Duluth leaders gain confidence in court battle over casino revenue

By KBJR News 1

May 7, 2014 Updated May 7, 2014 at 10:51 PM CDT

Duluth, MN (NNCNOW.com) --- The legal battle over Fond du Luth casino revenue continues.

Duluth leaders say they are confident moving forward with litigation in light of new revenue sharing agreements cropping up between tribes and municipalities, nationwide.

City leaders feel the Federal Indian Gaming Commission is singling out Duluth.

The longstanding legal battle with the Fond du Luth Casino continues to move forward, however city officials say the tides may be turning…

"The federal government is being arbitrary and not uniform in the way they are treating different situations," said Duluth City Attorney Gunnar Johnson.

The last contract between the Fond Du Lac Band and the City allowed the Casino to operate in Duluth in exchange for 19% of slot machine profits.

However, in 2009 the band stopped paying the city after leaders believed the contract did not comply with the Indian Gaming Regulatory Act.

The Gaming Commission agreed and issued a notice of violation to the city in 2011, for non–compliance.

"There are many, dozens of other agreements just like ours, none of which have gotten an NOV," said Duluth Mayor Don Ness.

City officials have since challenged the ruling in court and say it's being applied inconsistently, as other revenue sharing agreements are popping up with other bands and states that are even more lucrative.

"It can't be applied to certain cases based upon political connections and not on other cases," said Mayor Ness.

For example, Duluth City Attorney Gunnar Johnson says the Mashpee tribe in Massachusetts signed an agreement in January with the federal government that gives 21.5% of gross revenue to the state, and in addition the city of Taunton receives no less than $8 million each year.

"That was approved, and yet we get zero," said Johnson.

In response, Karen Diver, Chairwoman of the Fond du Lac Band of Chippewa, says, "The details of each situation matter. It may not be a similar situation, which would make an unfair comparison. Just because the City feels it bolsters their position, doesn't necessarily make it true."

If the courts reinstate the agreement, Duluth could reclaim nearly $6 million each year, which Johnson says would be used for major city projects like street repair.

City officials say if they lose the battle, they will likely need to increase property taxes or include a street maintenance fee to fund city projects.

Elsa Robins