Talks on second Cherokee casino collapse

Tribal leaders and Easley can't agree on how to distribute a share of the profits earmarked for mental health needs

A year of negotiations aimed at allowing Las Vegas-style gambling and a second casino near the state's only existing gambling hall in Cherokee abruptly broke off Tuesday.

A deal between Gov. Mike Easley and the Eastern Band of Cherokee Indians had been in the works for months.

But it fell apart Tuesday, apparently over a disagreement about the use of casino proceeds.

The tribe now operates a video-only casino offering 3,500 slot, video poker and video blackjack games. Harrah's runs the casino, near the Great Smoky Mountains, under a contract with the tribe.

Sherri Johnson, a spokeswoman for Easley, said late Tuesday that "negotiations have stopped because we're unable to come to an agreement."

She would not elaborate.

The tribe's principal chief, Michell Hicks, said in a brief interview that Easley wanted too much.

"He wanted total state control, and we're a sovereign nation," Hicks said.

He said the tribe was exploring "the next steps available to us," which could include legal action.

The tribe wants to add live poker, roulette, craps and other table games as part of an expansion to add jobs and help the state's economy. The tribe says the changes are needed to compete with Atlantic City and Gulf Coast casinos.

The tribe also wants to add a second casino on its lands. It sought other minor changes, such as offering credit to customers and increasing the top prizes it offers.

Easley has permission under state law to grant the tribe's requests, according to the state.

But in the course of the past year, the tribe and the governor could not come to terms.

Draft documents released by Easley's office late Tuesday show that the latest deal under consideration did not include the Las Vegas-style games. But it included the second casino and other items.

Mental health money

Hicks said Easley wanted to direct an estimated $10 million in profits from the second casino to mental health needs in the state.

Hicks said the tribe agreed to that -- and had first suggested that casino money go to mental health concerns.

The draft documents specified that some profits would have been "used solely to meet mental health, developmental disabilities, and substance abuse services needs" across the state.

At the existing casino, some of the profits are funneled to the tribal foundation and then used for a range of educational and economic development efforts in the western part of the state.

Hicks said the tribe wanted the new money to flow from the tribal foundation instead of going directly to the state.