Tohono O’odham gamble on big payoff from Glendale casino
Published: November 9, 2010 at 12:21 am
Inside Papago Cafe, in Sells, on Highway 86 between Ajo and Tucson, a small sign is propped up near the cash register. It’s loud and specific, scrawled in black marker on a torn piece of cardboard:
- No Debit Cards
- No Credit Cards
- No Checks
Cash is something members of the Tohono O’odham tribe had hoped would regularly flow their way after the tribe’s venture into Indian gaming, but that hasn’t been the case. Payments have been sporadic and rather small, according to some tribal members, who also expressed concern over how current funds are used.
Now the Tohono O’odham Nation is betting heavily on a proposed $600 million casino/resort in Glendale that has been shrouded in mystery and delayed by lawsuits.
Some 28,000 people live within the Tohono O’odham Nation’s 2.8 million acres that stretch across the Mexico border. The Nation, comparable in size to Connecticut, already has three casinos, the largest of which, the Desert Diamond, opened in October of 1993 off Highway 19, south of Tucson.
In Sells, the Nation’s capital, people like Rudy Hodahkwen, the 63-year-old owner of the Papago Café, go on with their daily lives independent of the casinos. Seventeen years ago he paid $55,000 for and $30,000 to repair the small bungalow that became Papago Café. He lives out back in a trailer with his wife of 36 years, Lucy, a part-time preacher who also works at the restaurant.
Hodahkwen wants to expand his cafe, add about 20 more tables, allowing him to add four or five staffers to a group that, including him, Lucy and their grandson, Mark Manuel, totals eight. Manuel, 22, has worked at the restaurant half his life. He is Tohono O’odham and eligible to receive a share of casino revenues. Hodahkwen, despite living and working in Tohono O’odham Nation, the third-largest reservation in the United States, is a full-blooded Onondaga, from upstate New York, which makes him ineligible.
But he still is in a unique position to evaluate the impact of tribal casinos.
“I’ve been to 126 different reservations,” he said. “And all of them, the mentality of the people in the end? Pretty much the same.”
To him, Indian gaming mostly has helped tribes.
“There’s still a lot of poverty on the reservations,” he adds, “but it really turned the tide for all the Indian nations that have casinos—coast to coast.”
President Ronald Reagan signed the federal Indian Gaming Regulatory Act into law in 1988. One stipulation of the bill was that it required states to negotiate fairly with tribes that wanted to build casinos.
In Arizona, 15 tribes operate 23 casinos, and six other tribes lease at least some of their gaming allocations to tribes with the proper facilities. From fiscal year 2004 to 2009—tribes were not required to report revenues to the Arizona Department of Gaming before then—Arizona received more than half a billion dollars from the tribes. The current Arizona Tribal-State Gaming Compact requires that tribes return a certain percentage of their winnings to the state, and most of that money goes toward education, emergency services, tourism and wildlife funds. Tribes give back 1 percent of their first $25 million, 3 percent of the next $50 million, 6 percent of the next $25 million and 8 percent of anything in excess of $100 million. They pay no other taxes on casino income.
Hodahkwen said the Tribal Council should do more to promote businesses and education on the reservation. He’s frustrated that children who earn all A’s and B’s at the local schools can’t read or do simple math.
And he wishes that tribes would have been able to keep more for members and the community: “Most of the problem is with the state and not the [federal] government. The state wanted a piece of the pie, and the Indians said, ‘You didn’t want to help us all those years, and we’re sovereign, so why should we give you anything?’ But they had to make some sacrifices, so they gave the state a little bit. Unfortunately, that caused a lot of bad feelings.”
He draws parallels from his life as a businessman to the Nation’s plight.
“I’m a workin’ owner,” Hodahkwen said. “I work my butt off. When you take a piece of the pie, and everything’s paid out from that, and I get what’s left, I look at what’s left and ask, ‘Is that piece enough? Am I satisfied with that?’”
For the first time in three years, Hodahkwen raised his prices. Eggs and bacon cost more. Utilities cost more.
