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Let the Games Begin: Casinos, cigarettes and Rhode Island

Other than being considered "vices" or "sources of tax revenue" by significant portions of the general public, cigarettes and casinos would appear to have little in common. In present-day Rhode Island, however, the two are inextricably intertwined.

On July 14, simmering differences over the sale of untaxed cigarettes on Narragansett Indian tribal land boiled over as the Rhode Island State Police attempted to serve a state warrant halting sales. The resulting videotaped melee, if anything positive can be said about it, has drawn widespread attention to both the Narragansetts' desire for economic development and Rhode Island's apparent determination to foil them at all costs.

The current dispute between the state government in Providence and the Narragansett Indians is not directly about gaming, but the issue of an Indian casino in Rhode Island is never far from the forefront.

Tribal efforts at economic development have consistently met with stiff resistance from Rhode Island's elected officials. Most vehement among Indian gaming opponents was the Ocean State's former U.S. Senator John Chafee, who manifested his opposition in a very underhanded way.

On Sept. 30, 1996, a rider was attached to a federal appropriations bill; this rider effectively stripped the Narragansetts of their gaming rights under IGRA. The bill had no other bearing on Indian affairs - rather it appropriated funds to keep the federal government running. No hearing was held before the rider was passed in the middle of the night. As a result, the Narragansett Indians are the only federally recognized tribe in the U.S. excluded from IGRA.

The "midnight rider" further mandates that any proposed casino, be it Indian-owned or commercially owned, must be approved in a statewide referendum. In 1998, the state General Assembly passed a law requiring that it ratify any municipal measure or agreement involving a casino - this has become the stumbling block. The tribe has persevered to work within the framework imposed upon it.

The following year, the Narragansetts reached an agreement with the town of West Warwick, located in the central part of the state, to site its proposed gaming center there.

Learning their lessons from nearby Connecticut, where municipalities have demanded money and residents have decried crowded roads and schools, the parties forged a "Tribe-Town" agreement. Two main points in this pact are notable: one, financial compensation will be paid by the tribe to the town; and two, the casino would be located in an industrial park adjacent to Interstate 95, minimizing if not eliminating problems of intrusion by casino patrons into surrounding residential areas.

The tribe also agreed to make quarterly payments to the town of $25,000 to be used for research into the proposed impacts of the casino. The Narragansetts continue to pay into this "due diligence fund."

On June 8, 1999, West Warwick residents approved the tribe's casino proposal by a 2-1 margin in a non-binding referendum. Since that time, the General Assembly has sat on its hands, taking no action in regard to a referendum.

The Narragansetts make a very important point on their Web site when they stress that the Assembly is to consider only the viability of any casino proposal, not the merits of gaming itself. That decision is supposed to be left to the state's voters by means of referendum, which state officials have been stalling.

On Aug. 19, Attorney General Patrick Lynch testified before the Independent Review Committee (IRC), appointed by Governor Donald Carcieri to investigate the smoke shop raid.

Lynch said that prior to the raid he had urged Carcieri to avoid discussing a casino with the Narragansetts. The tribe had offered to close the smoke shop in exchange for Carcieri dropping his opposition to a statewide referendum on its proposed West Warwick casino. Carcieri instead reiterated his promise to veto any Assembly action authorizing such a vote.

"The law has nothing to do with a casino," Lynch told the panel, apparently meaning that the two issues, untaxed cigarettes and the proposed casino, are unrelated. How wrong he is.

In addition to their complete lack of foresight regarding the financial opportunity a Narragansett casino would present to the fiscally ailing state, Rhode Island's anti-Indian casino officials appear to possess a lack of understanding of what it means to negotiate with another sovereign entity on a government-to-government basis.

As Ernie Stevens, president of the National Indian Gaming Association recently said on national television, "I think any type of negotiation between sovereigns is workable."

Agreed, if each side genuinely respects the other's sovereignty and if both parties are willing to compromise. The Narragansetts, have demonstrated this - as evident by the Tribe-Town agreement and by working through the federal and state restrictions described above. The state generally has not. Here are some suggestions on how to make this thing work:

In return for a statewide referendum on the proposed casino, the Narragansetts, as offered by Chief Sachem Matthew Thomas, agree to cease reservation sales of untaxed tobacco products to non-Indians. That way, the state keeps its $1.71 per-pack tax, one of the highest such rates in the country.

If the referendum passes, the tribe and the state then negotiate a gaming compact that includes reasonable revenue sharing payments to the state. In return for making such payments, the tribe would receive a long-term or perhaps indefinite compact allowing for more favorable financing.

If the referendum fails, the tribe is permitted to resume tobacco sales to non-Indians, perhaps collecting a modest tribal tax. This could mollify the state by partially offsetting the tribal price advantage while the additional monies represented by the "tax" would remain with the tribe. Carcieri, who in his Aug. 19 testimony to the IRC promised state economic development aid for any tribal project besides a casino.

With such a deal, both sides can win. The state gets money either way, although the potential of a Connecticut-style windfall can only be realized through a casino. Likewise, the tribe gets some form of economic development assistance either way - although, again, the casino holds much greater promise than cigarettes and state aid.

The key is the referendum. The tribe has done its part to follow the restrictions imposed by Chafee's midnight rider and the state assembly. The governor and the Rhode Island legislature should now do their part and allow the referendum.

Are Rhode Island officials afraid that the state's votes may actually approve of a Narragansett casino? I'd bet on it - they're digging their heels in so deep to hide the fact that they're shaking in their shoes.

Some information in this column was obtained from the Narragansett Tribe's Web site: