Post by blackcrowheart on Dec 2, 2005 14:23:51 GMT -5
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McCain, Jarred by Indian Casino Growth, Wants Interstate Limits
Nov. 30 (Bloomberg) -- The Eastern Shawnee Indians run Bordertown Bingo & Casino in tiny Seneca, Missouri. Their real jackpot may be three states away, near Ohio's biggest cities.
The Shawnee, based in Oklahoma and Missouri, say settlers pushed their ancestors off tribal land in Ohio two centuries ago. They want the land back, and they want to build four casinos, which would be Ohio's first.
Some 20 U.S. tribes are staking similar claims off their reservations. As Indians and their corporate partners, such as Harrah's Entertainment Inc., pursue distant new markets, lawmakers in Washington, including Senator John McCain, are moving to set new federal limits.
``No one believed that Indian gaming would be an $18.5 billion-a-year business, no one in their wildest dreams,'' says McCain, an Arizona Republican who is chairman of the Senate Committee on Indian Affairs.
McCain, 69, who helped write the 1988 U.S. law that allowed Indian tribes to run casinos in states that permit gambling, introduced a bill Nov. 18 that would restrict off-reservation gaming to a tribe's home state.
In a hearing this year, McCain said gaming had enabled ``underfunded'' tribes to profit and provide services for their members. He also said that, given the unanticipated growth of the Indian casino industry, it was time to review the 1988 law. ``It is going to be a delicate proposition,'' he said.
Votes on McCain's bill and similar legislation haven't been scheduled. McCain's Indian Affairs Committee is in the midst of an investigation of Washington lobbyist Jack Abramoff, who represented a Louisiana tribe opposing an off-reservation plan by another tribe.
$66 Million in Fees
The committee is examining the conduct of Abramoff and his former partner, Michael Scanlon. On Nov. 21, Scanlon, 35, pleaded guilty to a conspiracy charge in U.S. District Court in Washington, saying he had conspired to defraud four Indian-tribe clients. Abramoff, 46, is the target of a U.S. Justice Department investigation. Scanlon's plea agreement calls for Scanlon to cooperate with prosecutors.
Scanlon and Abramoff took in more than $66 million in fees from 2001 to 2004 from tribal clients, McCain said in June. The two directed some of those funds to congressional campaigns in a bid to win influence, according to e-mails released by the Indian Affairs panel.
In 2003, Abramoff was lobbying for the Coushatta Tribe of Louisiana. The e-mails show that Abramoff wanted to block a plan by the Jena Band of Choctaw Indians to open an off-reservation casino that would compete with one run by the Coushattas.
`Aggressive Advocate'
The Coushattas spent almost $37 million on fees and donations directed by Abramoff and Scanlon, according to McCain's committee. Abramoff declined to answer questions at an Indian Affairs Committee hearing in 2004. This year, he was quoted in a May 1 New York Times Magazine article as saying he had been an ``aggressive advocate'' for his clients and that he had operated in a ``legal framework.''
His spokesman, Andrew Blum, said Abramoff wouldn't comment for this article. Blum said earlier this month that the tribes got their money's worth.
``The Jack Abramoff scandal has really been a bee in John McCain's bonnet,'' says Steven Light, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota in Grand Forks.
More Indian Affairs Committee hearings on gaming and off- reservation casinos are planned for next year.
This past June, Senator David Vitter, 44, a Louisiana Republican, introduced a bill that would bar tribes from opening casinos on land to which they have little or no connection.
Ohio Senators
Both Ohio senators, George Voinovich and Mike DeWine, support the Vitter bill and oppose the Eastern Shawnee plan.
``They are trying to take advantage of coming up and claiming they've got rights to some land they haven't been on forever,'' says Voinovich, 69, a Republican.
The Eastern Shawnee filed suit in June against the state of Ohio, seeking the return of about 146 square miles (378 square kilometers).
``They were forced out at the point of bayonet,'' says Mason Morisset, a Seattle lawyer representing the tribe.
Last year, gambling revenue at the 405 Indian casinos and bingo halls in the U.S. totaled $19 billion, quadruple the take on the Las Vegas Strip, according to Boston-based Analysis Group. Indian gaming revenue also grew almost twice as fast as commercial casino wagering, 12 percent compared with 6.7 percent.
