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Santee tribe takes new approach to legalize gaming

SANTEE, Neb. - The 80 Las Vegas-style slot machines lining the gaming floor at the Santee Sioux Tribe's Ohiya Casino since the doors opened in 1994 have been replaced by 50 pull-tab machines in an effort to end a financially draining seven-year legal battle.

Instead one-armed bandits triggering the sound of coins dropping into metal trays, the new machines release cards to be cashed in if the customer wins.

While the machines carry an element of excitement, the immediate gratification of seeing money fall into the tray is gone. What remains are the beeps and flashing screens indicating winning cards.

The move was a mighty effort for the Santee tribe, which stalemated federal and state officials for nearly seven years in a dispute over casino slot machines. The officials maintained the casino operation was illegal without a compact because Nebraska law prohibits the devices. The Santee persisted even when federal authorities imposed fines of nearly $6,000 a day, costing the tribe more than $4.6 million.

Though the tribe had hoped the state Legislature would intervene by allowing a Las Vegas-style gaming measure to be placed on the ballot, proposals failed in the past two sessions of the General Assembly, languishing in committee.

Santee Councilwoman Thelma Thomas, former casino manager, said the tribe made the change to accommodate demands of federal prosecutors. She said the switch is a simply an adjustment, not a surrender.

"We're trying to move forward for the betterment of the tribe."

Defiance has been costly. The tribe now owes nearly $4.6 million in accumulated federal fines. Although that money probably won't be collected, federal authorities have frozen many tribal bank accounts.

Tribal Chairman Roger Trudell said the situation has forced tribal business and economic development to a standstill.

"You can't borrow money. You can't apply for grants. You can't do anything," Trudell said earlier this year.

Last year the tribe was forced to lease its two business interests, a gas station and a grocery, because of cash-flow problems linked to the court fines.

The judgment created other obstacles to potential business development including a telecommunications facility that could have employed more than 200 people. The frozen bank accounts made private companies reluctant to deal with the tribe.

Robert Whipple, who co-manages the casino, said the new machines are legal and considered Class II games. Federal authorities are still sorting out whether the machines are legal.

Class II games, which include pull-tab devices or pickle cards, don't require a compact with the state. Las Vegas-style machines are considered Class III devices and require a state compact before the tribes can legally operate them. The Santee held their ground arguing the state had refused to negotiate in good faith and contending the 80 slot machines were the best hope they had of escaping poverty.

The Santee are in the process of seeking retrocession, asking the federal government to take a larger jurisdictional role in tribal matters. The push for retrocession comes after tribal officials and the Knox County Sheriff's Office failed to renew a contract for services last year.

Officials of the National Indian Gaming Commission and the tribe said they expect the commission and the U.S. attorney's office ultimately will agree the new machines are legal. Commission attorney Kevin Washburn said he expects a quick ruling on the matter.

The tribe also is waiting for the courts to sort out provisions of the National Indian Gaming Act of 1988 and a subsequent challenge to secretarial authority to approve gaming compacts should a state fail to negotiate with tribes. If the authority is upheld, the Santee could apply to the secretary of the Interior to impose a compact on the state and tribe.

Nor have the Santee given up on the idea of Las Vegas-style gaming at the casino, Whipple said. The only viable hope for Las Vegas-style slots lies in changing the Nebraska Constitution to permit Class III gaming.

As for the new machines, not everyone is happy with the new look at Ohiya Casino. Local residents who played the new machines May 25 were not particularly enthusiastic, saying the slot machines were more exciting.