Recognition, unions and a joint venture

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After many years and countless delays, postponements and holdups, the BIA has finally awarded federal recognition to the Eastern Pequot Tribe in Connecticut. In recognizing two oft-contentious factions as a single tribal entity, BIA in essence is forcing the groups to resolve their differences and re-unite, which the groups have pledged to discuss. Despite vows of appeals and lawsuits from the state's attorney general and several municipalities, the decision also opens the door for another casino in southeastern Connecticut. And although tribal officials have said they will pursue other economic ventures and would not put a casino in a community that does not want one, the tribe's factions both have financial backing from gaming interests, including Trump Hotels & Casino Resorts.

The role that state recognition played in BIA's decision cannot be taken lightly; ancestors of the Paucatucks and the Easterns, the two factions, have shared a 224-acre reservation since 1683. Two other Connecticut tribes, the Golden Hill Paugussetts and the Schaghticokes, have petitioned for federal recognition and have declared their intent to enter the gaming community. In any event, if another Connecticut tribe were to seek a Class III compact, the state's compacts with the Mashantucket Pequots and the Mohegans, the state's two current gaming tribes, would have to be renegotiated.

Is there enough potential business in the region for another casino or two? An official of the Mohegan Sun Casino thinks so. Citing demographic similarities between the Connecticut and Atlantic City gaming markets, Mitchell Etess, executive V.P. of marketing at Mohegan Sun told the New London Day that his casino can handle new competitors.

"We've always believed that Mohegan Sun was built to withstand other competition and that is exactly the reason why the tribe proceeded with Project Sunburst [a major expansion] when they did," Etess told the Day on June 25. "We believe it's a very big market; I think there's plenty of business for another casino."

To raise the stakes even higher, tribes in the adjacent states of Massachusetts and Rhode Island are seeking to open casinos of their own in the region. Whoever gets the job done first, be it the Eastern Pequots, the Wampanoags or the Narragansetts, will have a considerable advantage over latecomers. While the market appears able to absorb more gaming facilities, it is only a matter of time before saturation is reached.

In any event, the state of Connecticut, which reaps a hefty chunk of change from the two existing Indian casinos, will become the next gaming battleground. Many residents in the state's wealthy and populous southwestern region staunchly oppose casinos, while several state officials and politicians have denounced the federal recognition process as arbitrary and fraudulent. Observers of Indian gaming would be wise to keep their eyes on this small New England state.

Senecas, Mohawks and labor unions

In mid-May, the approval by members of the Seneca Nation of Indians in western New York State of a Class III gaming compact caused quite a stir. Republican Governor George Pataki, however, has yet to sign the compact. The Associated Press has reported that the tribe and state remain in negotiations over "labor union and other issues" and said no timetable has been set for a formal signing. The tribe is reportedly moving ahead anyway. Seneca officials are reportedly touring sites in Buffalo and have authorized tribal attorneys to begin acquiring land in Niagara Falls.

"We must forge ahead and initiate all the activities that are within our power to initiate," Seneca President Cyrus Schindler told the AP on June 25. "We can't just sit on our hands wait for the governor. There's too much at stake, We've identified some areas we can get started on, even without the compact being certified."

It will be interesting indeed to see how the union issue plays out. State law requires gaming tribes to open their doors to union organizers, but many tribes, in New York and elsewhere, feel that such requirements infringe on tribal sovereignty. Federal legislation to prohibit states from requiring union access to Indian casino workers has not shown much life since hearings were held on the topic in March.

The St. Regis Mohawk Tribe, however, recently announced it would allow union organizers access to employees at its proposed casino in the Catskill Mountains, which for now exists only on paper. Whether or not the Senecas, or any other tribes for that matter, will follow suit remains to be seen.

A joint venture

Surprise! Not all of the players in the world of Indian gaming are Indians! Out of necessity numerous tribes have partnered with non-native-owned businesses experienced in gaming in order to develop tribal gaming facilities, acquire gaming devices and equipment, and secure financing. A brief examination of a recently announced joint venture provides a glimpse at some of what goes on at the periphery of Indian gaming.

On June 24, Nevada Gold & Casinos Inc. announced the formation of a joint venture to provide financing and gaming equipment to the Pueblo of Laguna, which continues to develop its new Route 66 Casino near Albuquerque. The Houston-based company has partnered with The Gillmann Group to form Route 66 Casinos LLC, which will assume existing gaming equipment contracts between Gillmann and Laguna Development Corp., a Pueblo-owned company responsible for the new casino. Nevada Gold owns a 51 percent stake in the joint venture.

Those contracts include a five-year deal for 1,250 gaming devices (a.k.a. "slot machines") for the Route 66 Casino, a one-year deal for 100 slots at the Pueblo's existing temporary casino, and an agreement through February 2004 for 45 gaming devices in the Pueblo's existing Dancing Eagle Casino in Casa Blanca, N.M. The 100 slot machines at the temporary facility will be transferred to the Route 66 Casino upon its completion and are included in the 1,250-device contract. Route 66 Casino LLC expects to receive approximately 16 percent of gross slot revenue.

The joint venture will provide financing assistance for the construction of the Route 66 Casino, the cost of which is currently projected at around $60 million. Scheduled to open in 2003, the 165,000-square-foot facility will offer, in addition to the 1,250 slots, 20 table games, a 750-seat bingo hall, a 2,800-seat theater, a cabaret lounge, and several food, beverage and retail outlets.

Nevada Gold, whose stock trades on the American Stock Exchange under the stock symbol UWN, also owns a 51 percent stake in Dry Creek Casino LLC, formed to assist the Dry Creek Band of Pomo Indians develop their River Rock Casino in Sonoma County, California. On its web site, the company describes itself as "a developer of gaming properties" with real estate interests in Colorado, California, Nevada and New York.