Stricter regulations on Indian gaming, to curb what critics call ``reservation shopping,'' would affect growth opportunities for casino companies that are the tribes' business partners.
`Off the Table'
``The McCain bill will certainly take some opportunities off the table,'' says Charles Degliomini, a vice president with Empire Resorts Inc., a Monticello, New York-based company that is working to open a casino in New York's Catskills resort region with the St. Regis Mohawk Tribe, based in upstate New York.
Las Vegas-based Harrah's, the world's largest casino company, with third-quarter revenue of $2.3 billion, manages four casinos on behalf of tribes in North Carolina, California, Arizona, and Kansas. Company spokesman David Strow declined to comment on the off-reservation gaming issue and pending legislation.
In the third quarter, Harrah's management fees from Indian casinos rose 42 percent to $23 million.
Thunder Valley
Station Casinos Inc., also based in Las Vegas, operates the Thunder Valley Casino in Lincoln, California, north of Sacramento, on behalf of the United Auburn Indian Community. In the third quarter, management fees for this casino and a non- tribal casino in Las Vegas rose 20 percent to $24 million.
Many other casino companies would like to pursue off- reservation sites, says Joe Fath, a casino industry analyst with Baltimore-based T. Rowe Price Group Inc., which oversees $258 billion and has a position in Harrah's and MGM Mirage, also based in Las Vegas.
For smaller companies like Station, which had third quarter sales of $276 million, the management contracts might generate a stable revenue stream. For large companies like Harrah's, managing Indian casinos is a marketing tool, says Fath. ``It's good for the distribution of their brand,'' he says.
Changing the rules may hurt gaming-equipment manufacturers as well. Reno, Nevada-based International Game Technology, the world's largest slot-machine maker, generated 27 percent of its $2.4 billion in revenue for the 12 months ended June 30 by selling machines to Indian casinos, says company spokesman Patrick Cavanaugh.
Bingo Origins
Indian gambling started in 1975 after a fire broke out at the Oneida Indian Nation reservation in upstate New York. Nearby fire departments didn't respond, and two tribe members died, says Ray Halbritter, chief executive of enterprises for the Oneidas. Searching for a way to raise money for basic services, including a fire department, the tribe began running bingo games, which soon attracted non-tribe members.
The jackpots grew, and before long other tribes around the U.S. began offering bingo.
In 1987, the U.S. Supreme Court gave tribal governments the right to establish gaming in states that permit gambling. A year later, Congress passed the Indian Gaming Regulatory Act. Since then, Indian gaming establishments have opened in 30 states.
Foxwoods, operated by the Mashantucket Pequots in Mashantucket, Connecticut, is the world's largest casino, with 340,000 square feet (31,587 square meters) of casino space and 7,400 slot machines. About 40,000 people a day visit Foxwoods.
Land in `Trust'
The 1988 act provides three ways tribes can seek to open a casino away from their reservation. They can claim land adjacent to the reservation, claim land the tribe occupied before the government moved members to a reservation, or simply purchase non-tribal land anywhere and have it placed ``into trust'' by the government, meaning the land is treated similar to reservation land.
In all cases, the tribe must have the approval of the U.S. Interior Department, state and local officials, and other local tribes. A state governor has veto power over any proposed casino.
To date, only a handful of tribes have managed to open gambling parlors off their reservations. Of those, three have gotten the kind of approval the Eastern Shawnee tribe is seeking: permission to open a casino in a more densely populated area. They are the Keweenaw Bay Indian Community in Michigan, the Kalispel Tribe of Indians in Washington State, and the Potawatomi tribe in Wisconsin.
All three tribes had land placed into trust, and the new gambling halls were all in the same state as the tribe's reservation.
Saturated Market
The Eastern Shawnee face a saturated market at home, says Terry Casey, a Columbus, Ohio-based consultant working with the tribe. Oklahoma, a state with 3.3 million residents, has 85 gaming locations.
``There's no way we can expand,'' says Charles Enyart, chief of the Eastern Shawnee.
Ohio, by contrast, has 11.5 million residents and not a single slot machine.
