Casino dispute: Fond du Lac band not required to pay Duluth $10M in back payments

In what the Duluth News Tribune calls "a major victory for the band," a judge ruled Tuesday that the Fond du Lac Band of Lake Superior Chippewa is not required to pay the city of Duluth more than $10 million in back payments.

The dispute is over proceeds from its downtown casino operations.

WDIO explained that the ruling by U.S. District Judge Susan Richard Nelson addresses casino revenue that the city says should have been made from 2009 to 2011. She held that the 1986 Fond-du-Luth Casino revenue-sharing agreement violated the federal law that requires tribes to be the "primary beneficiary" of gambling profits.

Fond du Lac Chairwoman Karen Diver said she was pleased with the ruling. In a written statement Diver said, "The Band continues to hope that the whole matter can be put to rest."

But the ruling is a blow to the city, which had used casino profits as a source for paying for street repairs until 2009, when the band stopped payments. Under the agreement, the band had contributed about $6 million a year. Between 1994 to 2009, the band paid 19 percent of gross revenue, totaling $75 million, to the city.

The city sued, seeking back payments; city officials maintained the band owed more than $13.5 million.

The Northland's News Center added that Judge Nelson originally ruled in favor of the city, but the 8th U.S. Circuit Court of Appeals ruled she should have taken into account the intent of the Indian Gaming Regulatory Act.

Duluth City Attorney Gunnar Johnson indicated the city was "reviewing its options" and would not rule out an appeal.