numerous efforts by Arizona state politicians to intervene in the suit. No party seems to want them there, and they don’t seem to be adding a whole lot to the suit in terms of substance, and the court largely had refused to let individual politicians in the case — at first. Here are the first two orders, denying two such requests:

DCT Order Denying Sen Pearce Motion to Intervene

DCT Order Denying Scott Bundgaard Motion to Intervene

On November 19, however, Judge Campbell permitted the intervention of “Legislative Leaders” of the Arizona Legislature. Here is that order: DCT Order Permitting Intervention of Ariz Legislators.

Why?

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Commentary on the Schwarzeneggar v. Rincon Band Cert Petition

On December 10, 2010, the Supreme Court likely will decide whether to review the Ninth Circuit’s decision that the State of California failed to negotiate in good faith with the Rincon Band. This particular petition is very interesting on a number of levels, as it is really the first time a federal circuit has delved deep into the merits of a good faith claim under IGRA. Our guess is that the Court will not grant review, but it is a close question for reasons largely having to do with power politics (though we have been wrong before).

Here are the factors the Supreme Court uses to determine whether to grant cert.

(1) Circuit Splits. No split here, and perhaps there never will be. California may be the only state to have expressly waived its immunity to good faith suits under IGRA, and so the Ninth Circuit likely will be the only circuit to review this legal question for the foreseeable future. There aren’t even any splits in authority between state and/or federal courts for this reason. California in its cert petition resorted to asserting that the Department of Interior is generating splits in authority with itself by approving some compacts (Seminole Tribe) and disapproving others (Habemotolel Pomo) supposedly on revenue sharing grounds. Even assuming these two decisions cannot be reconciled (they plainly can be distinguished on the facts), we doubt there has been many (if any) cert grants based on a federal agency’s conflicting internal decisions. This factor weighs heavily in favor of letting the legal question percolate below. If there is a federal agency conflict, then let the parties appeal to the federal courts and see if any split in authority develops.

(2) Gross Error. Very unlikely that the Supreme Court would see a gross error here. This is a case of first impression, and so it would be very difficult for any court to make an obvious mistake like misapplying the correct precedents (since there aren’t any).

(3) Error Correction. This factor means that the Court will be disinclined to grant a case where the lower court merely got the facts wrong (from the point of view of the parties); in other words, cases labeled factbound. One could make a strong claim this case is factbound, given that the negotiations between governors and tribes are typically very heavily tribe-specific. A comparison between states is instructive. The 25 percent revenue sharing between Connecticut tribes and the state is entirely market-based, relating to the geography and gaming market available. The 10 percent sharing (generally) between Michigan tribes and the state also relates to the market of that region. The Rincon Band cert opposition brief does a good job of highlighting to the Court early that this particular negotiation involved only additional slot machines and the extension of the compact, not the compact from the ground up. The cert opp brief implies that this petition may even be virtually moot, in that the Colusa case expanded the pool of slot machines available to compacting tribes. In short, this is a very fact specific case.

(4) Importance. This is the key element in any cert petition — the most subjective factor in any decision made by the Court on a cert petition. And here is where Indian country is at its weakest.

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Federal Court Effectively Orders California Gaming Tribe into Arbitration over Negligence Claim

Here are the materials in Saroli v. Agua Caliente Band of Cahuilla Indians (S.D. Cal.):

Agua Caliente Motion to Dismiss

Saroli Opposition to Motion to Dismiss

Agua Caliente Reply

DCT Order on Agua Caliente Motion to Dismiss

An excerpt:

Section 10.2(d) of the Amended Compact provides that Defendant consents to arbitrate personal injury claims and that Defendant agrees to waive sovereign immunity “in any action brought in federal court … to (1) enforce the parties’ obligation to arbitrate, (2) confirm, correct, modify, or vacate the arbitral award rendered in the arbitration, or (3) enforce or execute a judgment based upon the award.” (Compl., Ex. A at § 10.2(d)(ii).) The parties submit no other documents showing a waiver of sovereign immunity. Based on the plain and express language of Section 10.2(d) above, the Court finds that, at most, Defendant has agreed to a limited waiver of sovereign immunity for claims relating to arbitration. The issue is now whether Plaintiff’s claims fall under this waiver.