Casino rising?

In an effort to bring casino-style gambling to the outskirts of Alaska’s largest city, the Native Village of Eklutna is suing the Department of the Interior, and the state of Alaska can’t decide whether or not to intervene in a case with implications far beyond games of chance.

The lawsuit comes on the heels of a June 2018 ruling by Interior that a Native allotment near Birchwood belonging to Olga Ondolla “does not constitute Indian Lands within the meaning of the Indian Regulatory Gaming Act.”

Ekltuna village has contracted to lease the land from Ondola in hopes of opening a gaming business along the route of the busy Glenn Highway from Anchorage to Wasilla.

“We are aware of this matter and its potential implications to the state, and are looking into it,” Department of Law spokeswoman Cori Mills emailed Monday. “At this time, we have not made a decision on the state’s involvement.”

The only gambling allowed in the state at this time is pull-tubs and traditional bingo. Various Native groups have over the years eyed gambling as a financial opportunity but there is a lack of tribal land on which to build casinos.

Across the rest of the country, the American Gaming Association estimated the more than 485 Indian gaming establishments now operating in 28 states comprise a nearly $100 billion-per-year business generating nearly $16 billion in taxes for federal, state and local governments. 

The suit filed earlier this month in the federal U.S. District Court in the nation’s capital claims that political meddling in the Interior is blocking expansion to Alaska.

Interior, it charges, “relied on outdated legal precedent and misapplied the relevant standards regarding tribal authority over allotments. On information and belief, the decision was also influenced by improper political considerations. For these and other reasons, the decision was arbitrary and capricious and contrary to law in violation of the Administrative Procedure Act.”

The Alaska difference

The suit has broad, land-use implications beyond a possible casino along the Parks. It would set a precedent for the establishment of “Indian country” in the 49th state. Some Alaska Native rights activists have long hoped to use Indian country to move Native-corporation lands back under Interior control and create defacto reservations.

Forty-eight years ago, the U.S. government abandoned the reservation model and negotiated a settlement to aboriginal claims to ownership of the state with the first of its kind Alaska Native Claims Settlement Act (ANCSA). The act created 12 regional Native corporations within the state and approximately 170 village corporations, seeded them with nearly $1 billion and their choice of 44 million acres of land, and left the state’s Native peoples to determine their own economic future.

Carl Marrs – the former chief executive of the highly successful, Anchorage-based, Cook Inlet Region Inc. (CIRI) – has called ANCSA “the first real settlement between Native Americans and the federal government in which Natives were allowed to exercise self-determination.”

“While many people say this act was an experiment in capitalism on a grand scale,’ he wrote at Cultural Survival in 2003, “it is important to stress that the designers of the experiment were Alaska’s indigenous people. What they sought—and achieved—was an act of self-determination.”

Marrs was later sacked as the head of CIRI. He is now CEO of the Old Harbor Native Corporation on Kodiak Island and director of the Native American Contractors Association, which assists Alaska Native corporations involved in the highly lucrative business of contracting for the federal government. 

A 2016 General Accounting Office report found 344 Alaska Native-owned businesses, which get preferential “8A” bidding status with the federal government, doing about $4 billion of business per year with the government.

Alaska Business magazine last June described the various Alaska Native businesses as “Homegrown Powerhouses” and estimated annual earnings at near $10.5 billion or “more than 70 percent of the $14.8 billion in revenue from Alaska-owned business.”

But ANCSA has not benefited all Natives equally. Many remain poor, and most of the poor live in remote, isolated, jobless villages where their greatest desire is for control of the surrounding lands and waters upon which they feel other Alaskans sometimes infringe.

The Obama administration was moving toward putting some corporation lands into federal trusts as part of the move toward a reservation-style system, but the Trump administration put an end to that plan. 

Indian country

Creating Indian-Country nations within the state has been opposed by a variety of Alaska governors, but then-Attorney General Jahna Lindemuth in 2017 suggested she and her boss, Gov. Bill Walker, were inclined to expand tribal authority.

Both are now gone. Walker withdrew from the 2018 governor’s with a media firestorm brewing in the wake of his dismissal from office of Lt. Gov. Byron Mallott, an Alaska Native. Mallott was reported to have made “inappropriate overtures” to a woman. It has never been made clear what Mallott did that might have precipitated his being ordered to resign.

Walker maintained his silence on the details of the affair even as it was blowing up into such a mess he concluded there was no hope of winning re-election and withdrew.

