Massachusetts Tribal Casino in Doubt

The entry by Foxwoods into the gaming license process for a casino at the New Harbor Mall (l.) in Fall River gives the southeastern gaming zone a new face. It also complicates the efforts of the Mashpee Wampanoag tribe to qualify for a license in that zone.

The shape of competition in Massachusetts’s southeastern gaming zone has changed dramatically with the entry into the rivalry by Fall River and Foxwoods.

The Southeastern zone will be the last zone that the Massachusetts Gaming Commission will issue a license for, probably sometime in November of this year.

Although most discount Fall River Mayor Will Flanagan’s sanguine contention that his city’s plans for a $750 million casino resort are virtually a done deal, all would concede that it alters the game considerably.

Last week Flanagan declared that now that the city has obtained an option on 30 acres in its South End, “A casino will be built in Fall River creating thousands of jobs for our residents and generating millions of dollars in revenue for public safety and education. This is a reality!”

The 30 acres is a site currently known as the New Harbour Mall, a mall that has been in decline for several years. The project will probably include about 20 restaurants, a 350-room hotel, retail shops, and an entertainment venue and casino floor.

According to Flanagan, “If we did not take action on this site, we would have been left with a vacant mall in a few years.”

A few days after making the announcement the mayor scheduled a public forum to let the public weigh in on the proposal, especially what the public would like to see included in a host community agreement, such as traffic mitigation and amenities. According to the mayor, “This will center directly on the host agreement. I want to hear directly from the people on what it should be.” One thing that won’t be subject for discussion is another site. The site is set in stone.

Next on any agenda will be hammering out a host community agreement and persuading the public to endorse it in a referendum, which Flanagan said will probably be in June.

Some skeptics, such as regional gaming expert Clyde Barrow of the University of Massachusetts Dartmouth Center for Policy Analysis, point out that Foxwoods has never duplicated its initial success in Connecticut. “They’ve never pulled off a successful project other than the original casino, going back to the early 2000s,” he told South Coast Today, ticking off unsuccessful tries in Philadelphia, Louisiana and the Caribbean and most recently, Milford, Massachusetts. “They’ve never successfully pulled off a project. History is history.”

Another skeptic, Steve Norton, a retired gaming executive also interviewed by South Coast Today, criticized the location. “I don’t know why Foxwoods decided they like Fall River better than New Bedford,” he said. One reason might be that New Bedford’s Mayor Jon Mitchell has occasionally poured cold water on the notion of a casino in his town.

Despite that attitude by the mayor, KG Urban, which wants to build a casino project in the historic whaling town, also threw cold water on the New Falls proposal.  Andrew Stern, a spokesman for KG declared, “It would be nothing short of tragic if we ended up with the Southeast license being issued at a former shopping mall to a company that showed up a few months before the license was issued after losing a referendum in another region.”

The Southeastern zone was originally set aside for the Mashpee Wampanoag tribe, but that was under the stipulation that the tribe meet several conditions, the final of which was to put the land into trust.

When the tribe had still failed to do so by last May the commission opened the zone to commercial bids, while retaining the right to still award the license to the tribe.

A recent announcement by the Department of the Interior has given that goal some new life. The opinion, released earlier this month by Interior Solicitor Hilary Tompkins, discusses how to decide whether tribes were considered to be “under federal recognition” in 1934, the year of the Indian Reorganization Act (IRA). The U.S. Supreme Court in Carcieri v. Salazar ruled in 2009 that a tribe not considered having that recognition cannot put land into trust. This ruling seems to affect most if not all of tribes recognized after 1934, but semantics plays a big part in such discussions. The problem was that the high court did not define exactly what being under federal recognition meant.

The new way of looking at federal trust applications meshes with the Obama administration’s stated goal of putting 500,000 acres into trust by the end of his two terms. The administration is nearly halfway towards that goal.

According to Tomkins, “The test has been applied since I came into office in June 2009. Two parts: One, the tribe must show that it was under federal jurisdiction before and up to 1934. The second prong is simple: Was that jurisdiction approved in the first prong—did it remain intact in 1934? We just have to show that it still existed from pre-1934 to 1934, and it never terminated.”

