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June 28, 2005Tribes sued for casino revenuesState: Millions improperly withheldByRecord-Eagle staff writer PETOSKEY - The state filed a lawsuit in federal court against two northern Michigan Indian tribes, alleging they improperly withheld millions in casino revenues promised to the state. Named as defendants in the State of Michigan's suit are the Little Traverse Bay Bands of Odawa Indians, which operates Victories Casino in Petoskey; and the Little River Band of Ottawa Indians, which has a casino in Manistee. Within the last two years, the two tribes quit paying 8 percent of their electronic gambling revenues to state coffers as called for in respective compacts with Michigan. The two tribes' payment to the state in fiscal year 2003, the last complete year of payments, totaled $13 million, according to the lawsuit. Tribal officials said the state broke the agreements when the Michigan Lottery Bureau introduced Club Keno in October 2003, a game played every five minutes in thousands of bars and restaurants statewide. Tribal officials said Club Keno is a commercial casino game, which violates a compact provision that only permitted tribes and non-Indian casinos in Detroit to operate such games. "We believe it would be a violation of the compact agreement for us to make the payment," said Frank Ettawageshik, tribal chairman of the Little Traverse Bay Bands. "We were only to make the payments as long as certain conditions were met. We believe those conditions were changed with the advent of Club Keno," Ettawageshik said. State attorney general Mike Cox, representing the state in the lawsuit, argued in a response to the complaint that Club Keno is an extension of the Keno game the lottery bureau operated at the time the gaming compacts were enacted. The compact provision also does not apply to the lottery bureau because it isn't a for-profit, private enterprise and it doesn't operate a casino, Cox said. The Little River Band's 8 percent payment totaled $7.82 million to the state in fiscal year 2003; and the Little Traverse Bay Bands' payment was $5.35 million for the same time period, with revenues increasing every year, according to the lawsuit. The casino money goes into the Michigan Strategic Fund, the state's leading business development and finance agency. Gov. Jennifer Granholm, in a press conference this month, expressed her displeasure at the impasse, and threatened the lawsuit the state subsequently filed. "It's enormously frustrating because that's our economic development, job-creation arm and we've been hampered by the withholding of those payments," she said. "If it's not going to be resolved amicably ... we're going to take it to court." Ettawageshik said the lawsuit was not unexpected. And Little River Band spokesman Glenn Zaring said the two tribes have worked with state officials on a resolution, and each consented to the federal court's jurisdiction to resolve the dispute. Each tribe has put the withheld gaming proceeds into escrow accounts pending a resolution, Zaring said.
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