'Shopping' around
Sidebar: Landlocked
'Shopping' around
There's a lot of smoke surrounding the 'reservation shopping' issue. But where's the fire?
By Matt Connor
From New York to California, over-hyped media reports often tout the potential for huge Indian casinos in urban areas not normally considered "Indian lands." But while the Indian Gaming Regulatory Act (IGRA) allows for the construction of Indian gaming enterprises on off-reservation property, the process of taking land into trust for the purposes of gaming is a long and often arduous one.
That doesn't deter many tribes-often with well-financed backers-from floating proposals about building casinos near high-population tourist areas or just off major interstate highways, even if those potential casino sites are hundreds of miles from their traditional homelands.
Take the Timbisha Shoshone of Death Valley, Calif., for example. That tribe a proposed a 100,000-square-foot casino and 300-room hotel near Interstate 15, about 100 miles from their reservation. Or there's the Los Coyotes Band of Cahuilla and Cupeno Indians. Along with the owners of the Detroit-based Little Caesar's Pizza chain, that tribe hopes to build a casino near Barstow. That proposal hit a snag, however, when the Lake Havasu tribe, claiming ancestral rights to the land, announced its own plan to build a casino there. All of these off-reservation ventures-and there are many, many others-face serious obstacles. Still, the proposals, often informally referred to as "reservation shopping," continue unabated.
"These are just pie in the sky proposals that get everyone excited because they see the success of deals like the Lytton Band's deal in San Pablo, but it's all hype," said Howard Dickstein, a Sacramento attorney who represents several gaming tribes in the state. "Separating the wheat from the chaff on this issue is very difficult. I just shake my head at the whole thing. There's a great deal of hype and a great deal of hysteria in Northern California about this issue that I don't think is justified by the law. Everyone thinks there's going to be a casino in their backyard, and there are so many proposals that you can't blame them."
A rare success story
One of the most successful "reservation shopping" deals to emerge in California in recent years was referenced by Dickstein: The Lytton Band of Pomo Indians has a deal to develop a 2,500-slot casino complex in a former card room in the city of San Pablo, California. (For the latest news on this project, see sidebar.)
That proposal was finalized through an Act of Congress (despite objections from some members, including California's Diane Feinstein) and gave the tribe something many Native American groups nationwide long for: an urban casino.
"The card club is owned by the tribe now," said Doug Elmets, a spokesman for the Lytton Band. "The tribe's ancestral land is in Sonoma County, and their land was taken away from them in the 1950s. When the federal government tried to assimilate tribes back into society, the tribe was left landless."
Eventually the Lytton Band filed a lawsuit to try to regain a portion of their traditional land, and now have a presence in the town of Santa Rosa. But they're prohibited from developing a gaming operation at that site, so they began "shopping" around for a potential casino location outside Sonoma County.
Elmets said the tribe developed a relationship with some wealthy investors, led by Sam Katz, former head of Philadelphia-based Public Financial Management Inc., one of the nation's leading financial advisory firms for municipal bonds. Katz and his associates bought Casino San Pablo from the previous owners, while continuing to maintain a relationship with the tribe. Katz and company planned to help manage the San Pablo property with the Lytton Band, but instead were eventually bought out by another management group partly owned by two other California gaming tribes.
"One of the members of that new management group is the Rumsey Indian Tribe, who owns Cache Creek Indian Casino," Elmets said. "Another is the Pala Indian tribe, which owns the Pala Casino. So it works out that this is really tribes helping tribes."
Dickstein said that of all the off-reservation casino deals he's heard floated over the last couple of years, Lytton is one that has a strong chance of succeeding. But even the Lytton Band has a couple of remaining hurdles to overcome.
"One that is already working is Lytton," Dickstein said. "They have trust land and they've entered into a compact and the question is whether the California legislature will ratify their compact. That's an important issue. But without an Act of Congress none of these deals in California will fly. They never have. They never will, unless the law is changed."
An act of Congress, which essentially authorizes a tribe to take land into trust for the purposes of gaming, is one way for tribes to bypass states that are unwilling to work with them on land trust issues. It also allows a tribe to get past the often-complicated procedure by which a tribe can take land into trust through the federal Bureau of Indian Affairs (BIA). The BIA land-trust process can involve hundreds of hours of research and months of seeking approvals.
"It's a fairly complex process," said George Skibine, director of the Indian Gaming Office of the BIA. Skibine said a tribe first has to file an application at the BIA regional office where the land for the proposed gaming operation is located. Then the regional office verifies that the regulatory and legal requirements are completed, and sends their recommendations to Skibine's office.
