The hard-luck cities along the state’s South Coast are used to being on the losing side of casino wrangling. The region was repeatedly steamrolled when Beacon Hill leadership demanded that legislators oppose gambling, and the new era of legalized gambling has been no kinder. Lawmakers sold gambling as a jobs creator, but in the state’s southeastern region, Beacon Hill has tied casino jobs to the vagaries of a legally dubious Indian gaming regime. As a result, the region with the state’s highest unemployment rate, and with the greatest appetite for a casino, is getting left behind.
Last week, federal officials rejected the gambling compact Governor Deval Patrick negotiated with the Mashpee Wampanoag tribe, saying the compact would have taxed tribal gambling revenues at an excessive rate. It’s a sign of things to come. Massachusetts built its casino deal with the Mashpee on magical thinking. The compact, an agreement setting the terms for tribal gambling in the state, is the easy part, and Beacon Hill couldn’t even pull that off.
The hard part will come when the state and the tribe try to put a renegotiated compact into action, since it is based on federal officials taking actions they have no power to take. It’s a sign of how badly the state has misjudged the tribal gambling landscape that it managed to stumble even before hitting this inevitable wall.
The Mashpee are one of Massachusetts’ two federally recognized Indian tribes, and the only one with a plausible claim at gambling rights. The compact is a government-to-government agreement allowing the Mashpee, who have been a sovereign nation since receiving federal recognition in 2007, to operate a casino on tribal land.
Last year’s casino law gave the Mashpee a head start at establishing a casino in southeastern Massachusetts. Signing the compact all but guaranteed the Mashpee one of the state’s three regional casino licenses, without the tribe having to bid against commercial casino developers. The Mashpee are now pursuing a $500 million casino complex on 146 acres in Taunton.
The Mashpee have no means of opening a tribal casino. No tribe in their position does.
But on Friday, the Department of the Interior’s Bureau of Indian Affairs rejected the compact, saying that the 21.5 percent tax rate that Patrick and the Mashpee agreed to far exceeds what other tribes pay their host states. Commercial casino operators in Massachusetts will pay a 25 percent tax on their gambling revenues.
Patrick greeted the feds’ compact rejection by firing a shot at Washington: “The market, not Interior, sets the value of gaming,” he said in a statement. The Mashpee should be taxed more than any tribe in the country, the governor reasons, because they and their financial backers stand to make more in Taunton than other tribes may make. This is a telling reaction, because it relies on a fantastic suspension of disbelief about how the federal tribal gambling law actually works.
States cannot tax tribal casinos, which operate on sovereign land. The Department of the Interior allows tribal and state governments to negotiate compacts providing the states with a cut of the tribes’ gambling take, but only in return for meaningful concessions from the states. The Mashpee compact protected the tribe from commercial casino competition in southeastern Massachusetts, but the feds ruled this exclusivity wasn’t worth such a rich cut of the Mashpee gambling revenue. This shouldn’t have come as a surprise, as the Department of the Interior had rejected less lucrative compacts. Beacon Hill’s cut of the Mashpee gambling revenue looked like it was going to be problematic, but the state pushed ahead anyway.
The Mashpee compact now comes back to the state for renegotiation. But the episode is symptomatic of a greater blindness in the state’s approach to casinos. Even if the Department of the Interior signs off on a gambling compact, the federal government has no authority to convert the Mashpee property in Taunton to tribal land. A 2009 Supreme Court decision suspended the Department of the Interior’s ability to take reservation land for recently recognized tribes like the Mashpee. The Mashpee have no means of opening a tribal casino. No tribe in their position does. No one in the State House has been able to articulate a way around this dead end, because there isn’t one in sight. So while commercial casino developers line up for licenses to open up in Boston and Springfield, the state goes back to work with the Mashpee, hammering out another compact establishing a tax rate on gambling revenue that can’t legally materialize.