The Oklahoma-based Quapaw Tribe recently announced the National Indian Gaming Commission has granted it permission to expand its Downstream Casino Resort into southeast Kansas. The NIGC ruled the tribe’s land in Cherokee County, Kansas, located in a part of its original 1833 reservation,
meets a statutory exception, ranking the tribe as one of the few in the nation whose historic reservations spanned more than one state.
Quapaw Chairman John Berrey said, “This federal opinion means that we can now go for it, and we will be the first to build and operate a casino in southeast Kansas. We will seek a state compact on the same terms as other federally recognized tribes with game-able land in Kansas, but we’re commencing work immediately and we plan to be open for business in 2015.”
In 2013 the Kansas Attorney General wrote a letter disapproving the Quapaw’s planned expansion. It stated although the Quapaw Tribe may own federal land in Southeast Kansas, state regulations still apply. It noted the tribe’s application to the state to put Southeast Kansas land into a trust for Quapaw was a “non-gaming” application. According to the AG’s Office, the Quapaw Tribe told the Kansas government the land would be for a parking lot and agricultural purposes. In addition, the attorney general’s office wrote since Quapaw’s government offices are in Oklahoma, and Quapaw would not be allowed to move its government offices to Kansas, the site of Quapaw’s expansion does not qualify for gaming.
But based on the NIGC ruling, tribal officials said they will move forward. “There’s an economic benefit for them getting a compact with me. There’s a revenue share that comes with it,” says Berrey. The Downstream expansion needs permission from the state of Kansas for Class III gaming, which includes roulette and craps, and is unconstitutional in Oklahoma. “There’s no reason not to expect that I can’t get a compact” with Kansas, Berrey said.
The Quapaw’s Kansas property currently serves as the Downstream’s main parking lot. The $5 million, 40,000 square foot expansion will cross the state line between Kansas and Oklahoma and connect with the existing Downstream building. It will include 162 electronic gaming machines, plus a cigar lounge and nightclub on the upper level, and provide about 25 new full-time positions.
The Downstream also will complete several other property expansions for a total development investment of about $400 million.
Last year an independent study indicated the Downstream had an economic impact of more than $225 million a year since it opened in July 2008. In the past five years the Downstream has created more than 1,640 permanent jobs with total annual workers’ earnings of more than $58 million. Currently it employs 1,100 workers.
Also in Oklahoma, just weeks before resigning, U.S. Senator Tom Coburn blasted hundreds of billions of dollars in federal tax giveaways, including those to Indian casinos. Coburn’s report stated “powerful special interests and Washington politicians have turned the tax code into a complicated mess that rewards only a few at the expense of middle-class taxpayers. The tax code should treat everybody the same and everybody should participate.”
Coburn cited the Chickasaw Nation as an example of a special-interest group that pays no taxes on earnings. “In 2011, the Chickasaw Nation earned over $1.27 billion in revenue from its 17 gaming operations, including the Riverwind Casino in Norman, Oklahoma, and the sprawling WinStar World Casino on the Oklahoma-Texas border, the largest casino in Oklahoma as measured by gaming floor space. The tribe paid no federal corporate income taxes on this income,” Coburn’s report said.
In response, Chickasaw Nation Governor Bill Anoatubby said, “Obviously, the quoted revenue figure was not net income. Our records indicate the Chickasaw Nation’s audited net income in 2011 was $358 million. Perhaps more importantly, tribal governments, just like state and other local governments, do not pay taxes on government revenues. Chickasaw Nation net revenues go directly to the provision of tribal health, education, housing, food and other government programs and services as well as roads, water and wastewater infrastructure, and other community investments, which benefit all citizens of our state. Through our compacts with the State of Oklahoma, we have contributed hundreds of millions of dollars to Oklahoma’s general fund over the past decade.”