So far, no tribe has yet been found not to have been under federal jurisdiction, said Tomkins. Mashpee Chairman Cedric Cromwell greeted the news as vindication that his tribe will soon be able to go forward with its proposed $500 million casino in Taunton. Because the tribe was granted federal recognition in 2007, its status vis-à-vis the Supreme Court decision has been considered in limbo by some—although never by the tribe. However, the department’s opinion clarifies that being “under federal jurisdiction,” is not the same thing as being recognized as a tribe by the federal government.

“It’s very exciting and epic the way this is coming out,” Cromwell said. The ruling appears to boost a stance the tribe has taken in its application to the BIA to put the land in Taunton into trust. It argued that its tribe was under federal jurisdiction as of 1934 because its children were sent to federal Indian schools. Tomkins cites this very type of instance in his writing.

“It’s totally consistent with our legal analysis,” Cromwell told Cape Cod Online. “It’s important to set the record straight. It’s what we’ve been saying all along. It’s great that they’ve come out and said this.”

Meanwhile, the Gaming Commission will consider a request by K.G. Urban that the deadline for Phase 2 applications for the Southeastern zone be extended to October 23.

KG was blunt in stating that the challenges faced by the tribe have caused problems for other bidders. “KG’s development efforts have been hindered by certain misconceptions held by the gaming industry concerning the commission’s delay in opening the region to commercial bidders and the likelihood of a tribal casino operating in the region,” said a letter from KG spokesman Barry Gosin.

Cromwell said his tribe wouldn’t comment on that. “We’re focused on what we’re doing,” he told Cape Code Online. “If there were naysayers on the commission, hopefully they’ll see we’ll have land into trust. We’ll have our casino in Taunton. We’ll have our revenue sharing for the state. We hope they understand.”

The BIA is currently reviewing the tribe’s application. Several months ago it issued a Draft Environmental Impact Statement and a Final Environmental Impact State is pending in a few weeks.

The department has agonized over this issue ever since 2009, and some critics wonder why it took so long. According to George Skibine, former Acting Assistant Secretary – Indian Affairs at Interior, “I do think it was important for this legal interpretation to be issued as a formal M-Opinion, because of the deference that courts should give to such an opinion.” He added, “And also because an M-Opinion is binding on all other agencies of the Department of the Interior and on all Interior officials.”

Even with that interpretation, Congress may still need to pass a “Carcieri fix,” to clarify the issue, according Jessica Kershaw, a spokeswoman for Interior. Congress has discussed this issue for several years, without enough support arising in either chamber to make it happen.

The issue is considered one of the most important facing Congress by tribes, and has far reaching consequences. For example, in Connecticut three tribes who have not gotten federal recognition before might get it under the new rules.

The commission last week held a hearing to assess what the impact of the opening of the state’s first casinos might be on the state lottery’s revenues. The idea is to make up for that loss with taxes from the casinos.

Western Casino Zone

The city of Springfield, where the Gaming Commission is likely to issue a casino license to MGM Resorts, could see the casino lead a building boom of as much of $2.5 billion. That’s the message that Springfield’s Chief Development Officer Kevin Kennedy planned to take to a Chamber of Commerce audience this week.

Besides Kennedy, Mayor Domenic J. Sarno was also on the list of regional officials planning to tout the city’s possible golden future. The $800 casino project is likely the largest of the building projects in the works in Springfield.

Commission Lawsuit

Meanwhile, spurned casino developer Caesars Entertainment Inc. turned up the heat in its lawsuit that includes high profile target Stephen Crosby, chairman of the Massachusetts Gaming Commission.

The gaming giant is citing the fact that the owner of the land upon which Steve Wynn hopes to build in Everett once lost money in a company that was owned by Crosby. This was a factor in the commission’s investigators issue a negative assessment of Caesars in its background check. That negative report prompted Caesars erstwhile partner Suffolk Downs to ask Caesars to withdraw its application shortly before the host agreement went to a vote of East Boston and Revere residents in November.

In February Caesars’ attorney Joan Lukey told the judge in the case that the owner of the Everett site, Paul Lohnes, invested in Crosby’s firm and may not have been paid back. This prejudiced Crosby against Caesars, which was in competition with Wynn’s company, said the attorney. Crosby sold the company in 1990.

The information itself is not new, and was in fact taken from a Gaming Commission report, which also noted that the chairman had limited contact over the past quarter century.  According to some legal experts, Caesars wants to make the case the Crosby felt he owned Lohnes because of the loan and that doing what he could to advance the case of the Wynn casino was his way of trying to pay it back.