Lansing casino is 'not a realistic expectation,' experts say

Legal experts say bringing a tribal casino to Lansing faces huge hurdles

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Building a tribal casino in Lansing might be harder thanyou think — in fact, its almost impossible to bring a tribal casino tothe city, legal experts say.

“I don’t see any possibility of a tribal casino beingallowed to be constructed in the city of Lansing,” said Robert StockerII, chairman of the gaming practice group at Dickinson Wright law firmin Lansing. The group deals with both Indian and commercial gamingissues and MGM Grand is listed on the firm’s client list on its website.

Stocker’s remarks should be taken in the context of thehighly competitive nature of the $10 billion-a-year casino industry inMichigan, since his firm’s website says it represents Detroit’s MGMGrand Casino. Still his remarks are consistent with those of otherexperts who don’t have clear ties to other casinos.

Two weeks ago, Ted O’Dell of the Lansing Jobs Coalition,which led a petition drive seeking a referendum on whether voters wanta casino, told City Pulse that the Sault Ste. Marie Chippewa Tribe wasin negotiations with city officials to build a tribal casino in thecity. The proposal would create 1,500 new jobs and 300 constructionjobs, O’Dell said. The Lansing Jobs Coalition has been researchingbuilding a casino since January as a way to bring jobs to Lansing.

The Bernero administration has neither confirmed nordenied that such negotiations are under way, but Mayor Virg Berneroissued a statement strongly endorsing the idea of a casino in Lansingbecause of the “tremendous” economic benefit.

Marquette  isthe site of one of only five off-reservation casinos in the country,according to federal records. The casino is owned by the Keweenaw BayIndian Community and located 88 miles away from its reservation inBaraga. The land that the casino is built on was owned by the tribebefore the federal law being signed in 1988, but was held in trust bythe state and not released until September 1990. The tribe opened thecasino in 1994 after signing a compact with the state that governs howthe casino should be run. The U.S. Interior Department, which handlestribal matters including gaming, sued the tribe, saying that a statecompact was not enough to keep the facility open. However, the judgeruled that having a valid state compact was sufficient in thisinstance. The remaining off-reservation casinos are located inMilwaukee, Airway Heights, Wash., Needles, Cal., and Big Horn County,Mont., according to federal records.

Calls to the Keweenaw Bay Indian Community were not returned.

While federal records count five off-reservation casinos,this count only applies to casinos opened under the “two-partdetermination” exemption of the federal Indian Gaming Regulatory Act,which governs Indian gaming, said Attorney R. Lance Boldrey, whospecializes in Indian law at Dykema Gossett PLLC’s Lansing branch. Theexemption allows an off-reservation casino only if the U.S.  interiorsecretary determines that opening a casino would be in the bestinterest of the tribe and not detrimental to the surrounding community.This approval must be accompanied by approval from the surroundingtribes, state and local officials and the state governor, according tothe federal law. The five-casino count does not apply to Indian casinosopened under any other exemption of federal law, so higher numbers thatinclude all casinos opened under a federal exemption are sometimesreported. This number would be in the double digits, Boldrey said, buthe didn’t know the exact amount. One 2009 article from the Wall StreetJournal stated that there were 22 off-reservation casinos and another20 off-reservation casinos in the works by tribes across the country.

O’Dell also told City Pulse that the city had retainedDickinson Wright to look into the legal nuances for bringing a casinoto the city, but Stocker denied those claims.

“We haven’t been hired by anybody to give any advice about looking into a casino for Lansing,” he said.

O’Dell could not be reached for comment.

James Nye, spokesman for two other Michigan tribes, theSaginaw-Chippewa Indian Tribe, which owns Soaring Eagle Casino, and theNottawaseppi Huron Band of Potawatomi, which owns Firekeepers in BattleCreek, said the tribes he represents are against Sault Ste. Marieopening a casino in Lansing because they feel it violates both thefederal  regulatory act andthe state compacts signed between the tribes and the state, whichimpose additional state requirements such as giving a portion of thecasino proceeds to local governments.

“There is nothing novel about trying to put a casino hundreds of miles from the tribe’s reservation,” Nye said.

Under section 20 of the federal regulatory act, a tribeneeds to put land into trust before it can build a casino, Stockersaid. This can only be done in very specific cases.

