House Votes to Block Arizona Indian Casino Obama Approves

The U.S. House of Representatives yesterday voted to block an Indian casino project in Phoenix, Arizona, even as the Obama administration and state and federal courts have given it the green light.

The Tohono O’odham Nation, which has a reservation the geographic size of Connecticut near Tucson, plans to build a 225,000-square-foot gaming facility not far from the Cardinals’ football stadium in the suburb of Glendale.

Representative Trent Franks, an Arizona Republican who sponsored the legislation, said in an interview that the tribe “operated in bad faith” by pursuing the project.

The bill goes to the Senate where it faces an uncertain future in a chamber consumed with debates over federal spending, the looming debt limit increase and approving a replacement for Ben S. Bernanke as chairman of the Federal Reserve. While no one openly opposes the legislation, a similar measure that the House passed in June 2012 died in the Senate for lack of action.

Arizona Senator Jeff Flake, a Republican, backed the last iteration of the Franks bill when he was a representative. Flake spokeswoman Bronwyn Lance Chester didn’t respond to an e-mail requesting comment. Brian Rogers, a spokesman for Arizona Republican Senator John McCain, also didn’t reply to an e-mail yesterday.

Anti-Poverty Effort

The Tohono fight was featured in a Bloomberg News story yesterday on President Barack Obama’s moves to help tribes pull themselves out of poverty through gaming revenue -- a $27 billion market about the size of the commercial casino industry that includes Las Vegas and Atlantic City.

Obama has overturned rules restricting gambling that were instituted by President George W. Bush, including limits on how far from a tribe’s traditional homeland it can build a casino.

Obama’s campaign and Democratic allies collected $2.5 million from tribal governments for his re-election last year, compared with less than $500,000 that went to Republican challenger Mitt Romney and aligned Republican parties, according to the Center for Responsive Politics in Washington.

“Obama is trying to gain favor with tribal entities,” Franks said. “They seem to believe that all of the negatives associated with gambling are subordinate to the political advantage that they believe it brings them by approving these projects.”

Betting Facilities

Arizona’s 23 casinos, by state law, are owned by Indian tribes. The Tohono Indians have three betting facilities outside Tucson. In 2002, the state’s Indian gaming agreements came up for voter review and it was approved that November.

Nine months later, in August 2003, the Tohono incorporated a company in Delaware, called Rainier Resources Inc., and bought 135 acres of land near Glendale. To make the purchase, the tribe used part of a $30 million federal settlement to replace their land damaged by a dam built in 1960 by the U.S. Army Corps of Engineers. That federal action, in 1986, identified unincorporated areas of Maricopa County as an acceptable place for the tribe to acquire replacement land.

The tribe remained idle for the next five years and didn’t share its plans with the city of Glendale, which during that time built a high school directly across the street from the would-be casino site.

Eight days after Obama was inaugurated in 2009, the tribe filed an application with the U.S. Department of the Interior to take the Glendale-area land into trust -- a necessary step before building the casino.

1,100 Slots

The proposed resort would have 400 hotel rooms, 1,100 slot machines and 68 table games and poker tables.

“It made good business sense for us to do it the way we did,” said Ned Norris Jr., Tohono’s chairman. He said the tribe used a company with a different name to purchase the land to avoid unfair price markups, not to hide its ownership. And he said the Tohono waited until Obama took office because it took years for the tribe to internally approve the casino plans.

Taken by surprise, Glendale and Arizona elected officials protested. So, too, did the Gila River Indian Community and Salt River Pima-Maricopa Indian Community -- tribes with casino projects near Phoenix.

Tohono’s opponents have pursued state and federal lawsuits, and judges have ruled against them nine times, saying state and local opposition doesn’t preclude the tribe from adding the land to its reservation. Both sides have racked up millions of dollars in legal and lobbying fees, and spent millions more trying to elect friendlier politicians.

The Interior Department has given its initial approval for the Tohono’s application to take the Glendale area land into trust. Franks’s legislation, if it passes the Senate, would have to be signed by Obama to become law. The Interior Department has already gone on record opposing the bill.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE