Gun Lake Compact Signed By Governor

March 9, 2007
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LANSING — In a surprising turn of events, Gov. Jennifer Granholm has signed a compact with the Match-E-Be-Nash-She-Wish Band of Pottawatomi to allow Class III gaming at its Gun Lake Casino in Bradley near WaylandTownship

The tribe is anxiously awaiting a federal appeals court decision on whether the U.S. Department of the Interior will be allowed to take the former Ampro manufacturing facility into trust for renovation as a 147-acre casino.

On Feb. 23, a federal court dismissed a lawsuit brought by Michigan Gambling Opposition challenging the decision to place the land into trust. The suit primarily alleged that the government had not properly examined the environmental impacts of the casino. MichGo, an anti-gaming group founded by AlleganCounty residents, was granted a stay against that decision last week pending the appeal.

According to John Wernet, Granholm's legal counsel on Indian affairs, the governor has been negotiating with the tribe since early in her first term. Over the past year, negotiations picked up steam, even more so with the recent decision by U.S. District Court Judge John Garret Penn.

While opponents still have hope for the appeal, the governor was convinced that the tribe would eventually succeed, Wernet said.

"We felt it would be best to enter into the compact when the trust was imminent," he said. "The tribe will prevail, and once the land is taken into trust, the state has very little leverage."

The appeals court recently heard two similar cases and sided with the government on both. Last year, it dismissed a lawsuit against Dowagiac's Pokagon Band of Pottawatomi Indians and the forthcoming Four Winds Casino in New Buffalo, a nearly identical case involving a Southwest Michigan group called Taxpayers of Michigan Against Casinos, represented by the same Warner Norcross & Judd attorneys and many of the same environmental consultants.

Once the land is taken into trust, the state has only 180 days to negotiate a compact. If a compact were not settled in that time, the tribe has the option — although not a guaranteed right — to petition the Department of Interior to allow Class III gaming without a compact, as it recently did for a tribe in Wyoming. The casino could open immediately for Class II gaming, which would be limited primarily to card games, bingo and some electronic games, with no local or state regulation.

One of the principal concerns of the state was preventing situations like those that have occurred with the majority of the 11 previous tribal-state gaming compacts.

In 1993, Gov. John Engler negotiated a deal that legalized casinos for seven tribes in Michigan. At that time, the seven original tribes pledged to give 2 percent of slot machine profits to communities near their casinos and another 8 percent to the state, provided the state gave them exclusive rights to conduct gaming in the state.

All but one of the original seven tribes stopped those payments by 1999 as the state opened up gaming to additional four tribes, and later the three Detroit casinos. Those four tribes have since stopped paying as well, claiming the state lottery's new Club Keno game infringed on their deal. The state has sued to force the tribes to turn over the money. The case is pending.

The compact the governor agreed to sign last week is quite different from the earlier compacts. The tribe would share 8 percent to 12 percent of its slot machine revenues with the state, depending on gross revenue.

The tribe will have an exclusive regional zone that consists of nine counties from Allegan and Kalamazoo to Ingham, not the statewide exclusivity provided by the earlier compacts.

The tribe will also share 2 percent of its slot machine revenue with local governments. The revenue would be distributed by a local revenue sharing board consisting of three tribal representatives and three local governmental representatives.

The compact also mandates a detailed and rigorous regulatory structure. Stipulations include:

  • No patrons or employees under 21 years of age in gaming areas of the Gun Lake Casino.
  • Casino to comply with Michigan Employment Security Act and Worker's Disability Compensation Act. Tribe will comply with all applicable state laws regulating the sale and taxation of alcoholic beverages and tobacco products.
  • State regulatory oversight of Tribe's gaming records, and other relevant records related to enforcement of the compact.

The compact, which will be in place for 20 years, voids the Engler negotiated compact which the House and Senate approved in 2002. Since then, the Senate has voted to remove its approval.

The legislature will now have to approve the compact for it to take effect, pending the land being taken into trust.

"We're very happy that we've come to terms that we can agree on," said John Shagonaby, CEO of MBPI Inc., the tribe's economic development office. "We've had some ups and downs lately, but one thing is certain: We will win this thing."

The decision angered many West Michigan stakeholders, who have been adamantly opposed to the casino.

Representative Michael Sak, the Grand Rapids Democrat, was disappointed that the governor did not engage the legislature in regards to the compact negotiations.

"It is a controversial issue, and it is unfortunate that discussion did not occur," he said.

Granholm spokesman Liz Boyd said that the state followed the same process as the previous compacts in the state, and most of those in the country, which preserved the state's separation of powers by presenting the compact to the legislators only after it was negotiated.

"We are disappointed the Governor chose to ignore state sovereignty and negotiated prematurely with the Gun Lake Tribe," said John Helmholdt, spokesman for 23 is Enough.  "She negotiated with a tribe that does not yet have land in trust and who just had a legal setback with the judge granting a stay for the land going into trust.  Her negotiations have interfered with a matter still before the courts."    

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