Blog Goodwin Gaming March 12, 2013

MA Gaming Commission Turns Focus to Southeast

By Robert Crawford and Eleanor C. Simon

The status of gaming-related activity in Region C, the Southeastern Massachusetts region, is currently up in the air due to a number of different factors, but we could receive answers to at least some of the questions in the coming weeks.

Here is the current state of play.

While the deadline to submit Phase 1 applications to build a commercial resort casino in Region A (Eastern Massachusetts) and Region B (Western Massachusetts) has already passed (learn more about the current field of applicants in those regions here), Region C has been on hold.  The Southeastern Massachusetts region is currently closed to any such commercial applications, but also has not moved forward with any Indian gaming development while the Mashpee Wampanoag Tribe pursues the compact process with the Commonwealth and its land-in-trust application with the federal government.

The Massachusetts Gaming Act imposed a July 31, 2012 deadline for the Governor to negotiate and the Legislature to approve a compact with an Indian tribe for the right to open a tribal casino in Region C.  The Governor and the Tribe signed a compact on July 12, 2012 and the Legislature approved it on July 26, 2012.  However, in a letter dated October 12, 2012, the U.S. Department of the Interior rejected that compact between the Tribe and the Commonwealth because, among other reasons, the Commonwealth’s share of the Tribe’s future gaming revenue (21.5%) was considered too large and undermined a key tenant of the Indian Gaming Regulatory Act: that gaming should primarily benefit the tribe.

The Tribe and the Governor therefore had to negotiate a new compact.  In the last several weeks, both the Governor and Mashpee Wampanoag Tribal Chairman Cedric Cromwell have indicated that the parties are “close” to a new compact and that the new compact would be finalized in the “very near future.”  The parties recently traveled to Washington D.C. to meet with the Bureau of Indian Affairs to discuss the redrafted compact, with the hopes that they will not experience another rejection after its execution.

Any Indian tribe that negotiates a compact with the Governor must also meet the requirements for running a tribal casino under the federal Indian Gaming Regulatory Act (IGRA).  And so, in parallel with the compact process, the Tribe has also been pursuing its land-in-trust application relating to land in Taunton and Mashpee.  The Tribe’s application consists of two parts: (i) the Tribe’s request to acquire land in trust pursuant to Section 5 of the Indian Reorganization Act, and (ii) the Tribe’s request that the lands qualify as the Tribe’s “initial reservation” pursuant to Section 20 of the Indian Gaming Regulatory Act, which is one of the few exceptions to the prohibition of gaming on lands taken into trust after Oct. 17, 1988.

As a prerequisite to building a casino, the federal government must approve both parts of the Tribe’s application.  Last month, the Tribe released a Feb. 7, 2013 letter from Assistant Secretary for Indian Affairs Kevin Washburn, which stated that that the Office of Indian Gaming had completed its review on the “initial reservation” question and had found that the lands will qualify as the Tribe’s “initial reservation” assuming they are acquired in trust and proclaimed a reservation pursuant to Sections 5 and 7 of the Indian Reorganization Act.

However, as part of the land-in-trust process, it needs to be determined whether the federal government even has the authority to take requested lands into trust for the Tribe given the 2009 Supreme Court case Carcieri v. Salazar (holding that the federal government does not have the authority to take land in trust for tribes that were not “under federal jurisdiction” at the time of the Indian Reorganization Act of 1934).  Massachusetts Congressman Edward Markey, a ranking member of the House Committee on Natural Resources, recently introduced a bill, H.R. 666 (commonly referred to as the “Carcieri fix”) to resolve the question of the federal government’s authority to take land in trust.  The bill, which is almost identical to one that was introduced in 2011 but never passed, would amend the Indian Reorganization Act of 1934 to explicitly allow the federal government to take land in trust for tribes like the Mashpee Wampanoag Tribe that received federal recognition after 1934.

So the Tribe still has a long road ahead, including finalizing the compact and having it approved by both the Legislature and the U.S. Department of the Interior, overcoming the Carcieri decision, and completing the land-in-trust process.

Certain private developers, however, are arguing that progress is not being made fast enough and are urging the Massachusetts Gaming Commission to open up the area for commercial applications immediately.  Certain legislators from the Southeastern Massachusetts region are also pushing the Commission to open the area, amid concerns that the region will continue to fall behind other regions in the casino process and will not experience the real economic development at the heart of the Massachusetts Gaming Law.

The Massachusetts Gaming Commission has been closely monitoring the status of the Tribe over the last several months and debating the course forward.  In December 2012, the Commission began discussing the possibility that the Tribe may not meet all the federal and state requirements for running a casino in Region C and debated whether the Commission should request proposals from commercial developers in Region C.  The Commission was originally set a to reevaluate the progress of the Tribe and status of Region C in January, but delayed that decision until mid-March.  During their February 21st meeting, the Commissioners confirmed their intention to revisit Region C and selected their weekly meeting on March 21st, which is the first meeting after the expiration of the extension period, to do so.  The March 21st meeting will be held at Bristol Community College (in Region C) and the Commission has said that they will consider any written comments that are submitted in connection with this issue, and are also currently taking requests from interested parties to speak publicly during that meeting.

Following that meeting on March 21st, we will have a better sense of the future of Region C, although undoubtedly significant questions will remain.  When will a compact with the Tribe be finalized?  Will the compact be approved by the Legislature and the U.S. Department of the Interior?  Will the Commission again delay the decision on how to proceed in Region C to give the Tribe more time?  Or will they decide to open the region to commercial developers?  Will Congressman Markey’s bill pass the House?  Will the Tribe’s land-in-trust application be approved?  Will Region C end up with a licensed commercial developer and an Indian tribe both pursuing gaming in that region? Stay tuned!