off-reservation gaming

Fitch Ratings Waiting for Federal Government to Make Indian Gaming Decisions

Matthew L.M. Fletcher

From dBusinessNews (via Pechanga):

In a special report released today (Nov 2009 Fitch Report), Fitch Ratings says there are two important issues that will determine the future for the Native American gaming industry’s expansion: whether tribes will have access to the debt capital needed to finance growth, and federal government policy decisions regarding approvals for future Native American gaming developments on off-reservation lands. Investor sentiment on the Native American gaming sector has soured in this economic downturn, as poor trends in regional gaming markets pressure credit profiles, three tribes defaulted on bond payments in 2009, and the Mashantucket Pequot Tribal Nation recently announced a forbearance agreement with its senior lenders after the Tribal Chairman made comments highlighting investors’ concerns about the unique legal issues involved in lending to a tribal government.

Fitch believes many investors are likely to take a ‘wait-and-see’ approach with respect to these ongoing debt workout and restructuring efforts before committing significant additional funds to the sector, making it unlikely a tribe would be successful in arranging debt financing for a large-scale greenfield casino development at the present time (for additional information on this topic see Fitch research ‘Managing Through Distress: Considerations for Investors in Distressed Native American Gaming Credits’, dated May 11, 2009). However, over the longer term, the federal government’s policy stance with respect to approvals for off-reservation gaming projects will be the most important factor shaping the future growth path of the Native American gaming industry.

‘Right now the Native American gaming sector is feeling the effects of poor gaming operating trends and unfavorable credit market conditions, but those issues are likely to be less limiting down the road assuming an economic recovery and improved investor sentiment on the sector,’ said Megan Neuburger, Director at Fitch. ‘Actions taken by the federal government under the Bush Administration in 2008 were clearly an effort to curb off-reservation gaming expansion. Department of Interior officials have recently made public comments that they are in the process of reviewing their policy on off-reservation gaming approvals, and we’re closely following the developments to assess their impact on the industry.’

According to the report, since the promulgation of the Indian Gaming Regulatory Act (IGRA) set the framework for the Native American gaming industry in 1988, there has been significant political controversy. Proponents of expansion tout the benefits of economic development, while opponents decry ‘reservation shopping’ and the ills associated with the expansion of casino gaming. While it has never been easy for a tribe to obtain the regulatory approvals necessary for gaming on off-reservation land, recent developments have made the likelihood of a successful outcome even more remote. These developments include guidance and a rule published by the U.S. Department of the Interior in 2008, as well as the 2009 U.S. Supreme Court ruling in Carcieri v. Salazar.

In the special report, Fitch explains these developments, the associated impact on the approval process, and the actions the federal government may take under the Obama Administration with respect to these issues, as well as providing a summary of the implications for the credit outlook for the sector. ‘Native American Gaming Insights: Off-Reservation Gaming Approvals: How Will the Feds Play Their Hand?’ is now available on Fitch’s web site at ‘www.fitchratings.com’.

Additional information is available at ‘www.fitchratings.com’.

Off-Reservation Gaming Review Close to Completion

Matthew L.M. Fletcher

From ICT:

NEW YORK – Sen. Charles Schumer, D-N.Y., says the Obama administration will make a critical decision on off-reservation gaming policy in the coming weeks.

Schumer told the Times Herald Online that he recently spoke with Interior Secretary Ken Salazar, who is reviewing a “guidance memorandum” issued by former Interior Secretary Dirk Kempthorne in January 2008. The controversial guidance placed a new hurdle on land into trust applications for gaming – a “commutability” standard under which the applied-for land is to be considered in light of its distance from a nation’s reservation, regardless of whether it is within a nation’s historical territories.