“That piece of the pie I’m talking about, it kept shrinking,” he continued. “I said, ‘Well, it can’t go any lower. There’s just no way.’”
The Tohono O’odham Tribal Council also seeks a larger slice of a very significant pie. It announced in January 2009 it would build an immense, $600 million casino-resort on a 134-acre piece of land near Northern and 91st avenues in Glendale. The tribe quietly purchased that parcel in 2003, via a holding company in Seattle, as part of a 1986 agreement in which the U.S. Congress agreed to give the Tohono O’odham $30 million to buy additional land because a federal dam flooded part of their reservation in southern Arizona.
The Bureau of Indian Affairs, part of the U.S. Department of the Interior, kept delaying its decision to take the parcel of land into trust—meaning it could become a reservation—until late July, when it decided in favor of the the Tohono O’odham, which, to expedite the process, had sued the BIA in federal court in March.
Glendale officials are furious. Both U.S. Sens. John McCain and Jon Kyl and Gov. Jan Brewer, who lives in Glendale, are against the idea, as are other Arizona tribes, especially the Gila River, who operate the Vee Quiva casino on 51st Avenue and Baseline Road, roughly 15 miles from the proposed Glendale site. (Leaders of the Gila River and Tohono O’odham tribes both ignored repeated requests to be interviewed for this story.)
After the BIA announced it would take the land into trust, Glendale and Gila River sued.
“The people making the decision about where that reservation would go and what it would look like have absolutely no concern whatsoever, and no interest in, what it does to the local community,” said Craig Tindall, the city attorney for Glendale. “The U.S. Constitution says if you’re going to create a federal enclave in a state, take jurisdiction away on a parcel of land, you have to have approval of the [state] legislature to do this. The legislature hasn’t approved it.”
And the Arizona Legislature isn’t back in session until January, which puts Glendale and Gila River at a disadvantage, Tindall said, adding that the BIA wrongly ignored that a casino is planned to be built on this new parcel.
“Both lawsuits,” meaning Glendale’s and Gila River’s, Tindall said, “say that the BIA can’t separate taking the land into a trust and a gaming decision.”
Arizona Federal District Court Judge David Campbell is expected to rule on the latest lawsuits by mid-January.
“But,” Tindall said, “whoever loses will appeal.”
Whatever the outcome and wherever the tribe’s next casino is built, Manuel, Hodahkwen’s grandson, wants to know how much of the revenue will make it back to the reservation. And will the stipend checks that are supposed to be delivered every two years actually reach him on time?
“It would be good,” he said, “if our people get something out of it. We’ve only gotten like four checks, for $2,000 each, while other tribes are getting a check a month because of their casino. The other tribes, in Casa Grande and all that, they get checks like every two or three months, for more than $2,000. I don’t think it’s fair.”
Manuel, who has two young daughters, said he’d really like the casino revenue, old or new, to be used to build more parks for children too young for school and not old enough to fully enjoy the local recreation center.
“If I really saw it going to the community like that, I’d probably say that,” said Manuel, when asked whether he’d prefer a larger stipend check or a smaller check but with more money directly invested in the community. “It would be good to have things for our kids and our future kids—and for us as adults. If it comes down to it, cut down our pay, but at least give it to us instead of having us wait for like once every three years.”
Should the Tohono O’odham’s plan be approved, the new casino likely would be the highest grossing in the state.
But how much would it cost? Tindall argues that Glendale is significantly more concerned with social capital than financial capital.
“At the end of the day,” Tindall said, “if you added up all the numbers and everybody benefitted financially from this—it was the biggest coup you ever saw—and yet it had a severe social impact on the community, then that outweighs any of the economics.”
The Tohono O’odham bought the disputed land parcel in 2003, Tindall said, through Rainier Resources, a corporation with a Seattle address that’s actually based in Delaware, and the property manager in Seattle “had no connection whatsoever” to the tribe.
