AZ New Class 2 Casino

Usually when I write something on my blog, it is related in some way to gambling in California. Today our travels are taking us to Arizona instead. 

If you are a slot fanatic, you might have seen a thread on one their forums about a new Class 2 Native American casino opening this December in Arizona. If you haven’t heard about AZ’s West Valley Casino, check it out HERE. For another view, take a quick look HERE. You’ll find some bias in the presentation of the issue depending on which article you read. You might even need to visit a couple sites to see what all the fuss is about. It’s more than whether the games are Class 2 or Class 3.

The Tohono O’odham Nation has been trying to open a Class 3 Vegas style casino just west of Phoenix, near the borders of Glendale and Peoria for the past 6 years. They have offered, without success, to pay the State and Glendale to license Class 3 machines even though the Tribe could operate Class 2 machines much more cheaply. The State has rejected these offers. So now the tribe plans to bypass State licensing and open its West Valley Casino without State approval. That means it must operate all Class 2 gaming machines. 

We’ve talked a lot about Class 2 slots over the past year. I have four posts earlier in this blog about the difference between Class 2 and Class 3 games. Random $$ Slots has a YouTube channel where you can watch and learn about 25 of these Class 2 games if you are interested in seeing them played. You might know Class 2 and Class 3 games are not the same, but many people can’t tell the difference. 

The biggest difference to the tribe and to the state is a financial one. State compacts require large payments from the tribes to license Class 3 slots, but not Class 2 ones. The principal difference to the player is in how the machines play. Class 2 games are like electronic bingo games with a central server where there are at least two players competing for a jackpot. Class 3 Vegas style games have set odds and results determined by a random number generator with the players competing against the casinos. 

When completed, the new Arizona Class 2 casino will have 1,089 gaming machines, but no blackjack or other table games. Currently there are only 40 Class 2 machines in use in the entire state of Arizona, according to Andy Asselin, CEO of the tribe’s Desert Diamond Casinos and Entertainment. Ground was broken on West Valley on August 28, 2014. Construction is expected to be completed in early 2016. West Valley will be a 1.2 million square-foot casino located on 78-acres near the sports and entertainment district of western Maricopa County and will include a spa, hotel, events center, bars and restaurants, retail space and a convention center. It has the potential to generate a lot of income for the tribe and for the state. You would think they’d be anxious to come to an agreement.

The casino’s problems all stem from Indian Gaming Regulations, and how they are applied to Trust Lands. The property owned by West Valley was not part of the original reservation. It is replacement land held in trust for the Indians by the US government. 

Under the Indian Regulatory Act of 1934, tribes are allowed to obtain additional land and convert it into trust status. This is land held by the federal government for the benefit of tribal members. It must be contiguous to the existing reservation land or it must be from federal surplus lands. When approved by both the Department of the Interior and by Congress, this land legally becomes part of the tribe’s reservation and can become gaming-eligible under state and federal law.

IGRA prohibits gaming on lands acquired for Indians in trust after its enactment date October 27, 1988. There are exceptions, however. The exceptions include (1) land contiguous to the reservation, (2) land acquired in the best interest of the tribe and not detrimental to the local community which meets the governor’s approval, (3) land acquired for tribes that had no reservation when IGRA was enacted, (4) land acquired as part of a reservation for a newly recognized tribe or the restoration of lands for a restored tribe. Section 20(b)(1)(A) of IGRA allows gaming establishments of such land held in trust if a gaming establishment would be in the best interest of the tribe and not detrimental to the surrounding community, and the governor concurs. This is known as “Two Part Determination.” Once done, any land subject to the determination is essentially excised “out of state” and off the tax rolls without legislative consultation. Excising land off the state tax rolls is not something states want to do.

Here’s what happened to the Tohono O’odham Nation: 

During the 3 year period from 1957-1960, the United States Army Corp of Engineers constructed the Painted Rock Dam to help control seasonal floods on the lower reaches of the Gila River. Things did not go as planned, and water impounded by the Painted Rock Dam caused the flooding of about 10,000 acres of the Gila Bend Reservation. The flooding destroyed a 750-acre tribal farm and several communities. Residents were relocated to a 40-acre parcel called San Lucy Village, Arizona. 

In 1986, the federal government and the nation approved a settlement in which the nation agreed to give up its legal claims in exchange for $30,000,000 and the right to add up to 10,000 acres of newly purchased land to its reservation. This was authorized by the Gila Bend Indian Reservation Lands Replacement Act, Public Law 99-503. In 2003 the nation purchased 135 acres of unincorporated land near Glendale, AZ, for replacement land for the purposes of economic and community development. Some claim the tribe did not make its intentions clear when it acquired this replacement land.

The nation asked the Secretary of the Interior to take the land into trust allowing them to build a casino per IGRA. Lawsuits have challenged the qualifications of these 135 acres as replacement land. They have also accused the tribe of deceptive behavior and misrepresentations as to the nature of the planned casino.

The tribe has also sued state officials alleging the department of gaming has exceeded its authority interfering with its efforts to open the casino. AZ and rival gaming tribes claim the 2002 compacts prohibit additional casinos in metro Phoenix. Courts have ruled this is not true, and that ruling is now under appeal.

So, will Arizona have a new Class 2 casino for the new year? Maybe. Maybe not. The tribal chairman Edward Manuel says the tribe will operate as a Class 2 casino until its issues with the state are resolved and then will convert to Class 3 gaming. So, if you are planning a trip to Arizona for the Fiesta Bowl on New Year’s Day you may or may not be able to get in some gambling time at West Valley before or after the game. Or, as my son jokes, you can always visit the Grand Canyon and throw your money down that hole instead. Stay tuned.