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Mich. governor signs compact with Gun Lake Tribe

14 March 2007

Last Friday, Governor Granholm and D.K. Sprague, the Tribal Chairman of the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indian Tribe, known as the Gun Lake Tribe, announced that they had signed a historic Class III gaming compact to authorize casino gaming at the tribe's proposed site in Wayland Township, just south of Grand Rapids.

Governor Granholm sent copies of the signed compact to both House Speaker Andy Dillon, and Senate Majority Leader Mike Bishop urging the legislature to concur with the decision to enter into the compact by adopting a resolution. The governor cited several reasons that she believes demonstrates that approval of the compact is in the best interest of the public.

"The Gun Lake Tribe has won a decisive victory in the federal courts, and it appears that placement of the tribe's Michigan land into federal trust is imminent," Granholm said. "Once the tribe's land goes into trust, the tribe will almost certainly have the right under federal law to open a commercial gaming facility - with or without a compact with the state. Given these circumstances, it is in the best interest of the state to enter into a gaming compact with the tribe to ensure that the state has both some say in the operation of the facility and an opportunity to share in its revenues."

In December 2002, each house of the Michigan Legislature passed a resolution endorsing a proposed gaming compact with the Gun Lake Tribe; that proposed 2002 compact was substantially similar to the compacts previously entered into with four other tribes in 1998. Before leaving office, former Governor John Engler declined to sign the compact but strongly recommended that a compact be approved by Governor Granholm. Granholm has held off on entering into a compact because the tribe had not yet placed land in trust for the proposed facility. Under existing case law, the state is not under any obligation to enter into tribal compact negotiations until land is in trust.

In her letter to the two legislative leaders, Granholm noted that she believed it was more "prudent to wait until the Gun Lake Tribe was much closer to having its lands in trust."

The governor went on to say that the time has now arrived.

"Gun Lake has won a decisive victory in the federal courts and trust status for its land now appears to be imminent - more a matter of weeks or months rather than years away," she noted.

Tribal Chairman D.K. Sprague said the following:

"I applaud Governor Granholm for signing the compact, and respectfully request that the Michigan Legislature take the final step to put us on equal footing with all other federally recognized tribes in Michigan."

The compact is considerably different from the 2002 compact, and also different from the 1994 and 1998 compacts with eleven other tribes. The Gun Lake Tribe will share between eight and 12 percent of slot machine revenues with the state on a sliding scale based on the amount of revenue generated, in exchange for some limited exclusivity of its gaming operation in nine counties. The compact also provides for a two percent revenue share with local governments.

Significantly, the compact is for a twenty-year period. There had been some speculation that new compacts the governor entered into would be for a shorter period of time.

The tribe agreed to a high level of regulatory compliance, including a requirement that its Class III gaming equipment will meet the technical equipment standards of the state of Michigan or the NIGC, whichever is more restrictive. This could result in the Michigan gaming lab being quite a bit busier.

Pursuant to a decision issued by the Michigan Supreme Court in 2004, the Legislature currently can approve a compact by the adoption of a resolution, which requires a simple majority of the members of the legislative body that are present when the matter is considered.

David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com
David Waddell
David Waddell is an attorney for Regulatory Management Counselors, P.C. (RMC), which assists businesses in navigating the legislative, regulatory and licensing systems governing Michigan’s commercial and tribal casino industries. He is the co-author of The State of Michigan Gaming Law Legal Resource Book and one of the founders of The Michigan Gaming Newsletter.

David Waddell Websites:

www.michigangaming.com