News: CJ Exclusives

Catawbas’ Bid For Off-Reservation Casino Has Precedent

Two other tribes have gained permission for remote gambling operations

The South Carolina-based Catawba Nation would not be the first Indian tribe to operate a casino in a state where it has no reservation if it is able to open an entertainment resort in Cleveland County.

Opponents of the plan, including Gov. Pat McCrory, state Senate leader Phil Berger, R-Rockingham, and House Speaker Thom Tillis, R-Mecklenburg, are skeptical that the tribe can go off reservation to operate a casino legally, let alone claim gambling rights in another state. Similar objections have been raised by Attorney General Roy Cooper and Insurance Commissioner Wayne Goodwin, both Democrats.

But the tribe’s plan to build a $340 million, 220,000-square-foot gaming facility, two hotels, shopping, and entertainment venues, creating more than 4,000 permanent jobs in a high-unemployment area, has precedent.

After a lengthy court battle, the federal government approved a casino project in Kansas City, Kans., for the Wyandotte Nation of Oklahoma because of the tribe’s historical link to the area. The Seneca Nation of New York opened an in-state but off-reservation casino in a litigation-heavy case that has some similar elements to the Catawba project.

Former Interior Secretary Manuel Lujan vigorously supports the Catawbas’ bid, saying it would correct many “historical injustices” the tribe has suffered.

Lujan contends in an Aug. 20, 2013, letter to current Secretary of the Interior Sally Jewell that the tribe’s application to purchase 16 acres of land near Kings Mountain and place it in federal trust must be treated by the federal government as a tribal right. Indian gaming may occur only on land held in federal trust.

“I am writing to encourage you to support and facilitate this mandatory acquisition on an expedited basis, consistent with the Catawba Settlement Act,” Lujan wrote.

Tribal spokeswoman Elizabeth Harris said the tribe’s application to take the Kings Mountain land into trust “is not a gaming application,” but the tribe “has been completely forthcoming” about its intent to “pursue lawful gaming.”

As Interior secretary, Lujan helped broker the Catawbas’ federal land claims settlement in 1993. The settlement compensated the tribe for aboriginal lands that had been seized or settled on centuries earlier and claimed by American pioneers. In exchange, the tribe forfeited claims to those ancestral lands.

That pact allows the tribe to acquire land to be placed in federal trust to expand its 1,006-acre reservation in Rock Hill, S.C., to between 3,600 and 4,200 acres. Cleveland and five other North Carolina border counties are part of the tribe’s federal service area in which expansion purchases may occur.

“It is rare for Congress to statutorily mandate a service area for a tribe,” Lujan conceded in his letter. A service area is a region to which a tribe has a historic connection. “[M]uch of central North Carolina and South Carolina were Catawba lands.”

The “broad intent” of Congress in creating the Catawbas’ service area was to extend an array of benefits to the tribe, the Lujan letter said. Those included access to government services, economic development advantages, and “the right to ask the secretary [of Interior] to take land into trust on a mandatory basis.”

John Rustin, president and executive director of the North Carolina Family Policy Council, contends the Catawbas’ federal settlement “applies only to activities that the tribe would undertake within the state of South Carolina,” and claims to the contrary “are just unfounded.”

Federal benefits in the service area would be programs such as housing, education, and health care — but not gambling, he said.

If the federal government put land into federal trust in North Carolina, “the South Carolina legislature would be the authority governing gambling activities of the tribe within the state of North Carolina, which makes absolutely no sense at all,” Rustin said.

Patricia Zell, former staff director of the Senate Committee on Indian Affairs, and Marie Howard Fabrizio, former staff member of the House Natural Resources Subcommittee on Indian Affairs, disagree.

They helped to work on the Catawbas’ settlement and agree tribal requests for land-into-trust applications to expand the reservation are “mandatory in nature, not discretionary.”

They sent a letter dated Aug. 19, 2013, to Kevin Washburn, assistant secretary of the Interior Department’s Bureau of Indian Affairs, stating that the Catawba Nation “is just as much a North Carolina tribe as it is a South Carolina tribe.”

Zell and Fabrizio wrote that the federal service area in North Carolina “would not be subject to those restrictions imposed by the Catawba Settlement Act that only reference South Carolina.”

McCrory worries about the precedent such an arrangement could present. “It would be a loophole for the whole gaming industry, where they would find islands within our state for casinos to jump borders and form a new island of gaming,” he told Carolina Journal.

Zell and Fabrizio said Congress took steps to address such concerns.

“Our respective committees made it clear that the Catawba Settlement Act was unique and could not serve as a precedent for any other issue in federal Indian law or policy,” they wrote.

Rustin said the Catawbas have sued South Carolina because the state authorizes casino boat gambling but does not allow the tribe to have casino gambling. South Carolina’s casino boats are moored three miles offshore in international waters, so its system is different than land-based gambling, he said.

Samantha Cheek, a spokeswoman for the South Carolina Department of Revenue, said the agency “has not received an application relating to casino operations” from the Catawbas. A bingo hall application was received recently, “but is not complete, and therefore has not been processed.”

Catawba tribal attorney Greg Smith said the state and the tribe “agreed to litigate the tribe’s gaming rights” in view of the casino boat gambling. That case is set for argument Jan. 22 before the South Carolina Supreme Court.

McCrory, Berger, Tillis, and other state lawmakers have raised concerns that the Catawbas’ claim their federal settlement exempts them from Indian Gaming Regulatory Act control. That law generally bars gambling on Indian lands acquired after Oct. 17, 1988.

However, the Wyandotte and Seneca nations previously won lawsuits seeking exceptions to IGRA rules.

Though their reservation is in Oklahoma, the Wyandottes cited historic ties to Kansas City, where ancestral land already had been placed in trust. The government had relocated them to Kansas City from Ohio and Pennsylvania. They were removed forcibly to Oklahoma, but some tribal members remained in Kansas City.

Smith said tribal gaming for the Catawbas would be subject to the U.S. Supreme Court’s analysis in the California v. Cabazon Band of Mission Indians lawsuit, which predated IGRA. The tribe has established a gaming commission to operate independently of the gaming operation management to protect against criminal activity.

Lujan’s letter to the Interior Department may shed light on the IGRA exemption. He wrote that South Carolina and its congressional delegation expressly promised the Catawbas a “monopoly on high-stakes gaming” in South Carolina as part of the federal settlement.

However, he said, South Carolina later reneged, “systematically” eroding the monopoly, initially by outlawing video poker, which had been promised to the Catawbas.

The state then began competing with Indian bingo operations by creating a lottery. It lowered the tax rate on bingo, reducing the Catawbas’ financial advantage “to almost nothing.” And it enacted aggressive gross receipts taxes on Catawba bingo operations so that the state “made more money than the Catawbas” and recouped most of its financial outlay in the federal settlement.

“In the end, it was just another sad travesty of justice for native peoples,” Lujan wrote.

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.