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rv'iAGNUSON·ANDERSON & HOGEN
Philip N. Hogen, Of Counsel
11312 N. High Meadow Dr Black Hawk, SD 57718 Ph: 605-787-6901 E-mail: phogen@.iacobsonbuffalo.col11
VIA US MAIL
Governor Rick Snyder P.O. Box 30013 Lansing, Michigan 48909 Attorney General Bill Schuette G. Mennen Williams Building, 7th Floor 525 W. Ottawa St. P.O. Box 30212 Lansing, Michigan 48909 Dear Governor Snyder and Attorney General Schutte: I am writing this from my perspective as the former Chairman of the National Indian Gaming Commission to present an analysis of the legal hurdles associated with a planned Indian casino in Lansing, Michigan. This information is being provided to you now because it has become apparent that the Sault Ste. Marie Tribe of Chippewa Indians is intent on opening an offreservation Indian casino in Lansing. All available information indicates that each party will rely upon the Michigan Indian Land Claims Settlement Act (PL 105-143) (the Act) for a legal theory as to circumvent the federal Indian Gaming Regulatory Act and applicable state laws against illegal gambling. Tribes Seek Casinos under a Non-Applicable Land Claims Act Two of Michigan's federally recognized Indian tribes located near the Canadian border in the Upper Peninsula, have sought off-reservation casinos in Lower Michigan for years. The Sault Tribe and Bay Mills Indian Community (Chippewa) was one and the same tribe until 1972 when the Sault Tribe broke off to achieve its own separate federal recognition. Since the 1980s both tribes have pursued off-reservation casinos in extremely distant locations including Detroit, Pontiac, Port Huron, Flint, Romulus, and Lansing. More recently the Bay Mills Tribe used the Michigan Indian Land Claims Settlement Act of 1997 to pursue casinos in Vanderbilt, Port Huron, and Flint. The Sault Tribe has pursued an interest in off-reservation casinos in Lansing and Romulus. The Act was enacted to distribute funds awarded by the Indian Claims Commission to Northern Michigan tribes that were party to the Treaty of 1836. The law prescribes a number of provisions for the use of the funds by each
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of the tribes. The word "casino" is never mentioned in the Act. Neither Congress nor the Clinton Administration ever contemplated that a tribe would distort the Act to try and open casinos distant from its reservation. On November 3, 2010 that is precisely what Bay Mills did in Vanderbilt; on land over 100 miles from its existing reservation in Brimley, Michigan. The U.S. Department of the Interior and National Indian Gaming Commission each issued opinions that the Vanderbilt land does not constitute "Indian lands" for the purpose of Indian gaming. As you know, in December 2010 both the Michigan Attorney General and the Little Traverse Bay Bands of Odawa Indians filed a federal lawsuit seeking closure of the Vanderbilt casino. On March 29,2011 the U.S. District Court for the Western District of Michigan ordered Bay Mills to close the Vanderbilt casino. In its determination, the Court focused on the failure of that land, so remote from the tribe's reservation, to constitute "Indian lands" for purposes of a lawful tribal gaming operation.
Tribal Gaming off Indian Lands Is Illegal Under Federal and State Laws
Federal law narrowly limits where tribal gaming facilities may be placed. The legal platform on which the Indian gaming industry is built is the Indian Gaming Regulatory Act (IGRA) of 1988, which makes it crystal clear that tribal gaming may only be conducted on "Indian lands," which IGRA clearly defines. If gambling is conducted where it is neither authorized by IGRA nor Michigan state law, the Sault Tribe and Bay Mills officers and employees would violate the Organized Crime Control Act, a federal criminal law which constitutes a federal felony. This law, enacted to combat organized crime, prescribes a hefty fine and a maximum term of five years imprisonment. State law makes it illegal to keep or occupy any common gambling house or any building or place where gaming is permitted if Michigan has not authorized it by statute or tribal-state compact. Offenses of this nature are treated as "Racketeering" under Michigan law, which can expose violators to felony penalties of imprisonment for 20 years and/or fines of $100,000, and property forfeiture. Indians and non-Indians are subject to these provisions.
