The Odawa tribe is threatening to withhold its six percent payment to the state.
New Rogue Otsego County Casino Has Other Tribes on Warpath
Rival Refuses to Pay 6 Percent Fee to State in Protest Over Bay Mills Slots
November 27, 2010
By: Dave Rogers
A dispute among Indian tribes over an apparently illegal casino may soon cut into the revenues the state garners from gambling.
In a protest over the opening of a new casino by the Bay Mills Tribe of Chippewa the rival Odawa tribe is threatening to withhold its six percent payment to the state.
According to a report in the Gaylord Herald-Times, Bay Mills purchased a 45.6-acre parcel of land in August from Treetops Resort. The purchase included the old Treetops Resort information center, which Bay Mills used to open the slots only casino.
The new casino site is on Old 27 North, north of Vanderbilt and adjacent to the I-75 southbound Vanderbilt exit. It currently houses 36 slot machines but no other gaming equipment.
Within a week after the Nov. 3 opening, the magazine Business Week jumped on the story and the Port Huron Times-Herald quoted a consultant that the new facility is a test for a proposed casino in Port Huron.
The state attorney general's office and the governor's office have been dithering on the issue for nearly a month, announcing only that they intend to ask advice from the Federal Indian Gaming Commission.
Ken Harrington of the Odawa tribe is unhappy with the wait-and-see posture taken by the state: "I think the state here is liable and they're at fault for not having a policy and procedure in place for an unauthorized or illegal opening, such as we have today."
Harrington says state officials should have gone straight to Vanderbilt and shut that casino down. He says it's not fair competition based on the agreement his tribe has with the state to operate a casino in Petoskey. So, come the first of the year, he plans to withhold millions of dollars in revenue-sharing payments from the state because he says Michigan has failed to protect its agreement.
Harrington and other tribal spokesmen expect lawsuits to result from the incident.
Larry Rosenthal, of Ietan Consulting, a firm that specializes in American Indian gaming issues, said the Bay Mills Indian Community's new casino in Vanderbilt is a "test" project.
"It is a test, that's exactly what it is," he said. "I'm confident they are trying to test this legal theory in Vanderbilt and they'll try to go to Port Huron."
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Rosenthal said if the government allows the Vanderbilt casino to remain in operations, the tribe would likely move onto a larger project in Port Huron based on the same legal theory.
Rosenthal is consulting for some of the tribes that oppose the casino. He said Bay Mills started operating the casino in Vanderbilt on what he called a weak legal theory.
Rosenthal said the tribe is arguing the Vanderbilt casino property was purchased with funds from a land-claim settlement, making it tribal land eligible for gaming.
But Rosenthal, who helped draft the Michigan Indian Land Claims Settlement Act of 1997, said the legislation did not say anything about using purchased land for gaming.
"It doesn't authorize or contemplate to use the land for gaming purposes," he said of the legislation.
Rosenthal said he believes the state and federal governments will shut down the Vanderbilt casino.
Bay Mills apparently is trying to develop a new legal precedent that a tribe can open a casino anywhere it wants if it uses money gained from a federal land settlement.
Officials from Bay Mills have not returned requests for comment but a statement on the tribe's website states it has done nothing wrong.
"Five tribes in Michigan have questioned the legality of the operation since it opened and called for the state of Michigan to intervene," reads the statement. "Tribal Chairman Jeff Parker has indicated talks will be taking place with state officials in the future."
The new casino opened without fanfare in a somewhat nondescript building in Vanderbilt north of Gaylord along I-75.
The sound of money, signaled by clanging bells, immediately began in the small facility with just a few dozen slot machines.
The tinkling of coins also alerted other Indian nations in northern Michigan who contend it's illegal and outside the boundaries of the gaming contracts they hold with the state.
"I heard 9&10 News (tv station in Cadillac) was traveling over there to view the opening. So that's how we found out," says Ken Harrinton, chairman of the Little Traverse Bay Bands of Odawa Indians that owns the Odawa Casino Resort much larger casino about 30 miles away in Petoskey.
Harrington said Bay Mills officials told him only recently they were going to use the land for elk hunting.
"And then they surprised us, like seven-to-ten days later with the casino opening," Harrington says.
Harrington said normally there would be an application process with the state. The land would also have to be placed in trust with the federal government, which limits the number of places a tribe can have a casino.
Bay Mills Chairman Jeff Parker has not been answering calls from news organizations, but the tribe's newspaper has published statements contending that Bay Mills had every right to open the casino as it did.
The Bay Mills News also touts the Indian nation as a pioneer in the gaming industry, leading the way for tribes across the U.S. to have gaming back in 1984. The speculation today is that Bay Mills now wants to make it easy for a tribe to open a casino pretty much anywhere it wants.
Several other tribes are none-too-happy. Five tribes, including the Grand Traverse Band and the Saginaw-Chippewa Indian Tribe, have hired James Nye to represent them on this issue.
Nye says, if Bay Mills can open a casino this way in Vanderbilt, communities all over should be concerned.
"Under that theory, they could purchase land downtown Detroit, downtown Port Huron," he says. "They could even go to New York City or Miami Beach, Florida and there would be no different scenario to the legal theory that they pull forth in Vanderbilt.
"So it should be very troubling, not only to the tribes that have expressed opposition to this, but also too many communities around the state of Michigan."
Of course, if Bay Mills can open a casino wherever it wants, so could Nye's clients. But he says these tribes don't want that. He says that could end up causing a public opposition to Indian gaming.
The state is also concerned.
"The new casino was an immediate concern, as soon as it opened," says Joy Yearout, a spokeswoman for the state Attorney General. "And we're definitely following additional concerns that are being raised by the other tribes. This is an issue that could have an impact statewide."
Yearout said the A.G.'s office met last week with representatives of the Bay Mills tribe. Yearout declined to call the move illegal but says this is not the way tribes have opened casinos in the past.
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