The Minnesota Supreme Court recently overruled a lower court decision and said the city of Duluth and the Fond du Lac Band of the Lake Superior Chippewa must continue their legal battle regarding the casino’s plan to expand in federal court. The state’s high court said “We lack jurisdiction over this dispute,” in which Duluth sued in St. Louis County District Court to stop the tribe from expanding its trust lands to include the old Carter Hotel it had purchased next to its Fond-du-Luth casino in downtown Duluth. The tribe would not have to pay taxes on that property if it is taken into trust.
Fond du Lac Chairwoman Karen Diver said the tribe “continues to hope that all of the city’s litigation will be resolved” so all sides can move on to “a more positive course.” Duluth City Attorney Gunnar Johnson said the court’s ruling “clarifies the venue question that some very smart legal minds have differed on.”
From 1994 to 2009 the Fond-du-Luth casino generated $75 million in revenue for the city based on a revenue-sharing agreement. But in 2009 the tribe quit making the $6 million annual payments. The city objected, claiming the funds were necessary for infrastructure repair and to pay for additional security associated with the d casino. Johnson said, “To be zeroed out is extremely disappointing and puts the city in a very difficult situation. The city has really been struggling to keep its revenues up.”
Although the National Indian Gaming Commission ruled in2 011 that the original revenue-sharing agreement violated federal law, Duluth sued for the lost revenue. Last year, a federal judge ordered the tribe to pay $10.4 million in back payments to the city, but said it would not have to make any future payments.
Meanwhile, just one month since the debut of online sales for instant scratch-off Minnesota Lottery tickets, state lawmakers from both parties want to end the venture. Senate leaders and Senate and House tax committee chairs are furious that lottery officials introduced the games without their approval, so they want to add a sentence changing state law to stop the internet sales.
Senate Majority Leader Tom Bakk, a Democrat with two casinos in his northern Minnesota district, said, “Gambling should be a destination event. It shouldn’t be something that is spontaneous. I don’t believe anyone ever though that on their phone they could buy a lottery ticket. I don’t think that’s what voters voted for.”
Republican Senate Minority Leader David Hann said, “It really pushes the boundaries of what the law allows. There needs to be some restraint brought to this. I don’t want to have a guy in the lottery office over there wondering how much more he can get away with.”
“The guy in the lottery office,” Lottery Director Ed Van Petten, said he has been meeting with lawmakers to soothe their concerns, noting that the e-scratch games were designed to attract younger players and that they match what customers already buy in other forms. In addition, Van Petten said several safeguards are in place: weekly electronic purchases are capped at $50 per player; software verifies a player’s age; and players must use a pre-registered bank account and be located within Minnesota.
“I do firmly believe that when people this intelligent see the truth about how this thing operates and not just hearing the fears people have, I think it will become less of an issue. There are people who just don’t like gaming,” Van Petten said.
In its first month, electronic lottery ticket sales generated $1,000 to $3,000 a day, Van Petten said, compared to $1 million in tickets sold per day at gas stations, convenience stores and other physical locations.