“So they (the tribe) hold the land that way for six years,” Tindall said. “In the meantime, you have an arena that opens up, you have a stadium that opens up, you have a high school that opens up across the street, you have communities—very significant communities—developing, you have businesses relocating there, and within two miles of that site, you have about 32,000 households.”
Nearly one-third of the people living within two miles of the proposed site, Tindall added, are younger than 20.
“You have a young, developing community out there that they (the tribe) allowed to develop while they held this land in secret, waiting to spring their plan, to develop a reservation with a casino on it,” Tindall said.
Glendale claims on the city’s official website that because any casino would have to be built on land that allows the tribe to maintain its sovereignty, Glendale could be on the hook for up to $3.5 million annually in public-safety costs. Police officials from both Scottsdale and Chandler, which border several of the state’s largest tribal casinos, including the recently renovated and reopened Talking Stick Resort and Wild Horse Pass, respectively, have said there’s been no statistical evidence of any increase in crime since the gaming facilities were built.
Tindall said he’s also worried about a history of questionable policing by the Tohono O’odham.
“Here’s the scenario: They have 134 acres surrounded by the city of Glendale,” Tindall explained. “Now, if they’re a sovereign nation and they say, ‘We’re going to take care of ourselves in here, we’re going to police them,’ well, their chairman has been to D.C. complaining about how their lands are overrun with crime and they’re unable to police them. They have 42 officers on the street for a reservation the size of Connecticut. I’m not saying anything the tribal chairman hasn’t said to Congress. The Department of Justice went and studied their police force and was amazed how bad it was.”
Tohono O’odham Chairman Ned Norris has spoken to Congress several times about the tribe’s acquiring more federal aid in fighting illegal immigration, drug smuggling and people smuggling, on which the tribe spends several million dollars a year. But Norris does not want to build a fence through reservation land along the tribe’s 75-mile border.
“We found,” Norris told the U.S. House Committee on Homeland Security April 1, 2009, “that information sharing at the federal level is fragmented. As a result, this hampers our efforts to develop information and intelligence sharing with our federal partners, specifically Department of Homeland Security agencies Custom and Border Protection and Immigration and Customs Enforcement.”
But securing the new casino land wouldn’t be enough, Tindall added.
“And as soon as people step off that land into our jurisdiction, we have to deal with them. Whatever condition they are in, when they come off that land, it’s up to us,” he said.
And the city potentially could be held liable for enormous lawsuits, such as if there’s a fire at the new resort and Glendale firefighters respond as part of a joint-operating agreement.
“If four people die, and you have a $50 million lawsuit, which isn’t unheard of because of those deaths, and (family members) assert negligence, with indemnification agreements you pretty much know who’s going to defend whom,” Tindall said. “If we’re responding in another city, and we have indemnification from them, they’re going to defend it because we did them a service. If a tribe asserts sovereign immunity, if they’re faced with a lawsuit for $50 million, they may well write us a check for $10,000 to cover the costs of being there, but the $50 million thing, you’re on your own because you can’t enforce that in a court of law.”
In addition to any potential threats to Glendale, other tribes, Tindall argued, should be worried. Even though the Tohono O’odham’s latest venture would be built on reservation land, because it appears to be inside a metropolitan area, it could begin a push by gaming advocates for the state legislature to allow “racinos”—slot machines at racetracks—that would invoke a poison-pill provision in the gaming compact, effectively nullifying tribes’ monopolies. With gaming allowed anywhere and by anyone, the smaller, rural tribes that lease their rights to gaming machines to larger tribes with viable casinos would see them devalued if not rendered worthless.
“There’s obviously a big budget crisis right now in Arizona, and there’s a special-interest group that believes the state should consider expanding gaming to areas like horsetracks and dogtracks,” said Rick Medina, policy and communications manager for the Arizona Department of Gaming. “The big argument against that right now is that the voter-approved initiatives in 2002 were designed to limit gaming and to keep gaming on tribal lands away from the metropolitan areas. If this casino were to be built in Glendale that could undermine the major argument against the spread of casino gaming off reservations.”