New Gov. Mike Dunleavy’s view of “Indian Country,” and that of his AG – Kevin Clarkson – are not clear, apparently not even to the state’s Department of Law as the statement from Mills made obvious.

A string of past governors have tried to waffle their way through the controversy by on the one hand claiming their support for the “Native rights” movement and on the other trying to avoid Balkanizing the state with the potential for more than 220 tribes to own a sovereign piece of real estate.

Unlike in the Lower 48 where tribes are generally comprised of old Indian nations such as the Sioux, Iroquis, Cree and the like, 229 small, Alaska villages have been recognized as tribes. They make the state home to more than 40 percent of all federally recognized tribes.

“This lawsuit has been coming for almost 40 years and is just the most recent end-game outcome of the state’s (during the administrations of both Democratic and Republican governors) and the congressional delegation’s politically pusillanimous acceptance of the Native sovereignty movement’s bogus legal assertions regarding tribal status,” Anchorage attorney Don Mitchell said Monday.

A former legal counsel to the Alaska Federation of Natives, Mitchell was heavily involved in helping guide Native policy in the wake of the passage of ANCSA. The act was seen at the time as a noble move away from the failed reservation system of the lower 48 that would give Alaska Natives the opportunity to forge their own economic future.

Less thought was given to the reality that with the chance for opportunity comes the risk of failure. ANCSA has not helped all Alaska Natives and some have thus gone looking for alternatives.

Eklutna’s predicament

The Ekltuna suit portrays the tribe as a long-time victim of Anchorage’s growth into the state’s largest urban area. More than half of Alaska’s population of about 750,000 people now lives in an Anchorage Metro area stretching from the shores of Cook Inlet to the foothills of the Alaska Range.

The tribe in 1959 “protested” to the federal government that it owned 470,000 acres of land around its village north of Anchorage, the suit says, but it failed to gain title. Two years later, the late George Ondola, then chairman of the Village Council, helped his mother file for a Native land allotment near Birchwood.

“She wanted to protect the tribe’s land base from further losses and believed that securing the allotment would help achieve that objective for the Eklutna people,” the suit says. The allotment was granted in 1963 and the Ondolas took up residence on the land.

ANCSA in 1971 “recognized Eklutna’s status as a Native Village and included it on the list of villages eligible to receive land selections as part of the settlement of aboriginal title claims,” the suit notes.

Today, Eklutna Inc. is the largest landowner in the Municipality of Anchorage. It controls 90,000 acres with another 67,000 acres yet to be conveyed, and its 170 shareholders are served by a corporation that “manages a variety of investments, including commercial properties and residential developments,” according to the Eklutna website. 

None of that, however, affects tribal control over pre-ANCSA lands, the suit argues. Despite the changes brought by the Act, the tribe continued to function and in 1988 it wrote a constitution containing a provision that solidified its “jurisdiction of the land and
waters constituting Indian Country of the Eklutna Tribe as defined by federal law.”

Native allotments in the Eklutna area were a specific part of that claim.

“It is understood within the Eklutna community that the Ondola allotment is
subject to tribal authority. The Ondola family has historically been a part of the Eklutna
community and has both recognized and submitted to the jurisdiction of the Tribe. The Ondolas reaffirmed this in the lease agreement between the family and the tribe for the gaming project,” the suit says.

The suit goes to great length to document the connections between the Ondolas and tribe, and the tribe and the Ondolas. It also notes the tribe established the Eklutna Gaming Authority in 2006, wrote regulations for governing Class I and Class II gaming, and in 2016 asked Interior for “confirmation that the site where [it] proposes to conduct gaming, the Ondola Allotment, qualifies as ‘Indian lands’ pursuant to the Indian Gaming Regulatory Act,” the suit says, adding that “under general principles of Indian law, allotments—whether held in trust or under a restricted deed—have long been recognized as ‘Indian country.'”

Class II Indian gaming is legally limited to bingo-style games, but the bingo games that have developed at Indian gambling establishments are not much like what most people think of as bingo.

“In Indian casinos…they can only offer games based on bingo,” observes Slot Machines Online. “So whether you realize it or not, if you’re playing slot machines in an Indian casino, you’re actually playing bingo.”

Credit progress with this change.

“Advanced technology has now propelled bingo to a newer and much more sophisticated level of play. Being able to display the results of a standard bingo game on a video screen,
an electronic wheel, or a mechanical reel, coupled with audio effects, bingo today plays head to head with the most advanced Class III games in the industry,” Jerry Danforth, the  former Chairman of the Oneida Indian Nation of Wisconsin noted almost a decade ago. “There are a number of examples where Indian tribes have built a dynasty on the
bedrock of Class II gaming.”

