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Governor approves Catawba gaming compact

While vertical construction has not yet started, the Catawba broke ground on the  project in July. Brittany Randolph/The Shelby Star photo While vertical construction has not yet started, the Catawba broke ground on the project in July. Brittany Randolph/The Shelby Star photo

The Catawba Nation of South Carolina cleared an important hurdle in its quest to open a casino in Kings Mountain when Gov. Roy Cooper signed off Jan. 22 on a gaming compact that will allow the tribe to offer live table gaming and sports betting on the 16.57-acre property just outside Charlotte. 

“On behalf of the Catawba Nation, I sincerely thank Governor Roy Cooper and his team for their thoughtful collaboration in creating this compact, which is the key step in bringing economic benefits and thousands of jobs from our casino project to the citizens of North Carolina,” Catawba Chief Bill Harris said in a press release.

The Catawba have been striving for years to see a casino built on the site, with economic impact plans released in 2013 estimating that the planned 220,000-square-foot facility would employ 3,000 people and wield an annual economic impact of $349 million to the Cleveland County area. The casino would also provide an influx of cash to the Catawba, whose people suffer from high unemployment and low household income compared to North and South Carolina overall. 

However, a Catawba casino in Kings Mountain would have serious financial implications for the Eastern Band of Cherokee Indians and by extension the overall economy of Western North Carolina, of which Harrah’s Cherokee Casinos is a major driver. Principal Chief Richard Sneed has said repeatedly that the Kings Mountain casino could siphon away $100 million in annual business from the tribe’s casinos in Cherokee and Murphy by capturing customers who live closer to the Charlotte area than to Cherokee lands. 

The Cherokee also oppose the casino project on legal grounds, alleging in a lawsuit now before the U.S. District Court in Washington, D.C., that the U.S. Department of Interior’s March 12, 2020, decision to take the Kings Mountain property into trust for the Catawba was “rushed,” “flawed” and “violates the plain language of federal law.” 

The EBCI argues that the DOI ignored and violated numerous laws and rules that explicitly prohibit such action when issuing its decision. Taking land into trust that is across state lines and not connected to existing reservation land is an action that is without precedent and contrary to law, the tribe has said, among other legal arguments. The EBCI alleges that casino developer Wallace Cheves, who the lawsuit refers to as “a casino operative with a history of criminal and civil enforcement actions against him and his companies for illegal gambling,” influenced the DOI to reverse a long-held position against approving land-into-trust applications like the Catawba’s.

In December 2020, Judge James Boasberg granted a request from the EBCI to expedite oral arguments in the matter, and that hearing is expected to take place in February. 

“The proposed Kings Mountain casino was born of an illegal act and has continued to swirl in controversy and unethical behavior,” Sneed said in a statement reacting to news of the gaming compact’s approval. “It’s disappointing to hear that the Governor felt compelled to sign an agreement that furthers this scheme and threatens the integrity of Tribal gaming everywhere. But this compact changes nothing. We continue to believe the courts will affirm the illegality of this casino and when that happens, the Catawba agreement will be nothing more than a worthless piece of paper.”

The compact still requires approval from the DOI to become effective, but a press release from the Catawba states that “it is not anticipated that this compact will pose any special difficulties, as it is closely modeled after a compact that Interior has approved for another tribal nation” — that is, the EBCI. 

The compact, good for 30 years, outlines various terms related to revenue-sharing and governance for the operation of the planned casino. Without such a compact, the tribe would have been relegated to offering Class I and Class II gaming options such as bingo and lotto, as was the case for the EBCI during its first 15 years as a casino operator. 

The compact grants the Catawba exclusive gaming rights within the boundaries of Ashe, Avery, Burke, Catawba, Cleveland, McDowell, Mitchell, Rutherford, Watauga and Yancey counties, stating that, should anyone other than the Catawba be permitted to offer live table gaming in this geographic area, the state would forfeit its right to a portion of the gaming revenue. The compact states that the Catawba may operate up to three Class III gaming facilities on its tribal lands.

The Catawba will have to give the state 5 percent of its gross revenue from live table gaming through Aug. 12, 2022, with the share increasing incrementally up to a maximum of 8 percent on Aug. 12, 2032. It’s a similar plan to that outlined in the Eastern Band of Cherokee Indians’ 2012 agreement with the state, which began with a 4 percent share and increased 1 percent every five years until reaching 8 percent in 2032 and remaining there until the agreement’s expiration in 2042. 

The compact also requires the Catawba to pay $191,000 per year to defray the state’s cost associated with sports betting — the same amount the state is charging the EBCI — and to transfer money into a foundation each year that will benefit Native Americans and the local community, beginning at $1 million annually and eventually increasing to $7.5 million. 

Additionally, the property is expected to generate millions in state tax revenues, and the Catawba have agreed to make payments in lieu of taxes to Cleveland County despite the fact that the casino would be built on tribal trust land and therefore exempt from local property taxes, the tribe’s press release said. 

Despite ongoing litigation, the Catawba intend to move forward with construction and aim to open an “introductory casino gaming facility” this fall. The tribe held an official groundbreaking in July, but thus far the work has been limited to site preparation. 

In August, the Catawba announced that the casino would be named Catawba Two Kings Casino Resort, a name intended to honor 18th-century Catawba Chief King Hagler and the City of Kings Mountain. At the same private event where the name was revealed, the tribe also presented the logo, which depicts a silhouette of King Hagler set against a representation of Kings Mountain. 

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