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Wednesday, 23 November 2011 14:24

Cherokee plays hardball with state on casino

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The Eastern Band of Cherokee Indians has agreed to give up 8.5 percent of the gross revenue from new table games if the state will open the doors for live dealers at Harrah’s Cherokee Casino and Resort.

In addition to the live dealers, the tribe wants a guarantee from the state that no other casinos will be allowed to encroach on its territory. The state has agreed in principle — but exactly where to draw the line around Cherokee’s exclusive gaming territory remains a major sticking point.

The tribe and the state have made major strides in working out a deal, however. What was once a wide chasm in their negotiating positions has closed to a mere gap over the past 11 months of talks and correspondence.

“I believe we are on the verge of success,” Cherokee Principal Chief Michell Hicks wrote to the governor’s office earlier this month. “Let us resolve these few remaining concerns in short order. Hundreds of new jobs and much needed revenue for the state depend on it.”

Hicks urged the governor’s office to agree on a deal by this week, in time for the General Assembly to take up the issue. State lawmakers are usually on a prolonged recess this time of year, but returned to Raleigh this week to take up a handful of pressing issues that couldn’t wait until the new year.

An agreement with the tribe is tentatively on the General Assembly’s agenda, should the governor and tribe manage to work out their differences.

 

Where to draw the line

Initially, the tribe agreed to give up 8.5 percent of gross revenue from new table games if the state promised no other casinos would be allowed anywhere in North Carolina.

The state countered that was too big a territory. Cherokee conceded, agreeing it would settle for being the only casino west of I-95. That would satisfy the state’s Lumbee contingency, which hopes to one day get federal recognition as an Indian tribe and potentially open a casino in the eastern part of the state.

But the state again said Cherokee was asking for too much exclusive territory. In the latest counter offer from the tribe, the tribe said it would settle for being the only casino in the western half of the state — determined by the state’s geographic mid-point. But if the tribe had to acquiesce in its quest for exclusive gaming territory, it was no longer willing to give the state an 8.5 percent cut of profits, and instead offered 4.5 percent.

“The portion of our revenue to be shared with the state will depend upon the area of exclusivity provided to the tribe,” Hicks wrote in a letter to the state this month.

The governor’s office replied that it wanted at least 7 percent of the tribe’s revenue, and wanted to limit the tribe’s exclusive casino territory to merely “west of Asheville.”

Gov. Beverly Perdue’s office has more than the tribe to contend with in the gaming negotiations. Perdue and Republican lawmakers are at odds over what the casino money should go toward.

Perdue wants it earmarked for education, namely pre-K education initiatives that saw budget cuts from Republican lawmakers this year. But Republican lawmakers want the Cherokee casino proceeds to simply go into the general budget with no restrictions on their use.

Cherokee has been lobbying the state for more than five years for permission to bring in live dealers with dice and cards and real table games rather than the electronic and video gaming the casino is currently limited to. But negotiations hit a brick wall under former Gov. Mike Easley but were reopened under Gov. Perdue.

The tribe and the governor have bandied offers and counter offers back and forth since January. In one of the most recent exchanges, the state went out of its way to compliment the tribe on the nature of the parley.

“At the outset, I want to express how much we appreciate the cooperative and collegial manner in which we have concluded these negotiations as we work together on these important issues,” Mark Davis, general counsel to the governor, wrote to the tribe’s Attorney General Annette Tarnawsky.

Who has the upper hand at this juncture isn’t clear. Getting live dealers at the casino is critical to the tribe’s financial wellbeing: The Eastern Band has a $633-million expansion to pay for at a time when the recession has taken a toll on casino business.

Meanwhile, the state has budget problems of its own that need solving, and the prospect of a lifeline from Cherokee is coming none to soon.

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