Babbitt to be key player in Indian gaming

Gary Thompson

Thursday, March 28, 1996 | 11:59 a.m.

Interior Secretary Bruce Babbitt will play a critical role in the high-stakes war over Indian gaming now that the Supreme Court has barred tribes from suing states.

Long considered an Indian ally in Washington, D.C., Babbitt is almost certain to be swamped with appeals from tribal leaders across the country hoping to add gambling to their reservations despite opposition from anti-gaming states.

That's because the narrow ruling by a sharply divided high court allows tribes to circumvent the courts entirely and appeal directly to the Interior Department to decide disputed issues. And Babbitt supports Indian gaming.

The stage for the first such appeal may be set as early as today, when Poarch Creek Tribal Chairman Eddie Tullis announces plans for a land-based casino in Atmore, Ala., whose governor opposes Indian gaming.

"Tullis is going to make that announcement because the Supreme Court didn't overturn the Indian right to go directly to the secretary of the interior," said gaming consultant Nancy Todd. "And they've got a good friend in Bruce Babbitt."

While Babbitt had no comment, a spokeswoman said today he favors gaming as one method of improving financial conditions in depressed tribal areas.

"We were disappointed because we understand the ruling throws the issue back into our laps," said Interior Department press secretary Mary Thompson. "We'll have to look at the ruling, but the secretary has always been supportive of Indian gaming."

Thus, what was initially seen as a victory for those opposed to the spread of Indian gaming and a blow to tribal sovereignty may in fact be just the opposite.

It's likely appeals will be decided on a case-by-case basis, with politics weighing heavily in the process.

Babbitt's decisions also will have far-reaching political and economic effects as more tribes scramble to enter the $6 billion-a-year Indian-gaming industry that today spans 24 states and 200 tribes.

Initial reaction was mixed in the wake of the high court's ruling Wednesday as interested parties struggled to understand its impact. Most gaming operators and lobbyists adopted a wait-and-see attitude, while some financial analysts said it could hurt Indian casino suppliers.

"I think it kicks a very strong leg out from underneath Indian tribes in an effort to force states to negotiate a compact (to allow gambling)," said Smith Barney analyst Harry Curtis.

But Todd said it does just the opposite -- at least for the short term. "Whenever the Indians get in front of Babbitt, he goes along with them," she said.

Wall Street was ambivalent. Grand Casinos Inc., which operates four Indian casinos, saw its common stock rise 37.5 cents a share Wednesday, closing at $31.125, while Sodak Gaming Inc., a large supplier of video gambling machines to Indian casinos, fell $3 to $22.25. International Game Technology, which makes the machines distributed by Sodak, slipped 25 cents to $13.50.

"This is a very complicated decision that's more than 100 pages long," said a Grand Casinos spokeswoman. "We really don't expect any impact on our current agreements, but we want to review the ruling before making any further comments."

Tom Acevedo, acting director of the National Indian Gaming Association, couldn't comment until reviewing the decision, a spokeswoman at the group's Washington office said.

"The Supreme Court has thrown the ball back to Congress," said Kelly Gannon of the American Gaming Association, the non-Indian casino industry's lobbying arm in Washington. "This issue was created by Congress and has to be handled by Congress."

The ruling, termed a landmark expansion of states' immunity from federal lawsuits, declared unconstitutional a provision of a law that permits tribes to file suit if states aren't negotiating in good faith in casino gambling disputes.

The impact of the ruling goes far beyond tribal gambling, however. Analysts said the court is setting strict new limits on Congress' power to enforce federal laws against state governments -- and that could give the states broad immunity from environmental laws, copyright, patent, bankruptcy and antitrust statutes.

While the opinion is a landmark for states' rights, the eventual impact on Indian gambling "is certainly not resolved by this decision," said Beverly Pohl, a Florida attorney whose firm represented the Seminole Indian tribe before the Supreme Court.

Florida won the immediate battle over whether a federal court could force it to negotiate with a tribe seeking gambling on Seminole land around Hollywood and Tampa and in the Everglades' Big Cypress Reservation.

But the Supreme Court explicitly refused Florida's request to overturn the provision of the law that let the Interior secretary make the ultimate decision on tribal gambling.

At least five similar disputes are pending at the high court, involving casino battles with the states of Alabama, Washington, Oklahoma, Kansas and Montana. New Mexico and South Dakota have fought similar skirmishes in lower federal courts.