revenue allocation plan

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

October 26, 2009Matthew 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

October 26, 2009Matthew 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 →