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Brother vs. Brother vs. Red Tape

Plans of the Ho-Chunk Indian Nation for another Wisconsin casino resort has pitted it against some formidable opponents—and some odd allies

Brother vs. Brother vs. Red Tape

American Indian opposition to a planned casino resort in rural Wisconsin illustrates the complexities facing federal, state and tribal regulators as tribes nationwide confront one another over new and expanded casino projects in an increasingly competitive market.

Wisconsin tribes are angry at the Ho-Chunk Indian Nation’s plans to build an upscale casino resort in Whittenberg, on land designated by state gambling regulators as an “ancillary” site normally limited to slot parlors and convenience stores.

The tribes contend the project violates Ho-Chunk’s tribal-state regulatory compact, its gaming ordinances and federal law on the eligibility of trust lands for casinos.

At least two of the tribes—the Stockbridge-Munsee Band of Mohicans and the Menominee Nation—will see a significant drop in business at their tribal casinos as a result of the Ho-Chunk project, which will siphon customers from the Wausau market.

Other tribes fear a broad interpretation of the “ancillary” clause in the tribal-state compact will result in a dramatic expansion of gambling in the state.

As is the case with tribes facing potential casino competition in Washington, California, Arizona and elsewhere, Stockbridge-Munsee, Menominee, the Oneida Nation of Wisconsin and other Wisconsin tribes are lashing out at what they perceive to be ineffective, inconsistent and non-transparent state and federal gambling regulations.

Unlike commercial casinos, tribal operations are government enterprises intended to fund health, education, housing and other services for their citizens.

Tribal casinos largely operate in accordance with the Indian Gambling Regulatory Act (IGRA) of 1988, which for Class III casino-style gambling requires a tribal-state regulatory agreement, or compact. They are also subject to a myriad of complex federal and state regulations and often-vague federal Indian policies molded by political interests on Capitol Hill.

New and expanded Indian casinos on existing reservations and newly established trust lands often create competition for other indigenous communities dependent on gambling revenues, resulting in a clash between federal, state and tribal governments.

Navigating the regulatory and political landscape is often long, expensive and frustrating for tribes seeking to get into the business and others trying to put a stop to additional gambling.

“You’re talking about complexities in the land-trust laws. You’re talking about complexities with regulations. And you’re talking about complexities with politics—tribal and state and federal politics,” says an Indian law attorney who requested anonymity.

“If you’re tribe A and tribe B comes into your market, are you going to say, ‘No fair; you’re going to create competition for us?’ Or are you going to say, ‘No fair; what you’re doing violates the law?’ You’re going to challenge the legality of the project.

“That’s happening more and more.”


Bad Bureaucracy?

Such is apparently the case in Wisconsin, where at least five of the state’s 11 federally recognized tribes are opposing plans by Ho-Chunk to build a $33 million, 86-room hotel and casino with 770 slot machines and 10 table games on a 10-acre parcel in Whittenberg.

The tribes are critical of Department of the Interior/Bureau of Indian Affairs policies and IGRA regulations on placing land in trust for gambling.

And they are angry at state regulators and the National Indian Gaming Commission (NIGC), a federal agency with limited oversight of Indian casinos, which are primarily regulated by tribal governments. Tribes accuse the state and NIGC of lacking transparency and failing to consistently enforce gambling regulations.

“Enforcement of IGRA relies on the regulators,” says Bryan Newland, attorney for Stockbridge-Munsee and a former senior policy adviser with Interior’s Assistant Secretary for Indian Affairs.

“We have a violation of Ho-Chunk’s gaming ordinance. We have a violation of the tribal-state gaming compact between Ho-Chunk and the state, on which other tribes depend for compliance. And we have—at least according to what’s available in the public record—a violation of IGRA’s Indian lands requirement.

“Ho-Chunk’s tribal gaming commission has not stepped forward to enforce its laws. The state has not stepped forward to enforce its compact. And the NIGC and Department of the Interior have not stepped forward to enforce the law.”

Ho-Chunk scoffs at the accusations, which it claims are fueled by competitive fears.

“We know what’s in our compact, and the state knows that we’re staying within the limits of our compact,” Ho-Chunk President Wilfrid Cleveland told FOX 11 News. “This project is just to fulfill what we planned for from the beginning,” Cleveland says of a compact signed in 1993 and amended 10 years later.

State officials acknowledge vague wording in the compact of what constitutes an “ancillary facility” is causing much of the controversy.

Ho-Chunk’s compact allows the tribe to operate four site-specific “gaming facilities”—described as a business with the primary purpose of gambling—and five “ancillary facilities.”

“Ancillary facilities” in 1993 compacts were described as businesses generating more than 50 percent of their revenue from non-gambling sales. The 2003 amended compact references the percentage of land devoted to casino and non-gambling enterprises.

