Tribal casinos in Michigan freed from 8 percent state payment

Tuesday, March 7, 2000 | 8:51 a.m.

Under a 1993 agreement, seven tribes agreed to pay 8 percent of their slot winnings to the state's Strategic Fund. The payments were to continue as long as the tribes "collectively enjoy the exclusive right to operate electronic games of chance."

But the tribes said in 1996 that they were ending the payments because passage of a state ballot proposal allowing casino gambling in Detroit ended the tribes' exclusive right to operate gambling machines.

Federal courts rejected the tribes' claims, saying that the Detroit casinos were not yet a reality and the tribes continued to enjoy a monopoly.

But after state officials approved gambling compacts with four more tribes, the seven original tribes again claimed that their monopoly was broken and they no longer needed to make the payments.

U.S. District Judge Douglas W. Hillman in Grand Rapids ruled Feb. 28 that the tribes no longer needed to make the payments, which totaled $6.8 million in 1995.

Hillman said the tribes' obligation ended Feb. 18, 1999, when the four other tribes' gambling compacts with Michigan took effect.

"This decision was the most appropriate action the courts could have taken," the Saginaw Chippewa Tribe said in a news release Monday.

Other plaintiffs were the Sault Ste. Marie Tribe of Chippewa Indians, Grand Traverse Band of Ottawa and Chippewa Indians, Keweenaw Bay Indian Community, Hannahville Indian Community, Bay Mills Indian Community, and the Lac View Desert Band of Lake Superior Chippewa Indians.

"We're appealing it," Gov. John Engler spokesman John Truscott told the Morning Sun of Mount Pleasant.

Truscott said the state believes the 1993 compact remains enforceable until the new tribes have gambling licenses in hand.

Saginaw Chippewa spokesman Frank Cloutier said the tribe had set aside $13.5 million that would have gone to the state under the old consent agreement.

That money covered the period from Feb. 18, 1999 to June, when the first casino in Detroit began operating.