Casino ruling riles tribes

A major policy change this year by the Interior Department will slow the growth of the multibillion-dollar Indian casino industry.

The change, made in a series of letters and a memo issued in early January, essentially rejected 22 applications for new off-reservation casinos by hinging their approval on a single criterion -- the distance from the reservation.

Although the change was hailed by opponents of the sprawling business that raked in $25.1 billion in gambling revenues in 2006, many tribes attacked the ruling as unfair and unjust, robbing them of what many consider their only economic opportunity.

“We were shocked by the lack of due process involved,” said Mark Van Norman, executive director of the National Indian Gaming Assn. “The Department of Interior created a new regulatory standard one day, didn’t notify anybody and applied it the next day.”

The St. Regis Mohawks in upstate New York, one of two tribes that sued the department, called the decision racist and paternalistic because it purported to look out for the best interests of the tribes by supporting the integrity of reservation life.

“It’s outrageous for us as Mohawk people to be told that we can’t sustain our community relations,” St. Regis Chief Lorraine White said.

When the St. Regis tribe’s development partner, Empire Resorts Inc., abandoned it after the change, the tribe dropped its suit and called on Congress to overturn the policy or have its application grandfathered in.

The other tribe suing, the St. Croix Chippewa Indians of Wisconsin, is pressing on with its suit, which alleges that the Interior Department violated the due process clause of the Constitution and acted arbitrarily.

Interior Secretary Dirk Kempthorne, on a recent stop in Las Vegas, noted that 10 of the rejected applicants sought casinos 160 miles to 1,550 miles away from their reservations. Several crossed state lines.

He said the 1988 Indian Gaming Regulatory Act was never intended to create casinos, and therefore jobs for tribal members, so far from the reservation.

“Once you begin going down that path, I don’t know how you ever control it,” Kempthorne said. “Because the precedent would be established and then you could have gaming anywhere.”

Three tribes have been approved in the past for long-distance casinos using a two-part determination that requires the approval of a state governor and the Interior secretary -- including the Forest County Potawatomis’ casino in Milwaukee, some 250 miles south of the reservation, in 1990.

Twenty other Indian casinos have been created away from reservations using other exceptions in the act.

Those exceptions exist for tribes without land, those that settle land claim disputes or those that lost land but had their federal recognition restored.

Tribes can also build any number of on-reservation casinos as long as a state agrees to a compact, which works like a tax on casino revenues.

“This last policy didn’t really change anything,” said Cheryl Schmit, co-director of Stand Up for California, a nonprofit tribal gambling watchdog. It opposed a Feb. 5 state ballot measure that allowed more slot machines at casinos owned by four Riverside and San Diego county tribes.

“The problem with off-reservation gaming -- and it’s still a problem no matter what Interior just did -- is with restored lands or ad hoc legislation,” she said.

Tribes that are restored to federal recognition can argue to base their new reservation and casino close to lucrative population centers, and have research backed by deep-pocketed development partners to help prove their ancestral homelands were located there, Schmit said.

“They rewrite the histories of these tribes to make it sound like they’ve been here forever and they haven’t,” she said.

Tribal casino revenues totaled $25.1 billion in 2006, compared with commercial casino revenue of $32.4 billion. In all, 230 of the 562 Indian tribes in the U.S. were running 387 casinos in 2006.

The latest deluge of applications was prompted by a bill backed by Sen. John McCain of Arizona, the presumptive Republican presidential nominee, that would have eliminated the two-part determination but allowed tribes that had applied by April 15, 2006, to be considered.

Twenty-five applicants rushed in. Only one was approved, eight are being considered and the rest were rejected. The bill ultimately died because of intense lobbying by Indian tribes.

Currently, 39 casino applications are pending, nine of them under the two-part determination rule.

The latest policy maneuver, for now, puts the Bush administration’s brakes on the industry.

Nelson Rose, a gambling-law professor at Whittier Law School, said the move effectively barred any new long-distance casino proposals from tribes.

“Ultimately as long as Bush is president, they’re not going to happen,” he said.

That puts some tribes, such as the Los Coyotes band of Cahuilla and Cupeno Indians in San Diego County, in a bind. The impoverished tribe has 300 members, 16 of whom live on the reservation some 70 miles from San Diego.

Tribal spokeswoman Francine Kupsch said there were scant economic opportunities on the mountainous reservation, which survives mainly on federal grant money.

The tribe had proposed to open a casino in Barstow, more than 150 miles away, with a Northern California tribe, Big Lagoon. It was rejected with the others despite gubernatorial approval.

“It sets our tribe, my people back,” Kupsch said. “We were the ones who 10 years ago received electricity for the first time and are still trying to catch up with everybody.”