Hypothetically, Medina said, Turf Paradise, the Phoenix racetrack, or a gaming conglomerate like Harrah’s then could offer the state $100 million up front for a gaming license and promise to return 50 percent of its revenues. The tribes couldn’t compete.
“I think there’s a perception that the tribes want the poison pill, so they could have as many gaming devices as they want,” Medina said. “But, ultimately, I believe most of those people are very knowledgeable, and they realize that would not be to their advantage.”
Tribes are limited to no more than 1,089 gaming devices in a single casino, and the total number allotted each tribe is based on state population figures—not the size of specific tribes. The Tohono O’odham currently operate three casinos—they’re allowed up to four—and 2,055 of 2,686 devices, which includes its maximum allotment as well as the maximum number the tribe is allowed to lease from smaller tribes.
Dan Quigley, general counsel for Tohono O’odham gaming, said the tribe likely would relocate a number of slot machines from one of its two larger locations near Tucson to the West Valley.
“The market will clearly bear the maximum number of gaming devices, so we’d be likely to put the maximum in there, which would be 1,089,” Quigley said, adding that the new casino also would have 30 to 40 table games, roughly one-third of the maximum number allowed.
Eddie Brown, the director of the Native American Studies Program at Arizona State University, who is enrolled in the Pasqua Yaqui tribe, sits on the Tohono O’odham gaming board and has worked much of his life on improving the relationship between tribes and the federal government. He doesn’t gamble for religious reasons. He said he preferred not to speak directly for the tribe—“It’s not appropriate”—but he certainly has his own views on the tribe’s dispute.
“We’ve had to fight for everything we’ve got,” Brown said. “We’ve had to push the envelope every time and show legally how we did things. If we backed off at every point of turn, we wouldn’t be in existence. We’d be another ethnic group here trying to figure out how we get our share of taxpayers’ money, so to speak.”
Glendale recently claimed that roughly one-third of 134 acres purchased by the Tohono O’odham, a section that bisects the proposed casino site, actually was annexed by the city years ago. Brown said the fight with Glendale reminds him of the tribes’ battling for water rights throughout the last century.
“Clearly,” Brown added, “it’s economics and political power. It always has been, from the minute people came in here as the first settlers of Arizona. They laid claim to land and water with very little recognition of the tribes’ rights. When they put those dams up, they never asked the tribe. When they dammed the river, the Salt and Verde river, they dramatically changed the lives of American Indians here. Never a question asked: What would be the impact on them?”
Tribal governments and state and federal governments need to work together instead of against each other, Brown added. He said what Glendale fears most—jurisdictional issues stemming from a sovereign nation within another—already affect the Ak-Chin tribe in the Southeast Valley.
“This is a game we’re playing,” Brown said, “and it’s only going to increase between tribal land and Arizona cities and towns and counties. It’s already to the point where Ak-Chin is fully surrounded. They woke up one morning, and because growth was so dramatic out in Maricopa, they are literally surrounded by other cities and county developments. The tribe is now saying, ‘Gee, how are we going to survive? We can’t get in and out of our community without going in and out of another jurisdiction.’”
In hindsight, Brown said, perhaps Tohono O’odham Tribal Chairman Norris—who, via a public-relations firm, declined repeated requests to be interviewed for this story—should have told Glendale sooner of the tribe’s plans. But the tribe wasn’t required to. And it never broke any laws.
“That’s something that’s constantly brought up—‘They bought [the land] in secret,’” Brown said. “I know that upsets people. It would bother me as well. But do other businesses deal like that? Yes. It’s a common practice for a business to purchase land.”
It’s also common for new businesses to generate jobs. Building the casino would employ more than 6,000 construction workers, and more than 3,000 permanent jobs would result. The tribe’s pro-casino website—westvalleyopportunity.com—claims the facility will pump $300 million into the state economy every year. An entire section of the site is dedicated to illustrating how much gaming money the Tohono O’odham have contributed to local governments, charities and nonprofits.
There is no mention anywhere of how much gaming money the Tohono O’odham have given back to the Tohono O’odham.