The Gun Lake Tribe has reached a partial settlement agreement with the State of Michigan that is a short-term resolution to a compact dispute that arose from expansion of online sales by the Michigan Lottery and video lottery terminals at social clubs, leading to the tribe witholding revenue sharing payments to the state, according to a tribal news release.
The tribe escrowed the withheld state revenue sharing payments of $21,739,350.52 million. Under the agreement, this sum will be split equally between the tribe and state: 50 percent to the state; 35 percent to the tribe; and 15 percent to GLIMI. The distribution formula will be maintained until the parties reach a final settlement, but the 35 percent to the tribe remains disputed under the terms of the agreement.
The agreement is a partial settlement of the compact dispute and resume’s the flow of revenue sharing funds pursuant to the compact. //
The state’s 50 percent will go to Michigan Economic Development Corporation for economic development programs to create new jobs. The tribe’s 35 percent will be used to create the D.K. Sprague Education Endowment Fund to give financial assistance to both tribal citizens and high school graduates in the local area, instead of the funds going into an escrow fund.
The 15 percent will fund non-gaming economic development under a new business named GLIMI, a subsidiary of the tribe’s Gun Lake Investments that will have both tribe and state oversight.
The tribe and state are committed to reach a permanent settlement by amending the compact, which requires ratification by the federal government, the release said.
“This agreement is a win for all stakeholders due to the substantial benefits provided to tribal citizens, area high school students planning to attend college, and the public at large through economic development programs,” said Chairperson Leah Sprague-Fodor.
“This creative solution to the revenue sharing impasse recognizes the legitimate position of both respective governments, and we applaud the state for negotiating with the tribe to reach this agreement.”
“We appreciate the willingness of the tribe to reach a partial solution on this issue,” said Steve Arwood, CEO of Michigan Economic Development Corporation. “Dedicating a funding source for statewide economic development efforts benefits many communities that will see businesses and jobs grow because of these efforts.”
In 2007 a tribal-state gaming compact established local and state revenue sharing procedures. The tribe is no longer obligated to share revenue with the state if certain state-sanctioned games of chance expand within the tribe’s nine county zone of exclusivity, or the tribe’s state revenue sharing obligation is reduced by 50 percent if certain state-sanctioned games of chance expand anywhere within Michigan’s borders.
In 2015, the tribe began to withhold state revenue sharing payments after the state began offering Michigan Lottery games via the Internet, and authorized certain social clubs to operate electronic gaming devices. The tribe has continued to make local revenue sharing payments which to date total $17,317,691.36. The Gun Lake Casino opened Feb. 10, 2011.