MGM Mirage's Hidden Card

The casino giant is trying to block Indian competition around Detroit by rallying antigambling forces
Parker, of the Bay Mills Indian Community, is dismayed by MGM¹s tactics Bridget Barrett

The flyers mailed to homes across Michigan in late January looked like the handiwork of a group bitterly opposed to gambling. They pictured dice emblazoned with exclamation marks, piles of crumpled-up cash, and text blaring: "Washington Poised to Force Two New Casinos on Michigan Families. Only You Can Stop the Special Interests." The outfit behind this grassroots campaign calls itself Gambling Watch.

As it turns out, Gambling Watch is a tiny operation financed by MGM Mirage (MGM), one of the world's largest gaming companies. MGM is locked in a bitter dispute with two Native American tribes that hope to open casinos in Michigan. The Las Vegas company inaugurated a new $800 million casino in downtown Detroit in October and is not in the mood for competition. There's nothing underhanded about its tactics, MGM says. "We've made no secret of where we are on this," says Alan Feldman, senior vice-president for public affairs at MGM Mirage.

American Indian groups are crying foul. "I was shocked and dismayed that [MGM] would sink to that level," says Jeffrey D. Parker, president of the executive council of the Bay Mills Indian Community, which wants to open a casino in Port Huron, Mich., 60 miles from Detroit. Parker reckons the Port Huron gaming palace could generate as much as $200 million in annual revenues. (The ties between Gambling Watch and MGM were first reported in Port Huron's The Times Herald.)

The battle in Michigan mirrors others across the country as cash-rich Native American tribes stake out new gambling opportunities. Vegas casino companies have opposed the expansion of Indian gaming compacts in Nevada. And in recent filings with the Securities & Exchange Commission, MGM warned investors that the growth "of Native American gaming in California has already impacted our operations."

BELTWAY BETS

The clash between Michigan's Indian tribes and MGM could wind up being resolved in Washington. Before construction can start on the proposed Port Huron casino and another proposed by the Sault Ste. Marie tribe for Romulus, Mich., just 23 miles outside Detroit, Congress must first approve a land-swap deal. Supporters and opponents of the measure squared off at a Feb.6 hearing of the House Natural Resources Committee. There, Detroit Mayor Kwame Kilpatrick argued that the new casinos would siphon revenues away from Motown and hamper its efforts to rebound from years of economic decline. For his part, Representative John D. Dingell (D-Mich.), whose district includes Romulus, likened Gambling Watch's tactics to those employed by the infamous Jack Abramoff. The jailed lobbyist, who worked for Native American tribes on gaming issues, funded Christian conservatives who opposed casinos that his clients opposed.

No question, the face-off between MGM and the tribes has been a boon for K Street. MGM spent upwards of $300,000 last year to retain the services of powerhouse lobbying firm Cassidy & Associates, while the Bay Mills and Sault Ste. Marie tribes funneled $400,000 to an assortment of lobbying firms.

It's still unclear where the land-swap proposal is headed. The House Natural Resources Committee approved it, but prospects in the Senate aren't as good. Senate Majority Leader Harry Reid (D‑Nev.), after all, represents Las Vegas.

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