The management firm that helped California’s Chukchansi tribe reopen its Chukchansi Gold Resort & Casino at the end of 2015 after it had been closed for more than a year has sued the tribe, claiming that it owes the firm million.
The lawsuit, filed in U.S. District Court by Osceola Blackwood Ivory Gaming Group, alleges fraud, breach of contract, negligence and various business and professional code violations. It seeks punitive damages from the tribe and the Chukchansi Economic Development Authority.
The suit alleges that the tribe promised in the summer of 2015 to pay Osceola 30 percent of net revenues for seven years, but later broke the agreement.
The casino had been closed for a year due to infighting among various factions of the tribe, which led to an armed encounter that caused state and federal authorities to order the casino shuttered. The tribe worked for more than a year to reopen the casino.
Besides helping the tribe reopen the casino, Osceola also assisted in negotiating a settlement with the National Indian Gaming Commission (NIGC) and helped obtain funding to reopen the casino and hotel.
Some months after the casino reopened a new council was elected that decided to scrap the agreement, the suit alleges. It changed the contract from a seven to a five-year agreement and cut the 30 percent to 25 percent.
The complaint says that the tribe agreed to waive its sovereign immunity against lawsuit. It alleges that the $21 million is the amount Osceola would have made had the agreement gone forward and been submitted to the NIGC for approval.
“The complaint filed in court is a necessary step in our repeated efforts to make certain the tribe honors their end of the parties’ agreements,” said a representative of Osceola. “We are hopeful this matter will be resolved quickly.”
John Peebles, attorney for the tribe, commented, “We don’t think that the complaint has any merit whatsoever. You can mark my words the evidence that will be presented in this matter will be substantially different from what is alleged in this complaint.”
