KG Urban seeks an injunction

Casino developer seeks an injunction
Says tribe has unfair advantage
By Mark Arsenault

A developer with sights on a casino in New Bedford argued yesterday in US District Court that the state’s new casino law gives an unconstitutional advantage to the Mashpee Wampanoag Indian tribe in its pursuit of a gambling resort in Southeastern Massachusetts.

The developer, KG Urban Enterprises, filed its suit hours after Governor Deval Patrick signed the legislation into law in November, authorizing up to three resort-style casinos.

KG alleges that the casino act gives a federally recognized Indian tribe “explicit, race-based’’ advantages, by delaying competition. In the state’s two remaining regions, casino development rights are open to private competition.

“What KG needs is an opportunity to compete on an equal footing,’’ said lawyer Paul Clement in court, representing KG.

The state, in its defense, argued that the Massachusetts Gaming Commission is many months from accepting applications for any casino, and KG has not been harmed. The law “is not keeping KG Urban from being able to apply,’’ said Kenneth Salinger, assistant attorney general, representing the state. “Nobody can apply.’’

At issue in the case is language in the casino law that forestalls open bidding for a commercial casino in the southeast until at least July. The law lists benchmarks for a federally recognized Indian tribe - expected to be the Mashpees - to show progress toward winning the rights to a tribal casino under the Indian Gaming Regulatory Act. If there is likely to be a tribal casino in the southeast, the state Gaming Commission is expected not to seek bids for a commercial casino resort in that region.

But if the tribe cannot acquire land for the project and negotiate the operating terms of a tribal casino with Patrick by July 31, the Gaming Commission must open the southeast to bids for a commercial casino license, no later than Oct. 31.

In court documents, KG Urban says that “because of the Act’s racial set-aside provisions for Indian tribes,’’ the developer “likely will never have the opportunity to apply’’ for a commercial casino license. KG also said that casino companies have been scared off by the law’s deference to the tribe, and have declined to join KG in a partnership.

But in pursuing a tribal casino, the Mashpee Wampanoag face many obstacles. Most pressing is the fact that under federal law, tribal gaming can only occur on Indian lands.

Once the tribe buys real estate for a casino, it must apply to the US Department of Interior to have the land taken into trust on its behalf.

That historically long process recently became more difficult, if not impossible, due to a US Supreme Court ruling. The court, in 2009, stripped the federal government of much of its power to take land into trust.

Legislation to amend the law has stalled in the US Congress, and an ongoing court case that could clarify the process may be years from a resolution.

KG is seeking an injunction; Judge Nathaniel M. Gorton heard oral arguments yesterday and then took the matter under advisement.