A U.S. District Court last week ruled that the 2011 Massachusetts law that authorized three casinos in the state and set aside one of them for a federally recognized tribe is constitutional and does not amount to a “racial preference.”
It dismissed a lawsuit brought by KG Urban Enterprises, a New York-based company that wants to build a casino in the historic whaling community of New Bedford. KG asserts that the provision in the state’s gaming expansion law that favors the tribe violates the equal protection clause of the U.S. Constitution. KG says it plans to appeal.
The provision was written into the law specifically with the Mashpee Wampanoag tribe in mind. The 2011 law divides the state into three zones, with the tribe guaranteed a license for the southeastern zone, providing it meets several provisions. The provisions include concluding a tribal state gaming compact that the Bureau of Indian Affairs finds acceptable, which it just did recently, and putting land into trust.
The BIA did not actually approve of the compact, but allowed it to stand through inaction. It did this, it explained last week, because it violates part of the federal law that applies to Indian casino, but not enough for the bureau to reject the agreement.
The compact included a section relating to Class II, which the federal government alone has the authority to regulate.
The landless tribe currently has an application with the BIA to put land in Taunton into trust so that it can build a $500 million casino. However that process is complicated by the U.S. Supreme Court’s Carcieri v. Salazar ruling of 2009 in which the high court said that tribes recognized after 1934 cannot put land into trust. The federal government recognized the Mashpees in 2007. The tribe says it can prove that it has been under federal jurisdiction for many years, centuries in fact, before 1934.
KG Urban might still eventually be given a license to build on New Bedford’s waterfront because the Massachusetts Gaming Commission last spring opened up the southeastern gaming zone to commercial bids. KG is now being vetted for ethical and financial suitability by the commission’s investigative arm. It has until May to reach a host community agreement with the city, whose mayor, Jon Mitchell, has several times publically said he is highly skeptical of a casino in New Bedford. KG would then have until July to schedule a host community vote.
Even though the southeastern zone has been open to commercial bids, the special preference given to the tribe has limited developers interested in pursuing that option, including KG.
Some gaming market experts say it is likely that the commission will eventually be forced to move its deadlines back on the Southeastern zone in order to give more than one company a chance to put together a viable proposal.
One of the architects of the 2011 law says that the ruling vindicates the lawmakers who provided a place for the tribe, which could have gone ahead and gotten permission from the federal government for a casino anyway, and not paid the state a share of its profits. Under that negative scenario the state could have ended up with four, not three, casino resorts. Some studies had shown that three casino resorts is the optimal number for the Bay State, but that four would saturate the market.
Cape Cod Online quoted Senator Stanley Rosenberg, who said, “We were trying to craft a law that would allow for the development of a robust marketplace in view of the fact that a tribe was likely to be recognized and likely to receive land in trust and therefore was a factor to be considered. … I’m pleased the court saw what we were trying to do, and they felt that we found a reasonable balance.”
KG Urban challenged the Expanded Gaming Act the same week that Governor Deval Patrick signed it into law on November 2011. The federal judge, Nathaniel Gorton, initially ruled against KG in 2012, but an appeals court overturned that ruling and sent the issue back to Gorton for a rehearing.
KG said it believes that Gorton did not follow the appeals court ruling and will appeal his second judgment to the First Circuit Court of Appeals.
In another lawsuit concerning the Mashpees, a U.S. District court has postponed a decision on whether voter fraud was committed in the 2009 election that elected the current chairman, Cedric Cromwell. The U.S. government has filed a motion to dismiss the complaint brought by nine members of the tribe.
The tribal leadership will come before the voters on February 9, when four incumbents in the council will face challengers.