The memo caused an uproar across Indian country, not only because distance isn’t mentioned in the Indian Gaming Regulatory Act, but also because the guidance effectively amounted to a new regulation that had been promulgated without consultation with the nations, raising memories of the days of federal paternalism and policies to keep Indians on reservations.
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D.C. Circuit to Decide St. Croix Off-Rez Gaming Challenge without Oral Argument

Matthew L.M. Fletcher

From Indianz:

The D.C. Circuit Court of Appeals has canceled oral arguments in an off-reservation casino case.

The court was due to hear St. Croix Chippewa v. Salazar on November 13. But the case will instead be decided on the briefs.

The St. Croix Chippewa Tribe and the Bad River Band of Lake Superior Chippewa Indianswant to build a casino in Beloit. The project enjoys strong local support.

The Bureau of Indian Affairs, in the final days of the Bush administration, rejected the casino, saying it was too far from the tribes’ reservations. Beloit is more than 300 miles away.

At issue is a January 2008 guidance memorandum that make it nearly impossible for tribes to acquire land away from existing reservations. The Obama administration is reviewing the policy but continues to fight the lawsuit.

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Has the St. Croix/Bad River Challenge to BIA’s Off-Rez Gaming Regs Been Mooted?

Matthew L.M. Fletcher

From Indianz:

The Ho-Chunk Nation today announced the purchase of land in Beloit, Wisconsin, where two other tribes have sought to build an off-reservation casino.

In a press release, Vice-President Daniel Brown said tribe said it hopes to pursue economic development opportunities in Beloit. “We are looking forward to the chance to talk with local leaders about potential opportunities to bring jobs, economic development, and further investments to the Beloit area,” he said.

The St. Croix Chippewa Tribe and the Bad River Band of Lake Superior Chippewa Indianswant to build a casino on the site in Beloit. The Bush administration rejected the project in January of this year, and the issue will be heard by the D.C. Circuit Court of Appealsnext week, on November 3.

In the press release, Brown said the Ho-Chunk Nation “remains the only tribal nation with a real opportunity to site a casino” in Beloit. The tribe’s Class III compact allows another gaming site in the state, he said, and the tribe has “federally-recognized aboriginal ties” to Beloit and the region.

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Hannahville Proposes Casino in Romulus

Matthew L.M. Fletcher2 Comments

From the Freep:

A group of American Indians from the Upper Peninsula again is proposing to build a casino development in Romulus that will include a 200-room hotel and retail space.

The Hannahville Indian Community has resubmitted its application to the U.S. Department of the Interior, Ken Meshigaud, chairman of the Hannahville community, said Monday at the Romulus City Council meeting.

Meshigaud told the council that he’s “more confident than ever” that the $300 million project will go through.

The previous administration in Washington, D.C., was against off-reservation gaming and last year dismissed 27 applications, including Hannahville’s, according to its attorney, Raj Wiener.

The 800-member community runs the Chip-In Island Resort and Casino in Menominee County in the Upper Peninsula.

Hannahville is asking the federal Bureau of Indian Affairs to place a portion of a 27-acre site at Vining and Wick into trust — allowing tribal members to own the land and use it for gaming, as a sort of extension of their 5,500-acre reservation near Escanaba.

Past opponents of off-reservation gaming, who have included Gov. Jennifer Granholm, have expressed concern that such developments are far from the people who are supposed to be benefiting from them. Granholm’s spokeswoman, Liz Boyd, did not have an immediate comment Monday night.

According to Meshigaud, the proposed Romulus casino would draw as many as 6 million visitors annually, including many from nearby Detroit Metro Airport, and generate hundreds of millions of dollars a year for the Hannahville community.

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Briefing in St. Croix Chippewa v. Salazar Off-Reservation Gaming Case Complete

Matthew L.M. Fletcher

Here are the briefs before the D.C. Circuit:

St. Croix Appellant Brief

Interior Appellee Brief

St Croix Reply Brief

Lower court materials are here.

