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A crapshoot for Mass.

Congress’s uncertain direction clouds efforts to control number of Indian casinos, cost of licenses

By Casey Ross
Globe Staff / May 26, 2010

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A fight over Indian rights is reemerging as a central issue in the Massachusetts gambling debate, as the uncertain legal status of the Wampanoags is thwarting efforts to control how many casinos get built and how much to charge for the coveted licenses.

The major stumbling block concerns a measure in Congress that would allow tribes to build casinos on so-called sovereign land that would be outside the control of state regulators. The bill is intended to reverse a US Supreme Court ruling last year that blocked some tribes, including those in Massachusetts, from putting land outside their reservations into trust in order to run a casino.

So, for example, if Massachusetts legalizes casino gambling and creates licenses for just two facilities, under the congressional plan an Indian tribe would be able to bypass the state process and open a third casino, as long as it was built on land put into trust and made part of the tribe’s sovereign nation.

That third tribe-run casino, however, would further split the gambling market, making the state licenses less valuable.

But so far Congress remains deadlocked on the issue. That is preventing Massachusetts officials from clearly assessing the tribe’s prospects and deciding how to price the casino licenses being sought by non-Indian gaming concerns.

Gambling opponents warn it would be foolish for Massachusetts to legalize casinos before the matter is resolved.

“There is a lack of full disclosure and understanding by legislators of the impact of Native American gambling,’’ said Kathleen Conley Norbut, president of United to Stop Slots, a coalition of groups opposed to expanding gambling.

“Without performing an economic analysis, they are shirking their basic fiduciary duties as elected officials. Our Legislature needs take a step back and reevaluate the market, the costs, and the impacts.’’

State lawmakers said they are acutely aware of the complexities of Indian gaming and are preparing proposed legislation that assumes the Mashpee Wampanoag tribe will eventually gain the right to operate a casino outside of the state’s control.

“We’re vetting a range of options to deal with this,’’ said state Senator Stanley Rosenberg, an Amherst Democrat in charge of writing his chamber’s version of a gaming bill. “We understand that to ignore this question is to compromise the success of our efforts if we choose to do this.’’

Without being specific, Rosenberg intimated the proposed legislation would allow for the construction of tribal casinos. The Mashpee and Aquinnah Wampanoags on Martha’s Vineyard are the two Massachusetts Indian tribes in a position to build a casino on tribal land, but the Aquinnah tribe previously agreed not to open a casino without state approval.

The Mashpee tribe has lined up a 300-acre site in Fall River and investors to finance a casino. Tribal leaders said they expect Congress will eventually allow them to build a casino on sovereign land in Fall River. Meanwhile, the property has another complication — a state restriction against using it for a casino, which the Wampanoags would need lawmakers to repeal.

For Massachusetts, the tribe’s proposal poses a basic economic problem: The value of casino licenses drop as more casinos enter the mix. If, for example, the Massachusetts gaming market is theoretically worth a $1 billion, then another casino from the tribe would reduce the value of two state-authorized licenses from $500 million apiece to $333 million.

The tribe has said it will apply for a state license. But if it does not get one, it will pursue a casino on sovereign land that would not be subject to state and local laws, if allowed by Congress.

Legislation passed by the Massachusetts House this year would allow slots at the four racetracks and the licensing of two casinos. The House legislation would authorize state officials to negotiate with a tribe about opening a casino.

The confusion over the Wampanoags’ rights stems from a Supreme Court ruling that allowed Indian tribes to put land into trust for economic development. The court held that since the land-in-trust law was adopted in 1934, it applies only to tribes that received US government recognition before its passage.

The ruling blocked any tribe that received its federal designation after 1934 from putting land into trust. The Mashpee Wampanoags received recognition in 2007.

Some powerful opponents have lined up against proposals to reverse the ruling in Congress. Among them is Senate Majority Leader Harry Reid, whose home state of Nevada includes casinos averse to competition from Indian-run facilities. US Representative Barney Frank, a Democrat whose district includes the site of the proposed Fall River casino, flatly said the measure will not pass anytime soon.

“There is a lot of resistance to allowing the tribes to override local laws,’’ he said. “I’ve supported the Indians before, but I don’t think there’s any chance for this.’’

Supporters of Indian gaming concede that legislation is unlikely before this year’s midterm elections. But they argue Congress can’ stay silent on a court ruling that has created confusion over the legal status of scores of projects already built by tribes with post-1934 federal status.

“Billions of dollars of projects have been built on lands in trust, and those investments are now in jeopardy,’’ said US Representative Tom Cole, an Oklahoma Republican and a member of the Chickasaw Nation who is sponsoring the measure.

“It’s incredibly unfair to the tribes,’’ he said.

Casey Ross can be reached at cross@globe.com.

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