Negotiating meaningful concessions from states in gaming compacts to further tribal economic development: satisfying the 'economic benefits' test.

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Negotiating meaningful concessions from states in gaming compacts to further tribal economic development: satisfying the 'economic benefits' test.

I. INTRODUCTION--THE USE OF TRIBAL GAMING REVENUE TO FOSTER TRIBAL ECONOMIC DEVELOPMENT AND DIVERSIFICATION II. TRIBAL GAMING AS A MEANS TO AN END A. INDIAN GAMING COMES ALIVE: CALIFORNIA V. CABAZON BAND OF MISSION INDIANS B. THE GREAT (AND FRAGILE COMPROMISE: THE INDIAN GAMING REGULATORY ACT 1. Classes of Indian Gaming 2. The Tribal Trump Card: IGRA's Good Faith Negotiation Requirement 3. The Trump Card is Trumped: Judicial Elimination of the Tribal Remedy Under IGRA and the One-Sided Compacting Process Since Seminole Tribe v. Florida 4. 25 C.F.R. Part 291: The Department of the Interior Administratively Replaces the Tribal Trump Card in Response to Seminole Tribe III. GAMING COMPACT SUBJECT AREAS: THE ECONOMIC BENEFITS TEST IV. BARRIERS TO ECONOMIC DEVELOPMENT ON THE RESERVATION AND THE SUBSTANTIAL BENEFITS TEST A. QUANDARIES WITH TRUST LAND AND TAXATION ISSUES B. ATTEMPTING TO RESOLVE THE "DOUBLE TAXATION" PROBLEM AS A SUBJECT OF A GAMING COMPACT TO PROVIDE TRIBES WITH A TAX BASE V. CONCLUSION I. INTRODUCTION--THE USE OF TRIBAL GAMING REVENUE TO FOSTER TRIBAL ECONOMIC DEVELOPMENT AND DIVERSIFICATION

Tribes in California, Florida, Maine, New York, and Wisconsin, in search of funding for tribal governmental services, opened high-stakes bingo parlors during the 1960s and 1970s long before any federal laws were enacted to address Indian gaming. (1) At the time the Indian Gaming Regulatory Act (2) (IGRA) was enacted in 1988, there were over eighty tribes licensing, conducting, and operating bingo and card games throughout Indian country. (3) Despite the relative infancy of Indian gaming at that time and lack of profitable slot machines, these Indian gaming facilities managed to gross over $110 million for the year. (4)

At this point, there are over 382 tribal gaming facilities in 28 states, operated by approximately 225 tribes, with gaming revenue surpassing $26 billion for the year 2007. (5) Much of the revenue generated, however, comes from tribal gaming facilities located in metropolitan or at least somewhat populated areas. (6) For example, the two Indian gaming facilities in Connecticut, Foxwoods Resort and Casino (owned by the Mashantucket Pequot Tribe) and the Mohegan Sun (owned by the Mohegan Tribe) account for nearly 10% of all revenue generated by tribal casinos. (7)

Based upon the yearly tribal gaming revenue statistics released by the National Indian Gaming Commission (NIGC), 22 tribal gaming facilities account for 42% of all tribal gaming revenue. (8) Each of these 22 casinos generates over $250 million yearly in gaming revenue. (9) By contrast, there are 210 tribal facilities generating less than $10 million in yearly revenue, and these tribes account for only 2% of all tribal gaming revenue. (10) In short, not every tribe or individual tribal member is making millions and millions of dollars from tribal gaming facilities and most facilities are rather modest. (11)

There are 562 Indian tribes recognized by the United States. (12) Roughly one-third of these federally-recognized tribes make up almost all Indian gaming revenue. (13) Not all tribal casinos are successful and many earn only marginal profits. (14) As Professor Kevin Washburn noted, many of the non-gaming tribes include some of the most poverty infested regions of the United States: "Not surprisingly, the most successful gaming operations are located in close proximity to large urban areas. A handful of tribes blessed by geography and demographics have been fabulously successful. The Poorest of tribes have remained the poorest communities in the United States." (15)

Even though much of the gaming revenue generated by Indian casinos comes from a small minority of tribal facilities, there are still states and citizens' groups that pour a substantial amount of resources into compact negotiations and litigating gaming-related trust land acquisitions. (16) These anti-IGRA states and citizens' groups completely misunderstand the intent and basis behind the enactment of IGRA. Overall, they are ignorant of basic concepts of federal Indian law and seem offended by the notion of tribal sovereignty. Some groups and media continue to assert IGRA must be revisited because IGRA "gives too much power to tribes." (17)

Of the tribes that have established gaming facilities, class III (casino-style) gaming is generally the most lucrative class of Indian gaming. (18) Class III gaming includes slot machines and other casino-style gaming. (19) In order for tribes to conduct class III gaming, however, a gaming compact must be executed between the tribe and the state in which the tribe is located. (20)

If and when a state is willing to negotiate with the tribe, the executive branch of state government, generally, will act as the lead state negotiator for state-tribal gaming compacts. Ratification by the state legislature, depending on the state constitution, state law, or state case law, may be required before a compact is finalized; ...

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