State of Michigan's Enforcement Authority
The State of has authority to take enforcement action and arrest tribal officials, tribal agents, casinos employees, and patrons of illegal casinos. In December 2010 both federal agencies with oversight authority ofIndian gaming (Department of the Interior and National Indian Gaming Commission) both opined that the Vanderbilt casino land in not "Indian lands" for the purpose of lawful Indian gaming. Therefore, state laws which prohibit illegal gaming apply to lands in Lansing, Romulus, Flint, Port Huron and Flint. As Judge Maloney observed in his ruling regarding the Bay Mills Vanderbilt operation:
The Court finds that Bay Mills is operating the Vanderbilt Casino illegally. As a result, through the continuing operation of the Vanderbilt Casino, Bay Mills invites the public to violate Michigan's prohibition on
attending gambling houses, a misdemeanor. See Mich. Cornpl. Laws §750.309. The public has an interest in not being enticed to violate the law. Violations of Michigan Tribal-State Gaming Compacts Michigan Tribes may only conduct Class III casino gaming in accordance with their tribal-state compacts, which provide that Tribes shall not conduct any Class III gaming outside of Indian lands. Section 9 of the compacts requires a written agreement between everyone of the federally recognized tribes in order to conduct off-reservation gaming. Since operations such as the shuttered Bay Mills casino in Vanderbilt, and a potential Sault Tribe casino in Lansing or Romulus, violate the compacts, any individual or entity can request that the State initiate dispute-resolution procedures under the compact. Under those rules, after a notice and negotiation period, the State could force a tribe(s) to arbitrate the violation, and could ask the arbitration panel to cancel the compact. If the State did seek arbitration and cancelation of the compact, and the panel cancelled the compact, then such tribe(s) could not operate any Class III casinos. Thus; a tribe(s) opening and operating an illegal tribal casino is placing its entire lawful Class III gaming operation at serious risk. This would have a profoundly negative impact on such tribe(s)' tribal government services for the benefits of its citizens. National Indian Gaming Commission Enforcement For an Indian tribe to lawfully engage in gaming, it must comply with IGRA, the regulations promulgated by the National Indian Gaming Commission (NIGC) and its own tribal gaming ordinance. Each of these legal authorities limits lawful tribal gaming to "Indian lands." When individuals conduct gaming not so authorized, and when it neither qualifies as lawful Indian gaming nor complies with the State Law wherein it is conducted, such activity is conduct that the NIGC has the authority to determine as posing a threat to the public interest and the effective regulation of gaming as an illegal practice. Such a determination could disqualify such individual officers of Indian tribes from holding tribal gaming licenses, which are required under IGRA, NIGC regulations, and tribal gaming ordinances in legitimate tribal gaming operations. Thus, those who manage or conduct such unlawful gaming put their tribal gaming licenses, monitored by the NIGC, and their license-ability for other legal Indian gaming at great risk. Sault Tribe/Bay Mills Officials, Employees, and Patrons Subject to Arrest Opening tribal casinos where they do not legally belong poses very serious risks to all those associated with such efforts. The unsuccessful effort by Bay Mills to establish a casino at Vanderbilt, Michigan, and similar reported efforts by the Sault Tribe could very well expose those tribes, their Tribal Council members, Gaming Commission members, gaming employees (Indian and non-Indian) - even the patrons of those unlawful facilities - to federal or state criminal penalties.
Officials of the Sault Tribe and Bay Mills could be held personally responsible for illegal gaming activities that take place as a result of their leadership and decisions. On August 9, 2011 the U.S. COUlifor the Western District of Michigan granted the State of Michigan's motion to include Bay Mills' individual officers in the pending federal lawsuit against the illegal casino in Vanderbilt. These individuals are now party to the lawsuit along with the tribal government. The Bay Mills officials, and those of any other tribe attempting unlawful off-reservation casinos, could find themselves being held personally accountable for such illegal actions. Implications tribal gaming at distant off-reservation locations Just as the Vanderbilt casino was illegal under IGRA, so too would tribal gambling sites in Lansing, Romulus, Flint, Port Huron, or other distant off-reservation locations. The Sault Tribe has no more right under IGRA to operate a casino in Lansing, than Bay Mills did in Vanderbilt. The distant sites do not constitute "Indian lands," as defined by IGRA and therefore Michigan state gambling laws apply. Conclusion In view of my experience as the longest-serving Chairman of the National Indian Gaming Commission, I was asked to review this matter by the Saginaw Chippewa Indian Tribe of Michigan, whose concern for integrity in the Indian gaming industry I share. Unless it is first determined that lands where tribes conduct their gaming under the Indian Gaming Regulatory Act truly qualify as Indian Lands, that integrity is at peril, a I concerned need to observe and uphold the applicable laws.
Philip N. Hogen (of Counsel)
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