The Fond du Lac Band of Lake Superior Chippewa and the city of Duluth have eventually put an end to a long-standing dispute after seven years of court-battling regarding the terms of a new revenue-sharing compact.
The tribe manages Fond-Du-Luth Casino in downtown Duluth. Established back in the late 1980s, it has become the first full-scale gambling venue not only in the city but also in the state of Minnesota as a whole. Under the original gambling agreement between Duluth officials and Fond du Lac, the latter was to share a portion of the revenue generated by the casino for a 50-year period.
To be more precise, the tribe was to annually pay 19% of a particular type of casino revenue for the first 25 years of their contract. A new percentage was to be negotiated for the second 25-year period.
As a result from the original agreement, Fond du Lac contributed more than $6 million to the city’s coffers. However, the tribe stopped its annual payment in 2009, claiming that it deserved to keep more of the revenue generated by its own casino.
Following that decision, Duluth officials brought the matter to court. The National Indian Gaming Commission was also involved in the dispute, stating that the original deal was in breach of federal law, under which Indian tribes should be the ones to benefit the most from tribal casinos.
Under the agreement reached just recently, Duluth would annually receive $150,000 for various services the city provides. The payment is very similar to the tax other businesses pay. In exchange for that, the city has promised to withdraw its litigation and court appeals.
In addition, the tribe has agreed to adhere to Duluth’s planning and zoning framework, despite the fact that its casino is located on sovereign land placed in federal trust, and under federal law, it is not required to stick to such frameworks. If Fond du Lac decides to add a hotel or any such facility to its existing casino, it will make additional payment to the city.
The new contract is valid for the next 10 years and is to be renegotiated for 10 more years. The deal was formalized by the Duluth City Council on Friday, June 10. Tribal officials approved it a few days earlier.