WSJ on Off-Reservation Gaming

Matthew L.M. Fletcher1 Comment

From the WSJ:

The Obama administration may make it easier for Indian tribes to build casinos on land far from their reservations, a move likely to spur a wave of new casino development.

The Interior Department, which runs the Bureau of Indian Affairs, is reconsidering a Bush administration directive requiring that off-reservation casino sites be within commuting distance of the reservation. Many tribes, struggling with high unemployment and poverty on their reservations, are looking to casinos for jobs and other economic benefits.

Casino Applications

See where tribes have filed applications for off-reservation gaming.

“It’s an important issue. It’s a controversial issue and they’re rethinking it,” George Skibine, a deputy assistant secretary at the bureau, said in an interview last week. He added he expected a decision on whether to change the policy “fairly soon.”

Some governors, including Democrat David Paterson of New York and Republican Arnold Schwarzenegger of California, have come out in favor of certain projects in recent months.

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Menominee Sues Interior over Off-Reservation Gaming

Matthew L.M. Fletcher

Here’s the news article, via Penchanga, with an excerpt:

The Menominee Nation has filed a lawsuit that seeks to overturn the U.S. Department of the Interior’s decision to block the tribe from building a casino at Dairyland Greyhound Park.

The tribe filed the suit in the U.S. District Court in Green Bay on Friday against the U.S. Department of the Interior and Kenneth Salazar, current secretary of that department. The lawsuit asks the court to declare a January 2009 denial of the Menominee’s land-into-trust application to create a casino at Dairyland as invalid and unlawful and to overturn that decision.

And the complaint — Menominee II Complaint

Early Analysis of the Internet Gaming Regulatory Bill

Matthew L.M. Fletcher

H.R. 2267 has some very interesting tidbits in it. Section 5486(C) states:

No decision by a State under this subsection shall be considered in making any determination with regard to the ability of an Indian tribe to offer any class of gambling activity pursuant to section 11 of the Indian Gaming Regulatory Act. [page 40 of the bill]

Does this mean that Indian tribes can conduct internet gaming without a Class III gaming compact? If so, it might obviate the need for Indian tribes to seek off-reservation gaming opportunities. Why spend time, money, and effort to acquire lands near a metropolitan area, cut a deal with the local units of government and the state’s governor (and legislature), and persuade the Secretary of Interior to take the land into trust for gaming purposes … when the tribe can conduct internet gaming on-reservation? There are, after all, far more potential customers on the internet than in Detroit, or Milwaukee, or the Catskills, or San Francisco.

Off-Reservation Trust Acquisition for Gaming Purposes — Butte County v. Hogen

Matthew L.M. Fletcher1 Comment

The case is in the D.C. District Court and involves the Mechoopda Indian Tribe of Chico Rancheria. The district court holds that GTB v. U.S. Att’y is the “leading case” in the area! An excerpt:

The court agrees with Defendants that the County relies on too restrictive an interpretation of the IGRA in support of its contention that the Chico Parcel cannot qualify as a “restoration of lands.” The County contends that the term “restoration of lands” should be interpreted as including only a restored tribe’s former rancheria. But the IGRA does not define “restoration of lands”; therefore, courts have held it to be ambiguous and interpreted it broadly. See, e.g., City of Roseville v. Norton, 348 F.3d at 1020, 1026-27 (D.C.Cir.2003). If a broad interpretation is permissible, it certainly is in order here considering that the Tribe’s former rancheria, the Chico Rancheria, is no longer available for restoration because the City of Chico and the University have subsumed it. Accordingly, the Tribe sought to acquire lands as near as possible to its former Rancheria and, according to the OGC and agencies, within its original ancestral homeland, the Chico Parcel. Applying the Grand Traverse II factors and City of Roseville in light of the administrative record, the agency decisions must stand because they considered the relevant factors and articulated a rational connection between the administrative record and their conclusions. See Transcontinental Gas Pipe Line Corp., 518 F.3d at 919.

The materials:

butte-county-dct-opinion

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