On November 20, 2013, several tribal-state gaming compacts, agreements between tribal entities and the State of Michigan that authorize and regulate tribal casino-style gaming operations, came to the end of their initial 20-year terms. Significantly, the compacts remain in effect under a clause that allows the continuation of the agreements during ongoing renewal negotiations. MIRS recently reported that the Governor’s office is preparing a proposal to be offered to the affected tribes. The Governor’s office has yet to release details of any proposed renewal options or terms.

The original compacts for seven tribes were entered in 1993, a time when Native American gaming was an expanding but relatively new opportunity for tribes across the country. Michigan had not yet authorized commercial gaming in Detroit, the Michigan Lottery did not conduct online sales, and neighboring jurisdictions had strong prohibitions or a greatly reduced scope of gaming activity when compared with today.

These factors, among the national and regional developments detailed below, have greatly changed the landscape of tribal gaming in Michigan and will likely be considered in the ongoing tribal-state compact negotiations.

Tribal Land Acquisitions

Under federal law, much of tribal casino-style gaming is limited to lands that have been taken into trust by the Department of the Interior (“Department”) on behalf of the tribe. The land-into-trust process is a thorough and comprehensive review of historical tribal claims to certain lands which requires voluminous filings and regulatory considerations. The process was greatly complicated after the Supreme Court’s decision in Carcieri v. Salazarin 2009, due to the Court’s holding that the Department’s authority to take land into trust for tribes that received federal recognition after 1934 was significantly limited.

Federal legislators, however, are currently seeking to amend the law in order to address the Carcieri decision. On July 28, 2015, Senate Bill 1879 was introduced in the United States Senate in an effort to clarify and ease restrictions related to land acquisitions in Indian Country. The legislation, The Interior Improvement Act, aims to address legal and regulatory issues that have arisen since the Carcieri decision, as well as to remove duplicative filing requirements, increase tribal and public input into the decision making process, and generally make the review easier for tribes to manage.

Continued Tribal Gaming Revenue Growth

In July, the National Indian Gaming Commission (“NIGC”), which oversees tribal gaming at the federal level, released revenue reports that show that tribal gross gaming revenues have steadily increased since 2005. Over the past ten years, revenues have grown from $22.6 billion in fiscal year 2005 to $28.5 billion in 2014, a 26% increase. Over this time, the only year-over-year decrease in revenues occurred between 2008 and 2009, during the global economic recession. The report also indicates that there are 459 tribal operations nationwide.

While the NIGC does not report state-specific tribal gaming revenues, the regional revenues for the St. Paul region, which includes Michigan, amounted to $4.7 billion across 130 gaming operations in 2014. In addition to Michigan, the region includes Montana, Wyoming, Nebraska, the Dakotas, Minnesota, Iowa, and Wisconsin.

Federal Labor Authority over Tribal Casinos

Recent federal court decisions have hesitantly confirmed past precedent that the National Labor Relations Board (“NLRB”) has authority over labor activities at tribal casinos. On July 1, 2015, the US Appeals Court for the Sixth Circuit ruled in favor of the NLRB in a labor dispute involving the Saginaw Chippewa Indian Tribe of Michigan (“Chippewa”) and the tribe’s operation of the Soaring Eagle Casino and Resort. The case involved an employee who attempted to organize and promote union membership among her peers at the casino. The Chippewa, however, maintained a strict “no-solicitation” policy prohibiting such activities by its casino employees.

In its ruling, the court agreed that the National Labor Relations Act (“NLRA”), the federal law that governs the NLRB and requires employers to allow employees to organize under certain circumstances, should not apply to the Chippewa because the law would violate the tribe’s inherent sovereign rights. However, although the court heavily criticized its recent ruling in a similar case involving the Little River Band of Ottawa Indians, finding that the review standards used in the case “overly constrains tribal sovereignty, fails to respect the historic deference that the Supreme Court has given to considerations of tribal sovereignty in the absence of congressional intent to the contrary, and inconsistent with...Supreme Court directives,” the court ultimately held that it was “bound to conclude that the NLRA applies to the Soaring Eagle Casino and Resort, and that the [NLRB] has jurisdiction over the present dispute.” Thus, the court affirmed the previous finding that the Chippewa were bound to comply with the NLRA due to its past holdings despite its disagreement with those rulings.

The above are only a few of the many developments that have occurred in Indian Country since the 1993 Michigan tribal-state gaming compacts were entered. While details regarding the negotiations continue to remain private, the changes in the tribal gaming landscape will likely influence the final terms of any new agreement reached.

 

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