Ho-Chunk spokesman Collin Price says he is not totally familiar with terms of the compact, and tribal attorneys did not respond to requests for comment. State officials also declined comment.

“We definitely feel we are within the scope of our agreement with the state,” Price says.

Federal and state officials apparently believe the project adheres to the tribal-state compact and federal land-trust laws.

Governor Scott Walker contends he has no authority to act because the amended tribal-state compact was negotiated under former Governor Jim Doyle, who left office in 2011.

Stockbridge-Munsee and Menominee threaten to pursue the matter in the federal courts, confident a judge will agree “ancillary” does not mean a hotel, 800 slot machines and high-end table games.

“They’re trying to call that an ancillary facility,” Stockbridge-Munsee attorney Dennis Puzz says. “That’s bigger than their gaming facility at their tribal headquarters in Black River Falls,” designated in the compact as a full-scale “gaming” facility.

Meanwhile, both the U.S. House Resources Committee and Senate Committee on Indian Affairs have been made aware of the Wisconsin Indian wars.

Members of both committees have previously questioned Interior policy on placing land in trust, for casinos or otherwise. And Senators John Barrasso (R-Wyoming) and John McCain (R-Arizona) are critical of NIGC enforcement of Indian casinos.


Tribes vs. Tribes

The Indian wars in The Dairy State mirror tribal confrontations elsewhere.

There are more than 480 Indian gambling facilities operated by roughly 240 tribes in 28 states, a $29.9 billion casino industry that boomed with congressional passage of IGRA. The facilities range from slot machines at traffic plazas to upscale gambling resorts.

With market saturation and increasing competition, established tribes seeking trust land for off-reservation casinos and restored, landless and newly recognized tribes seeking to get into the casino business for the first time often face opposition from state and local officials and, increasingly, other tribes.

New casinos in Washington state, California, Arizona, Wisconsin and elsewhere have resulted in long and expensive legal and political wars between competing tribes.

The Spokane Tribe of Washington, seeking an off-reservation casino, met resistance from the nearby Kalispel Indian Community. The downstate Cowlitz Indian Tribe, recognized in 2010, fought a legal battle with the Confederated Tribes of Grand Ronde.

Tohono O’odham Nation won a multimillion-dollar lobby war with local tribes in developing a suburban Phoenix casino on property obtained in a federal lands claim. And the North Fork and Enterprises Rancheria fought with nearby tribes in seeking casinos on newly acquired trust lands.

Menominee got federal approval for an off-reservation casino in downstate Kenosha, only to be rejected by Governor Walker. The project was opposed by the nearby Forest County Potawatomi Indians. And Stockbridge-Munsee was spurned by state regulations in attempting to install slot machines at a tribal golf course.

“You are seeing more instances of tribes opposing other tribes,” says economist Alan Meister with Nathan Associates, author of the annual Indian Gaming Industry Report. “In certain cases, growth has slowed. Markets have matured.

“When you expand or introduce a new gaming facility, it’s more likely to cannibalize than create new market growth, although it’s likely to do both. Every situation is so very different.”

Some Indian gaming experts contend the competitive flames burned even in the early era of compacted casinos, when the market was new and relatively open.

“When it comes to gaming issues, it’s always been contentious among the tribes,” says a tribal consultant who requested anonymity. “You have your haves and have-nots. It was contentious 10 years ago, and it’s still contentious today.”

Much of the controversy stems from Interior policy and IGRA regulations on placing new lands in federal trust for Indian casinos. There are different regulations for placing non-gaming lands into trust under the Indian Reorganization Act of 1934 and casino lands under IGRA.

IGRA generally limits gambling to tribes established when the act was passed in 1988. But IGRA allows exceptions for existing tribes seeking off-reservation casinos that get approval from the state governor and can show the projects will not be “detrimental” to surrounding Indian and non-Indian communities. It also takes casino land-trust applications from newly recognized and restored tribes, landless tribes and tribes acquiring property through a federal lands claim.

Federal regulatory criteria for determining the need and impact of gambling on newly acquired trust land is both vague and subjective, fluctuating from one presidential administration to the next. President George W. Bush imposed a virtual moratorium on placing land in trust for Indian casinos, creating a logjam of applications eliminated by Interior under the Obama administration.

“The agency has a lot of flexibility,” attorney George Skibine, onetime deputy assistant secretary for Indian affairs, says of Interior bureaucrats. “They can say yes, they can say no.”

State and local officials as well as tribes contend the land-trust process under IGRA is unpredictable and lacks transparency—a situation Skibine says can only be rectified by amending the act to more clearly define criteria for making decisions.

“The solution would be to amend the regulations to provide criteria on which to base those decisions,” Skibine says. “It would have to be a more objective test.”

