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State holds the cards in Pennsylvania gaming decision

HARRISBURG, Pa. - Amid concerns over pending claims in Pennsylvania, Gov. Edward G. Rendell in a December press conference said, "No tribe so far has come close to establishing the minimum threshold for the recognition required to establish gaming in Pennsylvania."

There are three claims in various stages of the process - the Seneca, Wyandotte and Oklahoma's Delaware. When the Delaware Tribe of Indians of Bartlesville and the Delaware Nation of Anadarko last May brought a joint claim to about 315 acres in the Lehigh Valley to work out a gambling contract with Pennsylvania, the state took a strong stance against it.

To find a way around the federal process, attorneys at Cozen O'Connor, the Philadelphia firm representing the Delaware, drafted a bill that Sen. Vince Fumo (D-Philadelphia) is expected to propose to the Senate.

"If the tribes can be considered no different than anyone else in applying, the state can limit their ventures. If not, we'll proceed under federal law and not be limited in it," said attorney Charles Naselsky

It's the first time a statutory scheme would create Indian classes of applicants. The bill, if passed would create a gaming oversight board to issue licenses for slot machines at the state's six horse tracks along with about seven free-standing slot parlors. The board would also be allowed to permit two Indian casinos in the state. All of these would be subject to state regulation and 34 percent taxation.

Gary Tuma, spokesperson for Fumo, said the bill is in response to the state's deficit in its 501 school districts. The state's education budget has been stalemated since last March. It's expected to be resolved before the end of December, leaving the question of slot machines open for decision.

Legislating slots at tracks was first proposed two years ago as a way to generate $1 billion in revenues to lower property taxes. In recent months, proposals to expand slots to non-racetrack sites came under strong opposition. Fumo commissioned a market study by Innovation Group in New Orleans that concluded the state would need 12 to 13 slots located strategically around the state that would raise about $2 billion.

"Because they are making a claim to Pennsylvania and the federal process would allow them to have no regulation and not pay taxes, the Senator is proposing bringing them under this bill," said Tuma.

The Fumo bill would allow Class III slot machines. In return, the tribes would waive their sovereignty, renounce existing land claims and be granted the right to operate two slots, or possibly more, and pay taxes. In its current draft, it will be open to any tribe who are federally recognized and not gaming in any other state and who have established a claim to Pennsylvania as a homeland. Tribes would agree to be regulated like anyone else by undergoing background checks and paying the same tax rates as others operating slot parlors.

"There's a lot of big districts wanting slot licenses in Pennsylvania," said Tuma. "American Indians have to press for licenses anyway, why not go through the typical license and not have the expense of fighting litigation."

The Delaware Tribe and Delaware Nation both are asking the government to include them in its current slot proposal. While the tribes prefer to partner with the state, the Delaware Casino Development & Management L.L.C., which is working on behalf of two Oklahoma tribes, hired a real estate firm to find land in Southeastern and Western Pennsylvania for Class II gambling. Once land is purchased, it could take two or more years to be put under BIA trust.

The Delaware have made past efforts to enter the gaming arena without success. Under federal law, "restored tribes" are treated differently because they had federal status, lost it, and recovered federal status through administrative or congressional action. In 1979 an acting deputy commissioner of the Department of Interior made a decision to deal in government-to-government relationships with the Delaware through the Cherokee Nation. The Western Delaware in Anadarko were never terminated.

The Delaware Tribe, which had its tribal status "restored" in 1996, does not need to prove a land claim to secure the right to conduct gaming operations. Federal law provides an exception that would allow the Delaware to conduct gaming on all restored land. The law provides that land acquired by the tribe and placed into trust because of the tribe's historic connection to the Commonwealth will meet the definition of restored land and therefore qualify as a gaming site.

"What we've got so far is a rumor and claims they're going to take action but so far nothing has been done," said Chuck Ardo, spokesperson for Rendell. "The governor can't comment until he sees the actual legislation."