Tribes, Michigan settle gaming revenue dispute

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By Tim Martin -- Associated Press

LANSING, Mich. (AP) - Michigan officials announced the settlement of a long-running dispute with two American Indian tribes over the portion of gaming revenues paid to the state March 21.

The new deal announced by Gov. Jennifer Granholm with the Little River Band of Ottawa Indians and the Little Traverse Bay Bands of Odawa Indians will pump millions of dollars into funds used to boost economic development in the state.

The tribes, based in the northwest part of Michigan's Lower Peninsula, contended that the Michigan Lottery's Club Keno game violated an exclusivity clause in their 1998 compacts with the state. The tribes withheld revenue sharing payments to the state as a result, starting in 2004, and the dispute wound up in court.

Before the rift, the tribes had been paying 8 percent of their electronic gaming profits to the state. The new agreement calls for the amount to drop to 6 percent in most cases.

The tribes had built up $52 million in escrow accounts while the dispute over where the slot revenues were stalled in court. Under the agreement, half of that money will go to the state and half will go to the tribes.

The tribes agreed to some modifications that should make the revenue payments more stable in future years.

Exclusivity rights will no longer be defined on a statewide basis, but rather on a more limited regional basis. Lottery and similar state-sponsored gaming will not be considered new commercial gaming unless it involves large-scale use of electronic machines.

New commercial gaming within a tribal casino's market no longer will result in a permanent end to the revenue sharing payments. Instead, payments could be suspended and then resumed later at a lower rate if the tribe's casino revenues continue to grow.

The deal should give Michigan more money to use toward generating jobs at a time its unemployment rate is the highest in the nation.

''This agreement restores funds vital to Michigan's economic development efforts at this critical time and will help ensure a more stable and cooperative economic relationship between the state and these two tribal governments,'' Granholm said in a statement.

In a joint statement released through Granholm's office, officials from both tribes said they were pleased with the agreement.

''We have many tough economic challenges that are much easier to work through when we all work together,'' Little Traverse Bay Bands of Odawa Indians Tribal Chairman Frank Ettawageshik said in the statement.

Michigan's slice of gaming revenue through tribal compacts peaked at more than $40 million in the late 1990s. But the revenues were cut by more than half after the state allowed casinos to open in Detroit, which some tribes considered a violation of their compacts with state government.

The Club Keno dispute cost the state more money from tribal casinos. Revenue sharing payments dropped to less than $3 million per year in recent years.

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