White House memo identifies problems with Mass Indian gaming regional set-aside

A 1996 memorandum written for the White House counsel by the U.S. Department of the Interior’s top lawyer shows that any Massachusetts’s carve-out for Indian-only gaming in Southeast Massachusetts, giving acknowledged special treatment to the Wampanoag tribe, would prevent the Commonwealth from receiving federal financial support in the tens of millions from IGRA to the state, impacted local communities and non-profit organizations to mitigate the negative effects of Indian casino gambling. 

Further, this memo spells out that any compact between the Commonwealth and an Indian tribe limited to a specific region of the state, as is the case with the current Massachusetts casino gaming law passed in 2011, would not be approved and that any payment deals between the State and Tribe would be void.  

In this recently released memo, the Department of Interior solicitor John Leshy wrote:

“The proposed Wampanoag compact provides for tribal exclusivity only in the (defined Boston/New Bedford ‘statistical’ areas – SE Mass)… not throughout the State… As a matter of policy, the Department has determined that it will not approve compacts that call for tribal payments in exchange for less than state-wide exclusivity for Indian gaming.  Our rationale has been that anything less than total exclusivity gives the States an effective opportunity to leverage very large payments from the tribes.  Moreover, anything less would require difficult line-drawing judgments to assess the value of particular arrangements to determine whether they are in a tribe’s best interest…”

The Department of the Interior found that anything less than granting an Indian Tribe, like the Mashpee Wampanoag, exclusive state-wide rights to casino gaming would be cause to prevent the State from collecting any fees above the state's minimal costs for regulating the tribe:

“As noted earlier, IGRA disclaims any intent to confer on a State the “authority to impose any tax, fee, charge, or other assessment upon an Indian tribe . . .  to engage in a class III activity.  25 U.S.C.  § 2710(d)(4).  As we have always construed it,  IGRA prohibits  a  compact from obliging a Tribe to pay a State out of  its net gaming revenues more  than the  State's  actual costs of  regulating  the  gaming  activity  authorized by  the compact .   Accordingly,  once   the  State  is  relieved  of  any  obligation to  limit   a  tribe's   competition,   tribal  payments   to  it   beyond  those  necessary to defray the State’s regulatory costs are forbidden by IGRA.  The tribal payment requirement quoted above thus falls before IGRA..."

This findings, of course, would also extend to agreements sought by City Taunton for payments from the Tribe linked to any gaming revenues.  So no $85 million application fee (required of non-Indian casinos) and no annual 40 percent taxes on revenues.