"We put together a final recommendation package for the Deputy Assistant Secretary, who essentially has the authority to say yea or nay on the application," he said. "Usually the application takes one year or more to make it through from inception to the end."
Emphasized Dickstein, "Going the standard route through BIA is a very tall order, particularly when that has never happened in California. The governor has made clear again and again and again that he would never approve gaming at a new location in an urban area unless he was obligated to do it under an Act of Congress. And also because the local jurisdictions in the Bay Area are all negative about it, as are all the other established tribes."
Sharing the wealth
Part of the deal the Lytton Band made to secure the option to develop a casino in San Pablo involved the sharing of revenue from their planned casino with state and local governments. Elmets said the Lytton revenue-sharing deal is very positive for the tribe, the state and the surrounding area.
"The tribe is focused on trying to not only provide for their tribal members and create some economic self-sufficiency, but this project is going to create thousands of good living-wage union jobs in an area that desperately needs them," Elmets said. "This is urban redevelopment area. It has the enthusiastic support of the community. Ultimately this is a great project and the tribe is focused on that."
Sources close to the Lytton tribe said the only way their proposal for a casino at San Pablo could go forward was to sign off on a substantial revenue-sharing agreement. A large portion of the Lytton Band live at or below the poverty line, and given that dire economic situation, the tribe felt it was imperative to secure casino rights and generate much-needed hard dollars for tribal members. A contribution of 25 percent of casino revenue to the state was, for them, a fair price to pay under the circumstances.
In return for payments estimated to be $150 million annually, the tribe was granted a 35-mile exclusionary zone, meaning no other entity can operate slot machines within that 35-mile radius.
Tribe vs. Tribe
These kinds of deals are troubling to other tribal leaders, including Keller George, a member of the Oneida Nation of New York and one of the tribe's gaming commissioners. He's also president of United South and Eastern Tribes (USET) Gaming Association.
George said that, in his own state, tribes working to achieve off-reservation gaming deals have agreed to what he considers onerous revenue-sharing deals. Recently, New York Gov. George Pataki has approved a plan to allow the Seneca-Cayuga Tribe of Oklahoma to take land in the Catskill region into trust for the purposes of gaming in return for settling a long-standing land claim dispute. The plan also contains a large revenue-sharing component.
"The Seneca-Cayuga are agreeing to outrageous amounts of money to give to the state and local communities. They don't care about the sovereignty issue. They just want to get a casino up and running and they'll take that money back to Oklahoma," George averred.
In a statement, Seneca-Cayuga Chief LeRoy Howard said "The Seneca-Cayuga Tribe is pleased with our new partnership with the State of New York and that a quarter-century of litigation has been resolved in a fashion that will benefit future generations of the tribe... We thank Governor Pataki for his commitment to this settlement and look forward to a long-standing partnership with the State of New York."
Pataki has also cleared the way for the Cayuga tribe of New York to develop a Catskills gaming property. Already three tribes-the St. Regis Mohawk, Seneca and Oneida-operate successful casinos in other parts of the state.
"We don't object to Seneca, Cayuga or Mohawk doing a casino," George said. "But why the governor is reaching out to tribes in other states-[(Wisconsin's) Stockbridge Munsee and Oneida Wisconsin want casinos in the Catskills, as well as Seneca-Cayuga] is the question. It ought to be tribes that reside in the state, Cayuga, Seneca and Mohawk, that have the right to do this."
Obviously the Empire State is home to the most densely-populated city in the nation, so it's not surprising that tribes from Oklahoma or Wisconsin would be interested in attempting to develop casinos there. But George thinks those tribes shouldn't be allowed to take land into trust so far from their current reservations.
"To me, it's not about keeping a tribe from out of state from opening a casino," George said. "It's the sovereignty issue I'm concerned about. If your government is in Oklahoma, and you open a casino in New York, then the floodgates will open. We'll have the same thing happening in other states like Mississippi, North Carolina, Georgia, Tennessee. Does it mean the Cherokee of Oklahoma can come back to Georgia? Does it mean the Seminoles of Oklahoma can come back to Florida? The Creeks back to Alabama and Mississippi? It just opens up such a big issue there. Once it starts, it's not going to stop. It's like opening Pandora's Box."
In response to what the Oneida perceive as a very real threat from out of state tribes, they have launched a television ad campaign against Pataki's Seneca-Cayuga proposal.
