Asked and Answered-- Betting on a casino in downtown Lansing?

By Steve Thorpe

Legal News

U.S. District Court Judge Robert Jonker recently ruled in favor of the State of Michigan in its efforts to halt development of an off-reservation tribal casino in downtown Lansing.

The Sault Ste. Marie Tribe of Chippewa Indians and Lansing Mayor Virg Bernero had announced plans for a $245 million casino in January 2012. But the new injunction stops the tribe from applying to have the land taken into trust, which is the next step for conducting gaming, until it can be established that a provision the Sault tribe claims exempts it from state rules is legal.

Matthew Fletcher is a professor at the Michigan State Law School, Director of the Indigenous Law and Policy Center and an acknowledged authority on Indian gaming law. He answered questions from The Legal News about the issue.

Q: Who are the main players in this high-stakes drama?

A: The main players are the Sault Ste. Marie Tribe of Chippewa Indians, former owners of the Greektown Casino in Detroit, the State of Michigan, the City of Lansing, the Saginaw Chippewa Indian Tribe, and the Nottawaseppi Huron Band of Potawatomi Indians.

Q: Tell us about the Michigan Indian Land Claims Settlement Act, which is playing a key role in this disagreement.

A: MILCSA allows 5 Michigan tribes who were parties to the 1836 Treaty of Washington, including Sault Tribe, to spend land claims settlement money for specific purposes. Each tribe drafted provisions enacted by Congress that details their plans on how to spend the money. Sault Tribe's section reads:

Any lands acquired using amounts from interest or other income of the Self-Sufficiency Fund shall be held in trust by the Secretary for the benefit of the tribe.Sault Tribe argues that the land it has purchased in Lansing must be acquired in trust by the Interior Secretary, which arguably makes the land gaming-eligible.

Q: Sault Ste. Marie Tribe Chairman Aaron Payment said the tribe would continue to pursue what he called the tribe's legal right to develop a casino in Lansing, saying "Today's ruling is simply the first step in the legal process." Do you expect his group and the financial backers to pursue this to the end?

A: The potential gaming market in mid-Michigan is impressive, so yes I anticipate Sault Tribe and its backers to take this to the very end. We're talking $150-200 million gross a year once it's up and running.

Q: James Nye, a spokesman for the Nottawaseppi Huron Band of Potawatomi, Saginaw Chippewa Indian Tribe, applauded the ruling, saying that tribal-state gaming compacts were "intended to stop tribes from reservation shopping for casinos in the homelands of other tribes." Can you explain that argument for us?

A: Mr. Nye is overstating it a little bit. I do believe that Gov. Engler and his negotiators intended Section 9 to serve as a de facto limit on off-reservation gaming in Michigan. Ironically, as soon as the 1993 compacting tribes signed the deal, though, they started cutting side deals. However, Sault Tribe is arguing that Section 9 is irrelevant because of the land claims settlement statute.

Q: What is likely to be the next step in this process and when might it take place?

A: The next step is to litigate the Section 9 question; that is, whether it applies at all because of MILCSA and, if so, whether it forecloses the fee to trust application. I was surprised that Judge Jonker shut down Sault Tribe this early in the process, but it really hurts the tribe. Had Sault Tribe put in their application, the federal government is a party. And especially if Interior took the land into trust, suddenly the United States is a defendant, and they're much more difficult to defeat than a mere Indian tribe. And no one is better suited to know the implications of an injunction at this early date than Judge Jonker, with all his experience litigating against the United States in Indian gaming cases.

Q: If you were a betting man, what would you say are the odds of the Lansing casino ever being built, at least be the current proposed ownership team?

A: Flip a coin. Sault Tribe, because of its advantageous position as a result of MILCSA, has the best chance of any tribe. But the Section 9 problem may shut it all down. Moreover, all it takes is one rider in an Interior appropriations bill to undercut that provision. Finally, Sault Tribe doesn't have the best track record in operating massive downstate casino operations.

Published: Thu, Apr 11, 2013

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