The tribe wants to open casinos in the Ohio towns of Lorain, about 30 miles (48 kilometers) west of Cleveland; Lordstown, near the Pennsylvania border; Botkins, one hour north of Dayton; and Monroe, 25 miles north of Cincinnati.
Nelson Rose, a law professor at Whittier Law School in Costa Mesa, California, who specializes in gambling issues, says the Shawnee aren't likely to win their suit. ``I would rather put my money in lottery tickets,'' he says.
Governor Objects
Ohio Governor Robert Taft, a Republican, opposed casino gambling when he first ran in 1998 and hasn't changed his stance, says spokesman Orest Holubec. The public officials who will decide the fate of the Eastern Shawnee and other tribes may also be put off by the influence wielded by developers and casino companies.
The Oneida Nation's Halbritter, whose aunt and uncle were the people killed in the 1975 fire, says tribes that left New York state 200 years ago shouldn't be allowed to return now to profit from the casino boom.
``These tribes had no interest in coming back until there was gold fever,'' Halbritter, 55, says. ``Local issues don't mean anything to them. They're blinded by the money.''
His tribe owns and operates the Turning Stone Resort & Casino in Verona, New York, near Syracuse. The tribe is currently lobbying against a proposal by the Sovereign Oneida Nation of Wisconsin to open a casino in the Catskills with Baltimore-based developer Cordish Co.
`Damages' Cited
The Wisconsin Oneidas say getting property to build a casino is a fair resolution of their land claims. ``The casino is how we will essentially work to pay ourselves for the damages we would otherwise be eligible to receive, '' says William Gollnick, the tribe's chief of staff.
Craig Foltin, mayor of Lorain, one of the four towns where the Eastern Shawnee want to build a new casino, says Ohio should reconsider its opposition to gambling. A new casino would generate tax revenue for his city, which has a population of 69,000 and is losing jobs.
``We're a steel and manufacturing town, and those towns don't do too well these days,'' Foltin, 38, says. Besides, he adds, ``Gambling is all around us. Five to six buses leave Lorain every single day hauling people to the casinos in other states.''
To contact the reporter on this story:
Jeannine DeFoe in New York at jdefoe@bloomberg.net
McCain, Jarred by Indian Casino Growth, Wants Interstate Limits
Nov. 30 (Bloomberg) -- The Eastern Shawnee Indians run Bordertown Bingo & Casino in tiny Seneca, Missouri. Their real jackpot may be three states away, near Ohio's biggest cities.
The Shawnee, based in Oklahoma and Missouri, say settlers pushed their ancestors off tribal land in Ohio two centuries ago. They want the land back, and they want to build four casinos, which would be Ohio's first.
Some 20 U.S. tribes are staking similar claims off their reservations. As Indians and their corporate partners, such as Harrah's Entertainment Inc., pursue distant new markets, lawmakers in Washington, including Senator John McCain, are moving to set new federal limits.
``No one believed that Indian gaming would be an $18.5 billion-a-year business, no one in their wildest dreams,'' says McCain, an Arizona Republican who is chairman of the Senate Committee on Indian Affairs.
McCain, 69, who helped write the 1988 U.S. law that allowed Indian tribes to run casinos in states that permit gambling, introduced a bill Nov. 18 that would restrict off-reservation gaming to a tribe's home state.
In a hearing this year, McCain said gaming had enabled ``underfunded'' tribes to profit and provide services for their members. He also said that, given the unanticipated growth of the Indian casino industry, it was time to review the 1988 law. ``It is going to be a delicate proposition,'' he said.
Votes on McCain's bill and similar legislation haven't been scheduled. McCain's Indian Affairs Committee is in the midst of an investigation of Washington lobbyist Jack Abramoff, who represented a Louisiana tribe opposing an off-reservation plan by another tribe.
$66 Million in Fees
The committee is examining the conduct of Abramoff and his former partner, Michael Scanlon. On Nov. 21, Scanlon, 35, pleaded guilty to a conspiracy charge in U.S. District Court in Washington, saying he had conspired to defraud four Indian-tribe clients. Abramoff, 46, is the target of a U.S. Justice Department investigation. Scanlon's plea agreement calls for Scanlon to cooperate with prosecutors.
