Indiana Lawmakers Approve Pokagon Compact, State’s First Tribal Gaming Deal

Posted on: April 21, 2021, 02:53h. 

Last updated on: July 7, 2021, 01:06h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The Indiana legislature on Monday ratified the state’s first Native American gaming compact. The agreement was signed between the Pokagon Band of Potawatomi Indians and Indiana Gov. Eric Holcomb (R).

Pokagon
Pokagon Band members in traditional ceremonial dress at the tribe’s annual powwow at the Michigan reservation. (Image: Crazy Cow Trading Post)

The agreement marks the transformation of the tribe’s South Bend Four Winds Casino into a full-fledged Class III gaming operation.

Previously, the casino could only offer electronic bingo-style games, albeit sophisticated ones dressed-up-like slots. Now, it will share revenues from bona fide slots, blackjack, roulette, and sports betting with the state.

Despite its name, Indiana has no federally recognized tribes. Under federal law, the designation is a precursor for Class III gaming. The Pokagon Band is based in southwest Michigan but counts an area of Northern Indiana as part of its ancestral homelands.

Historical Homelands

The tribe gained federal recognition through an act of Congress in 1994, which established its sovereign reservation in Michigan. The legislation also authorized the Interior Department to place land into trust for the tribe in certain counties in Indiana because of its historical ties to the area.

The 166-acre plot in South Bend was approved by the Interior Department’s Bureau of Indian Affairs in November 2016, preparing the ground for a Class II casino, whether the state liked it or not.

Now, with the state’s blessing, its only tribal casino can offer the same games as the commercial casino market while sharing a lower percentage of revenues. Indiana’s 13 commercial casinos pay a 25 percent tax on their gross gaming revenues.

Under the terms of the compact, the tribe will share 10 percent of its slots revenue with the state and local government. The compact is set to run for 20 years, with renewals every 10 years after that.

A first in Indiana’s history, this compact was executed in accordance with state law and federal law and obligations and recognizes the sovereign rights of both the State of Indiana and the Pokagon Band,” said Sarah Tait of the Indiana Gaming Commission in a statement.

“It demonstrates the value of our ongoing government-to-government relationship and the commitment of each party to fulfill their responsibilities to their citizens while working cooperatively to comply with all applicable laws.

Curbs Commercial Expansion

In return for its cut, Indiana will agree to prohibit new competition from emerging across most of its northern and northwestern regions.

This limits expansion by existing casinos in Hammond, East Chicago, Gary, and Michigan City. These properties will be barred from relocating inland, as the casino that’s soon to reopen as the Hard Rock in Gary has been permitted to do.

The tribe operates three casinos in Michigan and has plans to expand the Indiana facility with a new 23-story tower hotel that will include 317 rooms, plus a spa, convention center, a ballroom, and a rooftop pool.