Peoria Tribe Can’t Fine Casino Management Company $2M: Judge

Posted on: August 7, 2023, 08:16h. 

Last updated on: August 8, 2023, 11:01h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

The Peoria tribe of Oklahoma’s gaming commission can’t levy a fine of $2 million on a casino management company it accused of “unjust enrichment,” a judge has ruled.

Pottawatomie County District Judge John Canavan determined that the gaming commission “lacked jurisdiction” to fine Direct Enterprise Development LLC (DED), which managed the tribe’s Buffalo Run Casino & Resort in Miami, Okla., Tulsa World reports.

In 2019, the tribe sued David Qualls and Tony Holden, joint owners of DED, claiming they had “improperly received management fees in excess of $2 million by way of an accounting process inconsistent with GAAP (generally accepted accounting processes.)”

IGRA Violation

The tribe’s lawsuit came soon after it had been reprimanded by the federal National Indian Gaming Commission (NIGC) for allegedly violating the Indian Gaming Regulation Act (IGRA). That’s because it had “operated under an unapproved amendment to its management agreement with [DED]” without federal approval, according to NIGC.

Under IGRA, net gaming revenue can only be used to fund tribal government and programs, promote economic development, provide for the general welfare of tribal members, or fund charitable organizations or local government. Thus, issues around commercial management companies running tribal casinos are delicate.

The tribe blamed DED and launched a civil suit against Qualls and Holden, accusing them of “embezzlement, unjust enrichment, and deceit.”

The lawsuit claims the tribe was unaware of the violations until it received notice from NIGC in 2017.

‘No Calculation’

The judge dismissed all eight claims against Qualls and Holden and ruled the fine hadn’t been authorized by tribal ordinance or by the commission’s bylaws. That’s because “neither identified any amount of potential fine or method of calculation as required by federal, state or tribal constitutions.”

Based on the failure to specify the amount of potential fines or a method of calculation, the Peoria Tribe Gaming Commission lacked jurisdiction to issue any fine against either defendant, and the unauthorized fines which plaintiff seeks to collect in this action therefore violate due process,” continued Canavan.

Holden told Tulsa World that the litigation had ruined his life.

“I’ve lost everything I own,” he said. “Everything. Home. Marriage. Every dollar. And there’s no recourse because they have sovereign immunity.”

A lawyer for the Peoria, Mike McBride III, said the tribe believes the case was “wrongly decided” and intends to appeal.