Tribal casinos in Indiana?

The Pokagon Band of the Potawatomi Indianas have submitted a land trust application that includes the potential development of a hotel and casino in South Bend similar to another owned and operated by the tribe - the Four Winds casino/resort in New Buffalo, Michigan. Submitted photo

The Pokagon Band of Potawatomi Indians submitted a land-into-trust application to the Bureau of Indian Affairs (BIA) for 166 acres of their land in South Bend, with a plan to build a village that includes a 500-room, 18-story hotel, health clinic, tribal offices, 44 housing units for tribal citizens and possibly a casino. Chairman John P. Warren downplays the gaming aspect, explaining that the tribe was required to state all conceivable development as part of the process, which began more than two years ago.

But state lawmakers were nervous about that possibility—so nervous that Rep. Tom Dermody (R-LaPorte) introduced House Bill 1540, which required the General Assembly to approve any Class III gaming compacts with the tribe.

Legislative approval is not uncommon in other states, but this bill contained language that dictates requirements that must be included in the agreement. Language is also included regarding the management, administration and regulation of gaming (including the types of games operated by the tribe), infrastructure and site improvements.

Warren believes that will inhibit the governor from negotiating in good faith and says much of the language about management and infrastructure violates the Indian Gaming Regulatory Act (IGRA).

On May 8, Gov. Pence let HEA 1540 become law without his signature and left on an eight-day junket to China.

He had evaded requests for an interview for more than a week.

A first for everything

This marks the first time the land-to-trust process has been initiated in Indiana. If approved, the proposed Four Winds for South Bend would be the first Indian casino in this state. The Pokagons have three casinos in Michigan.

The Pokagon Band gained federal recognition through an act of Congress in 1994. The law requires the BIA to place land in trust for the tribe's reservation. Usually, land placed in trust after 1988 cannot be used for gaming, but an exception in Section 20 of the IGRA applies to tribes that were restored to federal recognition.

The IGRA entitles tribes to offer the same types of gaming that are already legal in a state. Riverboat casinos, land casinos and racinos are legal in Indiana.

Pence has often stated his opposition to the expansion of gambling and to human dealers. However, if the state government wants any input in what goes on at this casino, he must enter into a compact with the Pokagons. Many have conjectured that his reluctance stems from the thought that negotiating would signify his approval for the casino.

Because negotiating a Class III gaming compact would also be a first in Indiana, Warren suspects some lawmakers fear it. "You have to realize, of 150 legislators, there's a lot of gaming interests," he told the press.


Taxes, human dealers

and competition

Speculation is rampant that the gaming lobby is influencing legislators. Dermody and Sen. Jim Arnold (D-LaPorte), the bill's cosponsor, hail from a county with a riverboat casino.

Arnold claims he is "simply alerting" the state's existing casinos of an inherent advantage he thinks an Indian casino would have because they would most likely be taxed at a lower rate, although that has yet to be negotiated. Non-Indian casinos in Indiana currently pay 39 to 40 percent in taxes, he estimates. Tribal casinos in Michigan pay six percent.

Money and competition seem to be at the heart of resistance. Sen. Carlin Yoder (R-Middlebury) told members of the Senate Rules Committee that the Indian casino "has the potential to bring harm to the State of Indiana financially" when he introduced Senate Concurrent Resolution 54.

SCR 54 asks Congress to amend Title 25 of the United States Code "to provide that reservations and restored Indian lands within Indiana are not eligible for tribal gaming under the National Indian Gaming Regulatory Act of 1988." In essence, it asked the federal government to grant the state permission to deny the Pokagons a permit for a casino.

The tribe issued a response, calling SCR54 "the latest example of the government of Indiana not understanding the Pokagon Band's tribal sovereignty and the federal government's trust responsibility to Indian nations. The tribe would prefer to move forward by working with state officials on the restoration of Pokagon lands in Indiana."

Some lawmakers bristle over the issue of sovereignty, expressing a sense of betrayal from what they seem to consider a promise broken by the Indians. When the Pokagon Band of the Potawatomi was granted federal status, Yoder said the congressmen who supported them "were led to believe that the Pokagons had no interest in gaming. Unfortunately, months after they became eligible, they immediately started doing so."

According to a WISH-TV report April 23, House Speaker Brian Bosma (R-Indianapolis) said he was told there would be no Indian casino. "It's a real competitive force against our existing state operators, so we're looking at it."

Dermody, who, like Gov. Pence, also declined repeated requests for an interview over the course of two weeks, was quoted in The Times of Northwest Indiana earlier this spring: "We need to do whatever we can, and we know we're limited in making it not so easy, and make them understand that we are concerned about their developing a casino in South Bend."

Last October, Arnold, who likewise was unavailable to respond to NUVO's repeated requests for an interview, was quoted in the same newspaper: "I don't want to say, 'The Indians are coming, the Indians are coming.' But they're coming. We have to be prepared."

Economic impact

Not all government officials are against it. John Voorde, South Bend city clerk, says the South Bend Common Council welcomes the investment. "The Pokagon's multiuse project would create 2,000 jobs. The city wouldn't turn that away."

Directly opposing that view, WNDU reported Yoder as saying, "This is going to cost Indiana dollars. It's going to cost jobs in certain areas, as they transfer over to this, and so this is why I'm bringing this resolution forward."

However, a report by the BIA examined the social, economic and environmental impact of the proposed $48 million project and found that it would increase the number of jobs in St. Joseph County by 2.9 percent: 2,000 employees would work in the casino and hotel, while another 1,470 jobs would be created during the 24-month construction phase. The report projected the net economic impact at $620 million.

The report also anticipates that the facility would draw enough new workers to town to create the need for 350 new homes. According to The South Bend Tribune, the development would provide necessary revenue to sustain the tribal village, which would provide housing and services to as many as 600 Indiana band members. Currently, 500 tribal members reside in the county.

Voorde believes a casino would turn South Bend into a tourist destination. The BIA report estimates that a casino with 3,000 slot machines would attract 4.2 million visitors annually, and that 87.3 percent would originate from outside the county.

Drawbacks to the plan include lost revenue of $36,000 a year because the tribe does not pay property taxes, and some additional strain on the city's water and sewer systems, but Mayor Pete Buttigieg has expressed willingness to work through issues and said "an agreement benefits everyone in the community," according to the Federal Register.

Clearing obstacles

It has passed the first hurdle. The BIA draft study determined that the proposed casino would have no significant environmental impact other than traffic congestion. The tribe expects a final decision from the U.S. Department of the Interior within 10-18 months, although there is no official timeline.

The resolution being sent to Washington is not expected to result in any action because it would require an amendment to the IGRA, changes to the Section 20 regulations issued by the BIA or an amendment to the law that restored the tribe to federal recognition — all unlikely scenarios.