Catawba tribe says NC support not needed for casino project

rrothacker@charlotteobserver.com jfrank@newsobserver.comSeptember 27, 2013 

The Catawba Indian Nation’s proposed casino in Cleveland County is drawing ardent opposition in Raleigh, but the tribe says the games could go on without state support.

Gov. Pat McCrory and more than 100 N.C. House lawmakers are aligned against the project because it would expand gambling and possibly open the door to more casinos.

Attorneys for the South Carolina-based Catawba Nation say a settlement with the federal government and a 26-year-old Supreme Court decision would allow the tribe to offer a wide range of games, if U.S. officials give the necessary approvals. The tribe says it would like to reach a compact with North Carolina to share gaming revenue, but that it’s not a requirement.

“Whether they have a compact or not, they will go forward with gaming,” said Gregory Smith, a Washington lawyer representing the tribe.

But critics of the casino read the law differently – suggesting a protracted legal fight over any proposed gambling by the tribe in North Carolina.

“I’m not aware of any authorization that gives them the authority to establish a gaming operation in North Carolina without going through some sort of process not only with the federal government but the state,” said John Rustin, president of the N.C. Family Policy Council, which opposes expanded gambling.

In the letter they sent this month to U.S. Interior Secretary Sally Jewell, House members argued gambling “is a matter the federal government leaves within the purview of the states.”

Earlier this month, the Catawba Nation, which is based on a reservation near Rock Hill, S.C., filed an application with the U.S. Bureau of Indian Affairs, a first step toward gaining permission to build a casino and resort near Kings Mountain, about 30 miles west of Charlotte. The casino may feature Las Vegas-style games, such as slot machines and table games such as blackjack, known as Class 3 gaming.

The federal agency must take the lands into a trust before gaming can occur on the land. Besides the casino, the South Carolina tribe said it plans to build a hotel, restaurants and retail shops on the 16-acre site.

The Catawbas commissioned an economic study that said the project could bring more than 4,000 permanent jobs to the county, plus additional construction work.

Cleveland County officials are eager for a jobs boost in a county with 10.4 percent unemployment. “We think it’s a game-changer for our area,” said Cleveland County’s interim county manager, David Dear.

‘A Carolinas tribe’

So far, the Catawbas aren’t disclosing the investors and developers that are working with them. But last year, when the tribe filed a lawsuit against South Carolina for blocking plans for a casino in that state, the tribe said its effort was supported by an entity called Sky Boat LLC. The corporation was organized in 2009 as Mercury-Catawba Partners and changed its name to Sky Boat in 2011, according to documents filed with the South Carolina secretary of state.

Republican N.C. Rep. Tim Moore, a Kings Mountain attorney, is representing one of the project’s investors, whom he won’t identify. Moore said in an interview that he told his fellow GOP lawmakers of his conflict and recused himself from any legislative discussion of the issue.

Moore, the chairman of the powerful House Rules Committee, helped the Eastern Band of Cherokee Indians expand gaming in Western North Carolina a year ago, before being retained by the Catawba project partners. He took them as a client this spring, he said.

He disagrees with his colleagues’ recent letter to the federal government opposing the land application, largely on the grounds that the tribe is from out of state. “The Catawbas are a Carolinas tribe,” he added, referring to the North Carolina landmarks in the tribe’s name. “The history of this state clearly indicates their presence in this state.”

He thinks North Carolina should enter a compact with the tribe, saying the state could reap up to $50 million from the venture.

Like the Washington lawyer representing the tribe, Moore said the Catawbas can proceed with plans for a gambling operation without state support. “Since we already have a federally recognized tribe (in the state), under federal law the state has to treat both tribes equally,” Moore said. “If the state does not enter into a compact, the (Catawbas) could still have Class 3 gaming, but the state wouldn’t get any revenue.

“If (the federal government) approves the transfer of land, that in our opinion is the end of the issue,” he added.

Increasingly controversial

When the project was announced, McCrory’s office said the governor “remains unconvinced that any new casino proposal is in the best interest of North Carolina.”

The governor’s office this week did not respond to questions about the casino. A spokesman for the Cherokees also declined to comment.

Steven Light, an expert on Indian gaming, said he isn’t surprised the effort to put land in trust is controversial because it’s seen as a step toward adding gaming. “The politics of Indian gaming has become increasingly controversial over the last decade and it varies by state and tribe,” said Light, co-director of the Institute for the Study of Tribal Gaming Law and Policy at the University of North Dakota law school.

In the 25-year history of Indian gaming, Light said, a tribe has acquired new lands off its reservation only a half dozen times. “This happens very rarely,” he said. The possibility of converting it to use for a casino is not a done deal, he added.

The Catawbas contend they have the law on their side.

Under a 1993 agreement with the government, the tribe is not subject to the 1988 Indian Gaming Regulatory Act. Under that law, the Catawbas would need state approval for Class 3 gaming, which includes casino-style card games.

Instead, the tribe argues its actions should be governed by a 1987 Supreme Court decision that allowed gaming on Indian lands consistent with what’s allowed in the rest of the state.

North Carolina itself has a lottery, has tolerated sweepstakes operations despite a ban against the games and permits Class 3 gaming at the Cherokee casino, Smith, the tribe’s Washington lawyer, noted.

Smith acknowledged that there is likely to be a debate about whether the Catawbas would be allowed to offer Class 3 gaming. But he also noted that under the Indian Regulatory Gaming Act a variety of games, including bingo, are not regulated by the state.

Still, the Catawbas want to reach a compact with the state and have already signaled this intention to McCrory, Smith said. “The Tribe is very committed to working in partnership with the State of North Carolina,” Catawba Nation Chief Bill Harris said in a statement.

The N.C. Family Policy Council reads the settlement to give the Catawba Nation only the ability to gamble in South Carolina, which passed a law codifying the agreement. “It seems to not contemplate at all that the tribe would seek lands to establish a gambling facility outside of South Carolina,” Rustin said.

Rustin’s concerns echo those expressed by McCrory about the precedent of allowing the Catawbas to open an operation in North Carolina, especially with other tribes able to claim ancestral connections to the state. “This could open up a huge loophole and invite any tribe with ancestral history in North Carolina,” Rustin said. “It potentially exposes North Carolina to significant issues in the future.”

The dispute isn’t likely to be settled anytime soon.

It can take six to eight years for a tribe to receive approval to place land in trust because of the long line of applications, Smith said. The Catawbas, however, have faced shorter wait times for land applications because of their settlement, ranging from nine months to two years.

Rothacker: 704-358-5170; Twitter: @rickrothacker

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service