Judge rules tribe doesn't have to share casino revenue with city of Duluth

Two years ago the Fond du Lac tribe stopped sharing casino revenue with the city of Duluth, arguing their contract violated the federal Indian Gaming Regulatory Act. That prompted the city to sue, and on Monday a district court judge ruled in the tribe's favor. The ruling will likely mean millions of dollars more in annual revenue for the tribe, and that much less for the city of Duluth.

Author:: BMTN Staff
Updated:: Mar 8, 2018
Original:: Nov 22, 2011

Two years ago the Fond du Lac tribe stopped sharing casino revenue with the city of Duluth, arguing their contract violated the federal Indian Gaming Regulatory Act. That prompted the city to sue, and on Monday a district court judge ruled in the tribe's favor. The ruling will likely mean millions of dollars more in annual revenue for the tribe, and that much less for the city of Duluth.

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Both sides are filing appeals after a judge declared that the band does not need to share profits from its Fond-du-Luth casino with the city of Duluth. But the band, which declared victory in the case, wants to reverse a decision that would still require it to pay $14 million in back payments to the city. The band stopped making the payments in 2009, which sparked the legal battle.

A federal judge ruled the Fond-du-Lac Ojibwe Band no longer needs to share revenue from its casino with the city. The city has appealed the decision and now is apparently threatening to shut down the casino if the ruling stands. Mayor Don Ness tells Minnesota Public Radio the casino can't operate without the city's written consent.

Duluth Mayor Don Ness says he still wants to find agreement with the Fond du Lac band so both sides benefit from the tribe's downtown casino. The city received a letter from the U.S. Dept. of the Interior giving a 10-day deadline for the city to explain why the casino lease shouldn't be voided. The city and the tribe are locked in a revenue sharing legal dispute.

The agreement with the Fond du Lac Band of Lake Superior Chippewa provided the city with 19 percent of all revenue from electronic gaming. An ongoing legal fight began when the tribe stopped making payments in 2009. The Duluth News Tribune reports federal authorities have deemed portions of the contract invalid. Mayor Don Ness says the Interior Department is "using the power of the federal government to be an advocate for the band at the expense of the citizens of Duluth."

The mayor of Duluth tells the Star Tribune the city is in serious financial trouble after the federal government sided with the Fond du Lac band in a legal tussle over casino revenue. The newspaper says some of the proposals to expand gambling in Minnesota could put the state on a similar collision course with tribes, which fear state gambling would cut into revenue that they say has helped alleviate crushing poverty on reservations.

The Bureau of Indian Affairs is seeking comment on a plan to raze the historic Carter Hotel, the Duluth News Tribune reports. The Fond du Lac Band of Lake Superior Chippewa bought the property in December 2010 and wants to tear it down. The city of Duluth has suggested several ways to reuse the 83-year-old building, but the tribe claims it is "in an extraordinary state of disrepair."

Duluth maintains the band needs city approval before expanding its reservation at Fond du Luth casino to include an adjacent hotel. The city attorney says a St. Louis County judge dismissed the lawsuit because a federal court is a better venue for it.

Duluth claims the tribe breached its contract with the city. The News Tribune reports the band is seeking federal authority to expand its downtown gaming activities to include a former hotel without obtaining approval from the city.

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