Last week, The Michigan Gaming Newsletter provided an overview of key issues that broadly affect Native American gaming across the country. This week’s coverage focuses on the issues affecting specific Michigan tribes and their gaming operations.

Gun Lake Revenue Payments to State Cease Due to Lottery Activities

Under its State-Tribal Gaming Compact, Gun Lake in the past provided  semi-annual revenue payments to the state based upon a sliding scale of between 8-12 percent of net win from electronic games of chance. Gun Lake separately provides payments to local units of government to mitigate costs associated with the operation of the Gun Lake Casino, calculated as 2 percent of net win from electronic games of chance.

As of June 1, 2015, Gun Lake ceased providing its state payments based upon the tribe’s interpretation of its State-Tribal Gaming Compact.

The compact has provisions providing for a reduction and/or cessation of revenue payments if the state introduces competing forms of gaming in the Tribe’s exclusive territory. Under the Indian Gaming Regulatory Act, states are prohibited from taxing tribes, and past precedent has only allowed states to share in revenue if the tribe receives something of value in return in the compact (such as an exclusive territory).

Several media reports have indicated that Gun Lake believes that the state’s authorization of online lottery sales and certain new gaming machines violates the exclusivity provision in the tribe’s market area.

On Monday, August 17, 2015, the Michigan Economic Development Corporation (“MEDC”) issued a statement partially attributing potential staffing cuts to the cessation of semi-annual revenue payments from the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians (“Gun Lake”).

“We have experienced a steep reduction in our current year MEDC Corporate revenue, stated Steve Arwood, Chief Executive Officer of the Michigan Economic Development Corporation. “The Gun Lake Tribe has a dispute with the state of Michigan regarding the terms of their compact and ceased making payment on June 1.  The current budget year impact is approximately $7 million dollars to our operating budget.  It is not known when the dispute may be resolved.  As this is a bi-annual payment, the revenue implication could be double over a full fiscal year.”

Proposed Lansing Casino

In early August, the Lansing State Journal reported that Lansing Mayor Virg Bernero remained confident that a proposed tribal casino for downtown Lansing would be approved by federal officials. Mayor Bernero reportedly stated that he had received encouraging information from federal officials on allowing the Sault Ste. Marie Tribe of Chippewa Indians (“Sault Tribe”) to acquire land for the purposes of building a casino facility.

The development is currently subject to litigation between the Sault Tribe and the State of Michigan. The State filed the lawsuit in September 2012 after the Sault Tribe sought to have certain lands in downtown Lansing taken into trust by the federal government for the purposes of using the land for a casino development. The initial suit was dismissed by mutual agreement of the parties after the Supreme Court issued its opinion in Michigan v. Bay Mills Indian Community, which affected the claims in the Sault Tribe suit. The State subsequently filed an amended complaint on February 3, 2015, arguing that the Sault Tribe’s attempts to take the Lansing land into trust would violate its State-Tribal Gaming Compact. In March, the Sault Tribe filed a motion to dismiss the suit on sovereign immunity and procedural grounds. While the court held a hearing on June 17, 2015 on the motion, it has yet to issue its ruling.

The case is State of Michigan v. Sault Ste. Marie Tribe of Chippewa Indians, et al, US District for the Western District of Michigan, Case No. 1:12-cv-00962.


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