An online lottery dispute between the Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians, also known as the Gun Lake Tribe, and the state of Michigan has led to over $21 million in casino revenues being withheld by the tribe for a year. On Monday, a partial agreement was reached between the tribe and the state, plus the Michigan Economic Development Corp., a group that shares the revenues from the Gun Lake Casino electronic games.
The tribe agreed to give half of the $21.7 million in escrowed monies to Michigan Economic Development Corp. (MEDC), with 35% staying in the tribe’s hands and 15% going towards a new business entity titled GLIMI, which is a subsidiary of Gun Lake Investments. The GLIMI will be a group that focuses on the development of non-casino assets.
Chairwoman for the tribe, Leah Sprague-Fodor, stated that the agreement is a win for all stakeholders as it will provide substantial benefits to tribal citizens, high school students in the area who will attend college as well as the public via economic development programs. The creative solution in regards to the impasse in revenue sharing recognizes the position of both governments and the tribe applauds the state for negotiating to be able to reach the agreement.
The dispute first began when the tribe stopped payments in June of last year to the MEDC. The payments were stopped by the tribe after the group claimed a breach of exclusivity provision in the gaming compact that the tribe held within the state. The provision gave tribes the right to be the only operator of casino gaming within a certain area geographically. In exchange, the tribe pays a portion of their proceeds from electronic gaming to the state since the state does not have the ability to tax the tribes.
When online games were offered by the Michigan Lottery, the Gun Lake Tribe felt this was a violation of the non-compete provision of their compact. The state denies this charge. Due to their beliefs, the tribe then decided to withhold proceeds from the casino until a solution could be reached.
When the tribe decided to withhold funds, the MEDC had to lay off 65 individuals within this fiscal year and corporate revenues for the agency dropped by 47%. The corporate funding for MEDC comes partially from the casino revenues as this is separate monies given to the group apart from the state appropriations that were approved by the Governor of the state as well as legislature.
The tribe as well as the state will now continue to work on a permanent amendment for their gaming compact, which once completed, will have to be approved federally before coming to fruition.