"New Yorkers have a history of working together. And, the Oneida Indian Nation is a New York success story, creating over 4,000 jobs and $100 million in annual payroll that goes right back to our communities," one 30-second spot states. "Now Governor Pataki wants to let Oklahoma tribes open casinos here and take profits back to Oklahoma, hurting New Yorkers. Call the governor. Tell him, now, more than ever, we need to do what's best for New York-not Oklahoma."
Empire Resorts, a company that plans to manage both the proposed Seneca-Cayuga of Oklahoma property and the facility to be developed by New York's Cayuga, is reportedly preparing its own series of television ads in response.
Ongoing controversy
All of this serves to highlight the intense controversy surrounding the issue of off-reservation gaming. BIA Director of Indian Gaming Skibine said that, so far, no tribe has been able to take land into trust for the purposes of gaming outside of their home state, but that, at least in New York, it's "definitely an issue."
"I think it's going to be controversial because the tribes who are currently in New York are very much opposed to tribes from other states coming in and setting up camp there. That's going to be very controversial."
So far in 2004, according to BIA documents, four tribes have been approved by the BIA to take land into trust for gaming or gaming-related purposes. Those are California's Agua Caliente Band, Washington's Suquamish, California's Picayune Rancheria of Chukchansi and New York's Seneca. Each of these tribes took land into trust that was bordering their reservation or, in the case of the Seneca, were acquisitions approved for gaming with the governor's concurrence.
"The ones that were all approved did not necessarily go into trust," Skibine said. "Once they are approved, we publish a notice in the federal register for thirty days, and anybody can sue at that time. Some of those were not for gaming, but were gaming-related. Gaming-related, for example, might be a parking lot. Its principal use is for the gaming establishment, but it's not a gaming acquisition per se."
As of August 2004, the BIA reported, ten Indian tribes sought gaming rights on land off their reservations or on land distant from their traditional homeland. These include the Bad River Band of Lake Superior Chippewa, who are
seeking trust land in Wisconsin, 332 miles from their reservation and the Menominee Tribe of Wisconsin, who are also seeking Wisconsin trust territory, 190 miles from their reservation.
Since 1988, nearly a dozen applications to take land into trust for the purposes of gaming have been denied by the BIA or withdrawn by the tribe.
"Sometimes, we find, when an application is pending, we have issues with it," Skibine said. "And before we can approve or deny it, it collapses under its own weight."
The sad result of a problematic off-reservation casino plan that capsizes is often a demoralized, economically disadvantaged tribe and a once-high-flying potential casino operator that ends up with its coffers greatly diminished.
"There are a lot of investors who are pumping money into these tribes, because they see a rainbow, but I just think it's foolhardy," Dickstein said.
Land locked
Casino San Pablo deal in hands of Calif. lawmakers
As the California State Legislature prepared to meet in mid-December, one of the primary issues they faced is the plan by the Lytton Band of Pomo Indians to develop a 2,500-slot casino in urban San Pablo, according to California's Tri-Valley Herald newspaper.
Just days before the prior legislative session ended last summer, Gov. Arnold Schwarzenegger presented the compact he signed with the Lytton Band to lawmakers. At that time, the compact was criticized by members of both parties because they would have little time to deliberate over the issue of the state's first truly urban Indian casino.
Assemblywoman Loni Hancock, D-Berkeley, whose district includes the casino, told the newspaper that she remains opposed to the project. She's prepared to introduce a bill this week which would amend the state constitution so that a 45-day "cooling-off" period would be required between gubernatorial signing and legislative ratification of Indian gaming compacts, allowing time for public input.
Legislators said they remain concerned about such issues as traffic congestion, social impacts and the effect on the environment should the San Pablo casino deal move forward.
Lytton Band spokesman Doug Elmets told the Herald that the tribe will be meeting with local businesses and neighborhood organizations and will incorporate their input into its business plan.
Schwarzenegger spokesman Vince Sollitto said that while lawmakers and others might be opposed to having an Indian-owned, Nevada-style casino in San Pablo, "none of those are viable objections." He emphasized that the San Pablo property is now considered Indian land under an Act of Congress passed in 2000.
"Under federal law, that tribe has a right to seek a casino at that site, and it's the governor's job to negotiate the best possible agreement to protect the surrounding community and all Californians," Sollitto said.
Schwarzenegger has opposed a federal bill to roll back part of the Act of Congress that put the land in the Lytton Band's hands. If that Act of Congress was suspended, the tribe would be required to undergo a lengthy bureaucratic process-through the Bureau of Indian Affairs-of having the land taken into trust for the purposes of gaming.
-Matt Connor