Scanlon and Abramoff took in more than $66 million in fees from 2001 to 2004 from tribal clients, McCain said in June. The two directed some of those funds to congressional campaigns in a bid to win influence, according to e-mails released by the Indian Affairs panel.
In 2003, Abramoff was lobbying for the Coushatta Tribe of Louisiana. The e-mails show that Abramoff wanted to block a plan by the Jena Band of Choctaw Indians to open an off-reservation casino that would compete with one run by the Coushattas.
`Aggressive Advocate'
The Coushattas spent almost $37 million on fees and donations directed by Abramoff and Scanlon, according to McCain's committee. Abramoff declined to answer questions at an Indian Affairs Committee hearing in 2004. This year, he was quoted in a May 1 New York Times Magazine article as saying he had been an ``aggressive advocate'' for his clients and that he had operated in a ``legal framework.''
His spokesman, Andrew Blum, said Abramoff wouldn't comment for this article. Blum said earlier this month that the tribes got their money's worth.
``The Jack Abramoff scandal has really been a bee in John McCain's bonnet,'' says Steven Light, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota in Grand Forks.
More Indian Affairs Committee hearings on gaming and off- reservation casinos are planned for next year.
This past June, Senator David Vitter, 44, a Louisiana Republican, introduced a bill that would bar tribes from opening casinos on land to which they have little or no connection.
Ohio Senators
Both Ohio senators, George Voinovich and Mike DeWine, support the Vitter bill and oppose the Eastern Shawnee plan.
``They are trying to take advantage of coming up and claiming they've got rights to some land they haven't been on forever,'' says Voinovich, 69, a Republican.
The Eastern Shawnee filed suit in June against the state of Ohio, seeking the return of about 146 square miles (378 square kilometers).
``They were forced out at the point of bayonet,'' says Mason Morisset, a Seattle lawyer representing the tribe.
Last year, gambling revenue at the 405 Indian casinos and bingo halls in the U.S. totaled $19 billion, quadruple the take on the Las Vegas Strip, according to Boston-based Analysis Group. Indian gaming revenue also grew almost twice as fast as commercial casino wagering, 12 percent compared with 6.7 percent.
Stricter regulations on Indian gaming, to curb what critics call ``reservation shopping,'' would affect growth opportunities for casino companies that are the tribes' business partners.
`Off the Table'
``The McCain bill will certainly take some opportunities off the table,'' says Charles Degliomini, a vice president with Empire Resorts Inc., a Monticello, New York-based company that is working to open a casino in New York's Catskills resort region with the St. Regis Mohawk Tribe, based in upstate New York.
Las Vegas-based Harrah's, the world's largest casino company, with third-quarter revenue of $2.3 billion, manages four casinos on behalf of tribes in North Carolina, California, Arizona, and Kansas. Company spokesman David Strow declined to comment on the off-reservation gaming issue and pending legislation.
In the third quarter, Harrah's management fees from Indian casinos rose 42 percent to $23 million.
Thunder Valley
Station Casinos Inc., also based in Las Vegas, operates the Thunder Valley Casino in Lincoln, California, north of Sacramento, on behalf of the United Auburn Indian Community. In the third quarter, management fees for this casino and a non- tribal casino in Las Vegas rose 20 percent to $24 million.
Many other casino companies would like to pursue off- reservation sites, says Joe Fath, a casino industry analyst with Baltimore-based T. Rowe Price Group Inc., which oversees $258 billion and has a position in Harrah's and MGM Mirage, also based in Las Vegas.
For smaller companies like Station, which had third quarter sales of $276 million, the management contracts might generate a stable revenue stream. For large companies like Harrah's, managing Indian casinos is a marketing tool, says Fath. ``It's good for the distribution of their brand,'' he says.
Changing the rules may hurt gaming-equipment manufacturers as well. Reno, Nevada-based International Game Technology, the world's largest slot-machine maker, generated 27 percent of its $2.4 billion in revenue for the 12 months ended June 30 by selling machines to Indian casinos, says company spokesman Patrick Cavanaugh.