A number of Indian tribes, primarily in California, have discussed that solution with the National Indian Gaming Association, a lobby and trade association, which has for years opposed amending IGRA.

The tribes claim inconsistent federal Indian policy and land-trust regulations exacerbate tensions between tribes seeking casinos and those looking to halt the projects.


The Debate in Dairyland

Tribes opposed to the Ho-Chunk project contend the 10-acre site, a portion of a larger tract of land deeded to the nation by the Native American Church and placed in trust by Interior in 1969, fell out of trust five years later when it was not developed for housing, a condition of the transfer.

But Alison Grigones, senior policy adviser to Interior’s assistant secretary for Indian affairs, says the property has maintained its federal trust status since 1969, prior to passage of IGRA, making it automatically eligible for gambling.

“It’s been in trust since the ’60s and has never come out,” Grigones says.

Because the review was not part of a fee-to-trust application under IGRA, documents and other investigatory evidence is considered private under attorney-client privilege, she says.

The trust status of the property also was part of a 2008 compliance check by NIGC, but it was not made public, as are most land determinations for gambling under IGRA.

“This review is internal, and the results are not posted on our website,” NIGC Chief of Staff Shannon O’Loughlin says.

Meanwhile, NIGC General Counsel Michael Hoenig says once Interior has found a newly signed tribal-state compact to be in compliance with IGRA, his agency has no authority to investigate possible violations of the agreement. That authority rests with the tribes and the state.

“The issue Stockbridge has put forth is that Ho-Chunk and the state are not in compliance with their own compact,” Hoenig says. “That’s not for us to determine. We’re not a party to the compact and we don’t enforce compacts.”

Meanwhile, the Ho-Chunk ordinance simply states the tribe will comply with the agreement.

“The ordinance has a sentence that Ho-Chunk will conduct Class III gaming pursuant to the gaming compact,” Hoenig says. “Their (Stockbridge-Munsee and Menominee) theory is that because the compact is being violated, the ordinance is being violated.”

Newland expresses frustration at the lack of transparency by the state, Interior and NIGC.

“The BIA and Ho-Chunk are saying, ‘Yes, this is eligible for gaming, but we are not going to share our reasoning for this,’” Newland says. “This gets my rabbit ears up.

“They’re not going to take action on this and they are not going to explain why it is eligible for gaming. It’s unusual for the NIGC and the bureau to make a determination and not share the information.

“Why is everybody being secretive?”

“It is unfortunate the federal government has not shared the reasoning for the conclusion regarding the uninterrupted trust status of the land,” Scott Neitzel, secretary of the Wisconsin Department of Administration, said in a September 27 letter to Stockbridge-Munsee President Shannon Holsey.

“However, the state does not feel that there is a sufficient basis at this time to litigate this question.”

Amendments to the Ho-Chunk compact, Neitzel says, preserve the terms “ancillary” and “gaming facility.” But the distinction under the 2003 amendments “now depends not upon comparative levels of revenue or facility size, but upon the dimensions of the required multi-use development on the parcel.”


Government Funding at Stake

When commercial casinos compete, the shareholders and business partners are the winners and losers. With tribal government casinos, services to tribal citizens are at stake. That’s what contributes to the volatility of gaming in an increasingly competitive Indian casino market.

“Now we have rich tribes and poor tribes,” a tribal lawyer says. “The rich tribes want to stay rich. But if they’re doing it at the expense of the poor tribes, it gets pretty ugly.”

Ho-Chunk is a dominant player among the 11 Wisconsin tribes and the state and local communities, generating millions of dollars in shared revenue and employing some 3,400 workers, most of them not citizens of Ho-Chunk.

“The tribes are all concerned with the destabilizing effect of not enforcing the compact,” Puzz says of the Ho-Chunk situation. “We all depend on gaming revenues to fund our governments. It’s the economic driver of our governments. Any threat to gaming is serious.”

Ho-Chunk contends it is concerned with the welfare of all indigenous people, in and outside the state.

“All we’re trying to do is up the entertainment level at our casino and provide more jobs,” Ho-Chunk spokesman Price says. “Whenever you have 11 federally recognized tribes in the state of Wisconsin, we’re not always going to see eye-to-eye.

“I know a lot of tribal leaders. They’re great people. This doesn’t jeopardize those relationships. They tend to go deeper than one gaming issue.

“Overall, we want to strengthen our working relationship with other tribes,” Price says. “We’re a friend to Indian Country, to the tribes of Wisconsin.”

Dave Palermo is an award-winning metropolitan newspaper reporter. He has written about American Indian governments for more than 20 years, working as an advocate for several tribes and tribal associations. He also has co-authored books on gambling and gambling law. He can be reached at