July 19th, 2012

Governor’s Mashpee casino deal cuts out Gay Head tribe

By MV Times, on July 19th, 2012

The odds that the Wampanoag Tribe of Gay Head (Aquinnah) will cross the casino finish line ahead of the Mashpee Wampanoag got a little longer this week. The surest bet is that the courts may ultimately determine whether the Mashpee Wampanoags get to build a casino in Taunton, and whether the Aquinnah tribe can turn their community center into a “boutique” casino or pursue their dream of a mainland gaming complex.

Wampanoag Community Center

Gov. Deval Patrick dealt the latest hand in the long-running story of Massachusetts casino gaming last week. The Patrick administration and the Mashpee Wampanoag tribe reached agreement on the terms of a compact, a requirement for the tribe to pursue the southeastern region license, temporarily reserved for a federally recognized tribe.

Under the new expanded gaming law, the legislature must ratify a compact between the administration and an eligible tribe before July 31, or the state gaming commission would be required to seek commercial bids for casinos in Southeastern Massachusetts.

At 5 pm, Wednesday, July 18, the Massachusetts House of Representatives voted 120-32 to approve the casino compact legislation. The resolve now moves to the Senate, which has a formal session planned Thursday afternoon.

House Speaker Pro Tem Patricia Haddad said Taunton residents, who she represents, want a casino and the jobs that will come with it. “The Mashpees have been around forever,” she said.

Rep. Robert Koczera of New Bedford opposed the compact, saying it “fails to address the most contentious issue facing the tribe” — getting tribal land placed in trust by the federal government, according to the State House News Service.

The compact would deliver 21.5 percent of gross gaming revenue from a proposed casino in Taunton to the state.

The percentage of revenue the tribe agreed to share is 3.5 percent less than what a successful commercial casino applicant will pay, under the state’s new expanded gaming law that allows for the licensing of up to three regional casinos in the state, and one facility featuring slot machines.

Federal law requires states that allow gaming to negotiate gaming agreements with federally recognized tribes, and it gives broad rights to those tribes to construct gambling facilities on lands held “in trust” for them by the federal Bureau of Indian Affairs (BIA).

The Mashpee tribe has plans to construct a $500-million resort casino in the Liberty and Union Industrial Park at the intersection of Routes 24 and 140 in Taunton.

The 15-year agreement would automatically renew, according to the Patrick administration, unless the state or the tribe provides notice for modification or non-renewal. The compact has an exclusivity clause that would reduce the tribe’s revenue sharing percentage to 15 percent if another casino were to open in the southeast region of the state.

For example, should the Gay Head tribe secure a foothold on the mainland, it too could apply to take land into trust and pursue a casino.

But there is a hitch. Unlike the Aquinnah Wampanoag tribe, which owns land held in trust on the Vineyard, the Mashpee tribe must apply to take the Taunton industrial park land into the federal trust.

The administration has agreed to fully back the tribe’s application with the Bureau of Indian Affairs to have land in Mashpee and Taunton taken into trust. Without a compact, supporters of the deal said, the state is susceptible to the tribe obtaining land and opening a fourth casino with no obligation to share revenues.

Several lawmakers from the southeast region have expressed concern about the lack of an opt-out clause in the compact, to allow the state to seek a commercial bidder in the region if land negotiations with the federal government drag on.

And they would appear to have reason to worry. The right of the government to take land into trust for tribes recognized after Congress enacted the Indian Reorganization Act in 1934 is the subject of two pending lawsuits filed in federal court. The Mashpee Wampanoag tribe was federally recognized in 2007.

Legislative leaders this week rejected efforts to amend the compact to set a deadline of Oct. 1, 2014 for the tribe to secure land in trust for a casino, after which time the gaming commission would be required to seek commercial bids for a casino development in the region.

Congratulations

Outmaneuvered at every turn by their mainland cousins, the Aquinnah tribe was spare in its praise and had some advice.

“Although the Aquinnah tribe congratulates its Mashpee cousins for reaching this threshold, it is unfortunate that the compact appears to wring unjust and burdensome concessions from the Mashpee that are highly unlikely to pass muster under the federal Indian Gaming Regulatory Act (IGRA),” Wampanoag chairman Cheryl Andrews-Maltais said in a statement emailed to The Times by the Slowey/McManus Communication firm that represents the tribe.

“Governor Patrick has clearly approached the expansion of gaming based on what he thinks he can get away with and not what the law compels him to do,” Ms. Andrews-Maltais said in the statement.