The act generally prohibits gaming onland acquired by a tribe after Oct. 17, 1988, when the law was signed,unless it meets one of two criteria. The act  statesthe land in question either needs to be touching the boundary of thetribe’s reservation land on Oct. 17, 1988, or the tribe had noreservation when the act was signed into law so newly acquired land canbe used for gaming. The Sault Ste. Marie tribe’s reservation is basedin the Upper Peninsula, so Lansing is not close to its border, and thetribe had a reservation before the act took effect,  so the second criterion doesn’t apply.

The rules are so strict that Boldrey called the casinoproposals that came in when he worked for former Gov. John Engler ongaming issues “casinos of the month” because ideas would constantly beproposed but nothing would be built.

“I’ve been pretty amused by people saying that getting acasino in Lansing can be a simple and short process,” Boldrey said inan e-mail Monday. “Even without any opposition, a tribe would eitherneed special federal legislation or go through an administrativeprocess that can’t be completed in probably less than five years.”

While the federal  actdoes have exceptions, they do not apply to Lansing’s proposal, Stockersaid. “From a practical standpoint, from all the rulings that have beenmade … it’s just not a possibility (to build a casino in Lansing).”

In addition to the “two-part determination” exemption,land can also be taken into trust to build a casino if it was acquiredthrough the settlement of a land claim, the land is part of an initialreservation that is acknowledged under federal law or the land isrestored to a tribe and federally recognized.

Nye said the tribe could be considering a legal argumentrelated to the land claim exception as a way to attempt to open acasino in Lansing. The argument would be similar to what the Bay MillsIndian Community used when it attempted to open a casino in Vanderbiltin March.

In 1997, Congress passed the Michigan Land Claims Act,which awarded funds to Michigan tribes in reparation for lands beingtaken away, Nye said. The Bay Mills Indian Community used a portion ofits settlement from the Land Claims Act to purchase 45 acres inVanderbilt and built a casino off its reservation. The tribe claimedthat since it bought the land with money awarded from a land claim, thecasino had tribal distinction and qualified for an exception under thefederal act.

Instead, five of Michigan’s 12 tribes openly spoke outagainst the casino, saying it was illegal under Indian law, Nye said.One tribe, the Little Traverse Bay Band of Odawa Indians, sued the BayMills Indian Community, asking for the casino to be shut down. In theend, the secretary of the Interior determined the casino was illegalbecause it went against the spirit of the regulatory act. The case’sfederal judge agreed and the facility was shut down by a federal courtorder.

“If (the Sault Ste. Marie leaders) intend to use the sameapproach that Bay Mills used in Vanderbilt, we feel it will be dead onarrival,” Nye said. “The residents of Lansing, the leadership of thecity of Lansing and businesses in Lansing should understand that thereis a zero possibility of opening an Indian casino in Lansing underthese procedures.”

However, the tribe could have an additional — albeit along shot — option available to open a casino, said Eric Bush,administrative manager for the Michigan Gaming Control Board.

The Ste. Sault Marie tribe — the one that supposedlywants to bring a casino to Lansing — owned and operated the GreektownCasino in Detroit.  (Thecasino went bankrupt, but the tribe still owns the land on which a newcasino is operating). The tribe waived its sovereign immunity beforebuilding Greektown, essentially becoming a commercial investment group.This allowed the tribe to buy land, build a casino and open the doorsas a commercial facility rather than a tribal one.

“Taking land into trust did not come into play,” Bush said.

However, Bush said, opening a new commercial casino wouldrequire amending the Michigan Gaming and Regulatory Act, which saysthat there will only be three commercial casinos in the state ofMichigan and they will all be in the Detroit area. . “It would bedifficult to amend, not impossible,” he added.

Since the Michigan law began as a ballot initiative, athree-fourths majority vote is needed from the state legislature. Thegovernor’s approval is also needed before the law can be changed,Stocker said. The proposal would then require both a statewide vote anda local vote to approve the casino. The Detroit casinos as well as thenearby tribal casinos would most likely oppose this action as itincreases their competition, he added.

“Those are very very difficult things to achieve,” Stocker said.

While a casino could potentially bring an influx of jobsto a hard-hit region of the state, Stocker, Nye and Boldrey are notconvinced that a legal argument can be made that allows a casino toopen.

“I think as a practical matter we are not going to see acasino, either tribal or commercial, in the city of Lansing,” Stockersaid. “The hurdles are too great. It’s not a realistic expectation.”


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