Bingo Origins
Indian gambling started in 1975 after a fire broke out at the Oneida Indian Nation reservation in upstate New York. Nearby fire departments didn't respond, and two tribe members died, says Ray Halbritter, chief executive of enterprises for the Oneidas. Searching for a way to raise money for basic services, including a fire department, the tribe began running bingo games, which soon attracted non-tribe members.
The jackpots grew, and before long other tribes around the U.S. began offering bingo.
In 1987, the U.S. Supreme Court gave tribal governments the right to establish gaming in states that permit gambling. A year later, Congress passed the Indian Gaming Regulatory Act. Since then, Indian gaming establishments have opened in 30 states.
Foxwoods, operated by the Mashantucket Pequots in Mashantucket, Connecticut, is the world's largest casino, with 340,000 square feet (31,587 square meters) of casino space and 7,400 slot machines. About 40,000 people a day visit Foxwoods.
Land in `Trust'
The 1988 act provides three ways tribes can seek to open a casino away from their reservation. They can claim land adjacent to the reservation, claim land the tribe occupied before the government moved members to a reservation, or simply purchase non-tribal land anywhere and have it placed ``into trust'' by the government, meaning the land is treated similar to reservation land.
In all cases, the tribe must have the approval of the U.S. Interior Department, state and local officials, and other local tribes. A state governor has veto power over any proposed casino.
To date, only a handful of tribes have managed to open gambling parlors off their reservations. Of those, three have gotten the kind of approval the Eastern Shawnee tribe is seeking: permission to open a casino in a more densely populated area. They are the Keweenaw Bay Indian Community in Michigan, the Kalispel Tribe of Indians in Washington State, and the Potawatomi tribe in Wisconsin.
All three tribes had land placed into trust, and the new gambling halls were all in the same state as the tribe's reservation.
Saturated Market
The Eastern Shawnee face a saturated market at home, says Terry Casey, a Columbus, Ohio-based consultant working with the tribe. Oklahoma, a state with 3.3 million residents, has 85 gaming locations.
``There's no way we can expand,'' says Charles Enyart, chief of the Eastern Shawnee.
Ohio, by contrast, has 11.5 million residents and not a single slot machine.
The tribe wants to open casinos in the Ohio towns of Lorain, about 30 miles (48 kilometers) west of Cleveland; Lordstown, near the Pennsylvania border; Botkins, one hour north of Dayton; and Monroe, 25 miles north of Cincinnati.
Nelson Rose, a law professor at Whittier Law School in Costa Mesa, California, who specializes in gambling issues, says the Shawnee aren't likely to win their suit. ``I would rather put my money in lottery tickets,'' he says.
Governor Objects
Ohio Governor Robert Taft, a Republican, opposed casino gambling when he first ran in 1998 and hasn't changed his stance, says spokesman Orest Holubec. The public officials who will decide the fate of the Eastern Shawnee and other tribes may also be put off by the influence wielded by developers and casino companies.
The Oneida Nation's Halbritter, whose aunt and uncle were the people killed in the 1975 fire, says tribes that left New York state 200 years ago shouldn't be allowed to return now to profit from the casino boom.
``These tribes had no interest in coming back until there was gold fever,'' Halbritter, 55, says. ``Local issues don't mean anything to them. They're blinded by the money.''
His tribe owns and operates the Turning Stone Resort & Casino in Verona, New York, near Syracuse. The tribe is currently lobbying against a proposal by the Sovereign Oneida Nation of Wisconsin to open a casino in the Catskills with Baltimore-based developer Cordish Co.
`Damages' Cited
The Wisconsin Oneidas say getting property to build a casino is a fair resolution of their land claims. ``The casino is how we will essentially work to pay ourselves for the damages we would otherwise be eligible to receive, '' says William Gollnick, the tribe's chief of staff.
Craig Foltin, mayor of Lorain, one of the four towns where the Eastern Shawnee want to build a new casino, says Ohio should reconsider its opposition to gambling. A new casino would generate tax revenue for his city, which has a population of 69,000 and is losing jobs.
``We're a steel and manufacturing town, and those towns don't do too well these days,'' Foltin, 38, says. Besides, he adds, ``Gambling is all around us. Five to six buses leave Lorain every single day hauling people to the casinos in other states.''
To contact the reporter on this story:
Jeannine DeFoe in New York at jdefoe@bloomberg.net