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Suit to reclaim Minn. casino money can go ahead

  • Associated Press
  • December 19, 2013 - 4:40 PM

DULUTH, Minn. — A federal judge's decision could allow Duluth to proceed with its attempt to reclaim revenue-sharing payments from the Fond-du-Luth Casino.

U.S. District Judge Colleen Kollar-Kotelly of Washington, D.C., on Wednesday rejected the Department of Justice's motion for the city's lawsuit to be dismissed.

The ruling apparently allows attorneys for Duluth to make their case that the National Indian Gaming Commission wrongly struck down the revenue-sharing agreement.

The Fond du Lac Band of Lake Superior Chippewa, which operates the downtown casino, stopped sharing casino revenue with the city in 2009 after deeming the payments excessive and inappropriate. The band's revenue-sharing payments amounted to nearly $6 million a year for the city.

That assessment was affirmed in July 2011, when the National Indian Gaming Commission issued a notice of violation finding that the payments were not in keeping with the Indian Gaming Regulatory Act. In turn, the band was ordered to cease sharing any casino revenue with the city. Continuing the payments would have run counter to a requirement that the casino be operated for the "sole proprietary interest of the band," according to the commission.

When the city attempted to appeal the determination, the commission said it lacked standing to do so. Duluth was told that only the band could appeal the notice of violation.

"Of course the band didn't want to appeal. They got exactly what they asked for," Duluth City Attorney Gunnar Johnson said.

Band Chairwoman Karen Diver noted that the band is not a party to the litigation.

"The court only determined that the case could proceed," Driver said in an email response to the Duluth News Tribune (http://bit.ly/1bTqUM2 ).

Diver contends that the decision to cut off payments to Duluth was based on careful analysis.

"We believe that the NIGC (National Indian Gaming Commission) would have exercised extraordinary caution and reviewed the legality of its actions before issuing the NOV (Notice of Violation)," she said.

But Johnson, the Duluth city attorney, questioned the objectivity of federal policy makers.

"We don't have the political clout the band does, so we need to seek redress in the courts," Johnson said. "It's a slow and difficult process, but we're going to put our shoulder and our back into this and push forward as hard as we can."

The revenue-sharing agreement once provided Duluth with a 19 percent share of the money that Fond-du-Luth patrons pumped into video games of chance.

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