“The governor has now placed the Mashpee between a rock and a hard place as they now have to convince the Department of the Interior to approve a compact that contravenes federal law.”

The Gay Headers said that federal law prevents the state from using the compact negotiation process to extract taxes on tribal gaming revenues.

“The express purpose of IGRA is to promote tribal self-sufficiency and strong tribal governments,” the statement continued. “Tribal gaming is intended to enable tribal governments to fund the programs they need to serve their membership and steward their lands. Hundreds of examples around the country demonstrate that strong tribal governments become great neighbors, employ thousands of non-Indians, contract with local vendors and generate millions in employment and sales tax revenue, all without directly taxing tribal gaming revenue.

“Perhaps it is just as well that Governor Patrick refuses to negotiate with Aquinnah because Aquinnah would not, indeed it could not, agree to many of the provisions in the compact.”

Governor Patrick, while negotiating with the Mashpee, has taken the position that the Aquinnah tribe waived its rights to gaming when it signed the 1983 Settlement Act that led to federal recognition for the tribe and made it subject to local and state laws.

Jason Lefferts, a spokesman of the Executive Office of Housing and Economic Development, told
The Times this week that the administration’s view is unchanged. “The Commonwealth’s position on the Aquinnah’s status has remained unchanged for 15 years and through multiple administrations,” he said, “and reflects the fact that the Commonwealth’s position has been that the two tribes are in fundamentally different situations under state law.”

The Aquinnah tribe struck out recently in its efforts to convince the voters in Freetown and Lakeville to support a $167-million casino resort on 500 acres straddling the two communities along Route 140.
As a fallback position, the tribe has said that it would turn its as yet unused community center in Aquinnah into a “boutique” casino.

Federal payback

At a general membership meeting of the Aquinnah tribe on May 6, a fraction of the membership voted to use their long unfinished community center for Class II gaming.

Class II gaming encompasses high stakes bingo, poker, pull-tab cards and associated electronic games that do not require coin slots. Unlike class III gaming, which encompasses all types of gaming and requires a tribe-state agreement, tribes may regulate Class II gaming on their own lands without state authority, as long as the state in which the tribe is located permits that type of gaming.

Kevin Dwyer, a principal in KMD Consulting services of California, the tribe’s current casino backers, said the community center could be turned into a “boutique casino” that could accommodate more than 500 coinless slot machines, with buses arriving every 45 minutes.

The steel frame for the unfinished and unused building where the tribe would house a Class II gaming facility was erected in the summer of 2004 by Air Force reservists as part of a civil engineering training exercise.

But any effort to turn the community center into a casino would come with a price tag. Laura J. Feldman, a spokesman for the U.S. Department of Housing and Urban Development (HUD), told The Times that in June, HUD sent the tribe a letter “informing them that if the tribe decided to proceed with an ineligible use of the property, they could do so provided that HUD is reimbursed the current fair market value of the property.”

HUD and the tribe agreed that the cumulative amount of funds awarded to the tribe for the project, $500,000 in fiscal year 2000, and $600,000 in fiscal year 2009, “for a total of $1,100,000, would represent the fair market value of the property and that amount would be reimbursed to HUD should the tribe proceed with their plans for the building.”

Aquinnah selectmen have said they would oppose any effort to develop a casino in the Island’s smallest town. Town counsel Ron Rappaport has said the Wampanoag Tribal Council of Gay Head Inc. cannot legally operate a gaming casino in Aquinnah, based on the terms of the Settlement Act.

Legal view

Lawyer Scott Crowell of the Crowell law office’s Tribal Advocacy Group, based in Spokane, Washington, represents the tribe.

In a telephone conversation Wednesday, Mr. Crowell said the Aquinnah tribe would continue with its efforts to take land into trust in the Lakeville-Freetown area and erect a Class II gaming facility that would not require an agreement with the state, unlike a Class III facility.

Mr. Crowell said he remains confident that federal law would trump state law with regard to gambling. He said a lawsuit against the state is possible.

“We have requested that the governor negotiate a compact with the tribe for its on-Island land,” he said. “Technically we can’t compel the governor to negotiate a compact for lands we don’t yet have in trust, so the lawsuit will not be a claim in the litigation that he has failed to negotiate the compact for the mainland.”

Mr. Crowell said he congratulates the Mashpee tribe on its success.

Asked to comment generally on the process of taking land into trust, Mr. Crowell said tribes are not required to have a historic or modern connection to the property. “That being said, the regulations clearly take that factor into account,” he said. “It is not a mandatory requirement, but it is a significant factor in the department’s determination.”

by Nelson Sigelman