The Eklutna request to start gaming stayed stuck in Interior for all of 2017 with the agency unsure of how to handle it. The Alaska Congressional delegation was repeatedly consulted.

“On multiple occasions, Department staff made comments suggesting that the
outcome of the Tribe’s request might depend on political considerations,” the suit says.

Finally, in June of last year, Interior set Eklutna a letter saying it had concluded the Ondola property did not meet the definition of “Indian lands” under the terms of the gaming act.

The suit says Interior erred in assessing the facts in the case, ignored changes in policy, allowed itself to be influenced by politics and in the end made a decision that “is arbitrary, capricious and contrary to law.”

Time will tell if a judge agrees.

Correction: An early version of this story mischaracterized Don Mitchell’s involvement with ANCSA and mislabeled the Glenn Highway.









11 replies »

  1. Hey Craig: Though the State of Alaska may not allow it, in Juneau the land has been cleared and prepared for the construction of a native owned casino already. The George family of Angoon traded native allotment land in Hood Bay to the Forest Service a few years back. In return they received land on Douglas Island (up the Eaglecrest ski area road) that is exempt from Juneau and State control and are proceeding with plans to build a casino. The land owners and the City/Borough of Juneau have been very quiet about plans and subsequent effect of such an establishment. I’m guessing State liquor laws are also circumvented.

  2. Thanks for the article, Craig.
    In my understanding, all Alaskan tribes even now are sovereign entities — even without their lands in trust. Thus in their business endeavors they have immunity from suit for breach of contract and for personal injury. Tribal businesses often sign “waivers of immunity” if they wish to contract.
    Post ANCSA only the Craig tribe has f.t.t. land (fee to trust). The Walker Administration did not oppose their application for f.t.t. land. Although AG Clarkson has written an opinion strongly opposing f.t.t. in Alaska, Governor Dunleavy appears to have “no opinion” on the issue. Strange.
    Of course Metlakatla has had f.t.t. for decades and evidently runs a casino-like business with the bingo slots.
    Tribes in Juneau, Ninilchik and Fort Yukon have made applications to BIA for f.t.t.
    Once fee-owned tribal land is accepted into federal trust it is called Indian country. The state then loses much of its authority; the state can no longer tax OR regulate tribal activity on the land. Gambling, marijuana, tourist shops, grocery stores, etc, etc, can be regulated and taxed by the tribe and, I think, can be taxed by the federal government…certainly not by the state.
    Eklutna land is owned, I presume, by the Village Corporation and the subsurface is owned by Cook Inlet Regional, or CIRI.
    But we are talking here about an allotment, held in federal trust rather than in fee ownership—unless it has been transferred to fee ownership which does occasionally happen. I believe a longstanding legal argument exists about whether Native allotments are “Indian country”.

  3. Yeah, we really need casinos so the 30+% of our population that is on welfare has another way to piss away money.

    • I was actually thinking it would give all the retired “old farts” something to do with their state pensions but we all know if it does not degrade the environment in some way then the Banana Republic government is not for it.

      • I am kind of thinking that a casino would leave the same footprint as drilling in ANWR. At least the state would make some money off ANWR, unlike a casino. Guess those evil drilling corporations aren’t so bad after all?

  4. This is just wanting to have the best of both worlds. If they want Indian country they need to forfeit everything that was granted under ANCSA and all profits derived from everything that was granted, then they can be granted Indian country and all the wonders that come from it. Please note that as a whole Indian country is in much worse shape than those under ANCSA.

  5. casinos are a voluntary tax on stupidity. I hope they never come to Alaska. We already have enough stupidity.

  6. @Bryan, those are brave words for someone living on stolen land. It’s Reparations. You sound like a victim.

  7. Tribes are Tax Exempt. Gaming on Native American lands earned $26.5 billion in 2011. 236 Native American tribes operate 422 facilities across 28 states. Yet Native American tribes and their wholly owned tribal corporations are not subject to federal income taxes on their earnings.

    The Exemption is Absolute. Some types of tax-exempt organizations are taxed on some types of income. Tribes are exempt from federal income taxes even when conducting commercial activities. They can form corporations to conduct business and their income remains exempt.

    Maybe things have changed over the years. Doubt it though.

  8. Reminds me of Elizabeth Warren, or should I say ​”Fauxcahontas Casino.” just another fraud, entitlement, welfare scam. Reperations!! Victims, victims, victims, everybody is a victim.

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