A dispute over casino money between the state of Michigan and two American Indian tribes has landed in federal court.
The state last week sued the Little Traverse Bay Bands of Odawa Indians and the Little River Band of Ottawa Indians, both of which stopped paying 8 percent of their electronic gambling revenues to the state over the past couple of years.
They had been making the payments as called for under compacts with the state. But tribal officials say the state broke the deal when the Michigan Lottery Bureau introduced the Club Keno game in October 2003.
The tribes contend Club Keno is a commercial casino game, despite a compact provision allowing only tribes and non-Indian casinos in Detroit from operating such games.
"We believe it would be a violation of the compact agreement for us to make the payment," Frank Ettawageshik, tribal chairman of the Little Traverse Bay Bands, told the Traverse City Record-Eagle for a story Tuesday. "We were only to make the payments as long as certain conditions were met.
We believe those conditions were changed with the advent of Club Keno."
In the lawsuit, filed in U.S. District Court in Kalamazoo, state Attorney General Mike Cox said Club Keno is an extension of the Keno game the lottery already operated when the compacts were signed.
The compact provision does not apply to the lottery bureau because it isn't a for-profit, private enterprise and does not operate a casino, Cox said.
The Little River Band's 8 percent payment totaled $7.82 million in fiscal year 2003, while the Little Traverse Bay Bands paid $5.35 million, the state's lawsuit said.
The payments went to the Michigan Strategic Fund, an agency that promotes business development.
"It's enormously frustrating because that's our economic development, job-creation arm and we've been hampered by the withholding of those payments," Gov. Jennifer Granholm said earlier this month.
Ettawageshik said the lawsuit was no surprise. Glenn Zaring, spokesman for the Little River Band, said both sides agreed the federal court was the best place to resolve the dispute.
In the meantime, the tribes have put their withheld gaming proceeds into escrow accounts, Zaring said.