House Moves To Approve Compact

July 22, 2007
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LANSING — The Michigan legislature took its first step toward approving a compact signed in March by Gov. Jennifer Granholm with the Match-E-Be-Nash-She-Wish Band of Pottawatomi to allow Class III gaming at its Gun Lake Casino in Bradley near Wayland Township.

Rep. Barbara Farrah, D-Southgate, introduced a resolution in the House yesterday in support of the compact, the necessary first step toward the House approving the compact Granholm sent to the legislature in March. There were 57 co-sponsors signing the initial resolution, which, provided all stay the course, ensures the bill will pass with a majority of the 110-member House.

“I believe there were more people on the floor that would have signed it,” Farrah told the Business Journal yesterday afternoon. “But with the summer schedule I only had so much time to drop it. I think people realize that we need to be responsible as a legislature and move this forward.”

The resolution will now be referred to the House Regulatory Reform Committee, where it should pass with little debate — eight of the nine committee members signed the resolution as co-sponsors.

No West Michigan delegate signed the resolution, nor did Speaker of the House Andy Dillon, D-Redford Township, or Minority Leader Craig DeRoche, R-Novi. On Wednesday, prior to Farrah’s late-session lobbying, Dillon spokesperson Katie Wilkins told the Business Journal that there were no plans to bring a compact resolution to the floor.

“We’re not ready to cash in our chips yet,” said Speaker Pro Tempore Michael Sak, D-Grand Rapids, the highest ranking West Michigan delegate in the house. “It’s very easy for someone to sign on when they think it’s a done deal. (Farrah) is being proactive, and I applaud her for that, but I think it may be premature.”

For the better part of a decade, the tribe has been working with the U.S. Department of the Interior to take the former Ampro manufacturing facility into trust for renovation as a 147-acre tribal casino. A string of judicial and regulatory challenges mounted by a consortium of West Michigan stakeholders have kept the development on hold.

The clearinghouse for opposition efforts, Grand Rapids Political Action Committee 23 is Enough, was not available for comment at press time. A call was placed to Strategic Communications Group, which operates the PAC, after normal business hours on Thursday and again this morning. Following the departure of its vice chairman, former Ambassador Peter Secchia, the group has appeared to be on shaky ground. It has not filed any financial disclosures with the state since January and its Web site,, was not operational at press time.

In February, a federal court dismissed a lawsuit from Michigan Gambling Opposition challenging the decision to place the land into trust with allegations that the government had not properly examined the environmental impacts of the casino. MichGo, an anti-gaming group founded by Allegan County residents, was granted a stay against that decision last week pending the appeal.

While opponents still have hope for the appeal, the governor was convinced that the tribe would eventually succeed. The appeals court in the past year has heard two similar cases and sided with the government on both, clearing the way for casinos in New Buffalo and Dowagiac. A third case concerning separate issues but represented by the same Warner Norcross & Judd attorneys was thrown out of the Michigan Supreme Court in May.

Once the land is taken into trust, the state has only 180 days to negotiate a compact. If a compact is 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.

The Governor originally negotiated the compact, Sak contends, under the belief that the casino could move forward with Class III gaming without state approval and that, at the least, a Class II casino was imminent. Regardless of its current momentum, the court case has yet to be resolved.

“But with that said, if this is moving forward, we need to make sure they’re paying their fair share of taxes,” Sak said. “I am not satisfied with the current compact.”

The Gun Lake Casino compact is in many ways superior to the compacts negotiated by Gov. John Engler in 1993 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 an 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 Gun Lake Casino compact shares a larger percentage — 8 percent to 12 percent of its slot machine revenues to the state, depending on gross revenue, and 2 percent to local governments — and limits its exclusivity zone to nine counties from Allegan and Kalamazoo to Ingham.

Sak believes the exclusivity clause should be removed in its entirety, and has urged House Speaker Dillon to pursue new compacts for the existing casinos before approving the Gun Lake Casino compact. He also pointed to a handful of states that had negotiated much larger revenue-sharing agreements than the Gun Lake Casino compact.

The compact must also be approved by the State Senate. On Wednesday, Matt Marsden, press secretary for Senate Majority Leader Mike Bishop, R-Rochester Hills, indicated that discussions of a resolution were underway, but a decision had yet to be made on “where and how best to proceed.”

Earlier in the summer, Sen. Bill Hardiman, R-Kentwood, told the Business Journal he had similar concerns about the compact.

“We need to ensure that we’re able to at least get some revenue from the casinos,” he said. “That exclusivity clause — even if it’s just for the region — is a weakness.”

In a prepared statement, Tribe Vice Chairman John Shagonaby said that the tribe should get the same considerations as the other ventures before it. “After six years of playing by the rules, the tribe is still asking for the same thing: fairness.”    

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