Tribe face hurdles in expanding gambling on the reservation

By Kevin Woster, Journal staff | Saturday, February 17, 2007

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When Oglala Sioux Tribe chairman John Yellowbird Steele looks toward the future of gambling on Pine Ridge Indian Reservation, he sees more slot machines and more people to play them.

That’s a vision that could hold great promise for the tribe’s economic future. But it also is an undeniable benefit to the state, Steele said.

“Our customers come from Wyoming and Nebraska. We’re bringing people into South Dakota,” he said. “We’re actually helping the economy of South Dakota.”

But Steele’s picture of prosperity comes with clear complications. An expansion plan for the tribe’s existing Prairie Winds Casino -- an ambitious venture that includes a new hotel and conference center aimed at making the isolated casino into a full-fledged destination -- could be hinged at least in part on adding more slot machines.

And right now, the Oglala and seven other Sioux tribes in South Dakota with casinos are bound by contracts with the state to a limit of 250 slots. Although Steel wouldn’t discuss his tribe’s compact situation or other gambling issues last week, some tribal officials say the state restrictions on slot-machine numbers hamper the growth of tribal gambling on their reservations.

“We need more machines,” said Eloise Drapeau, secretary of the Flandreau Santee Tribe in Flandreau, which operates the Royal River Casino & Hotel. “We’re already built to hold 500 (machines) on the floor, so it would be no added expense.”

Drapeau said that especially during weekends, demand at the casino could keep those additional machines busy.

“We have a lot of people standing around waiting to get on machines,” she said.

They might have to continue that wait. Provisions of federal law grant tribes the right to operate the same types of gambling allowed elsewhere in the state and require tribes to have gambling compacts with the state. They also require the states to negotiate those contracts in good faith.

Provisions in those compacts can include limits on the number of slot machines -- the real money makers in most operations. South Dakota currently sets that limit at 250.

Many tribal members are critical of that limit. And some believe that Gov. Mike Rounds and his negotiators keep the cap unreasonably low in order to protect video lottery and gambling in Deadwood, both of which produce money for South Dakota.

Leaders from tribes throughout the state will meet in Rapid City this week to discuss economic development issues, including gambling. The state compacts and machine limits are certain to be part of those discussions.

Like Steele and the Oglala, other tribes are considering whether and how to expand their casino operations and also how important additional machines might be if they do. Michael LaPointe, chief of staff for Rosebud Sioux Tribe President Rodney Bordeaux, said the tribe is preparing carefully for negotiations with the state to renew its gambling compact, which expires in May.

Tribal leaders also are pondering the future for their Rosebud Casino on U.S. Highway 83, 19 miles south of Mission.

“The tribe is in the process of determining scenarios, including whether it makes sense to stay where we are or expand at another location,” LaPointe said. “We don’t want to ask for anything until we know why we are asking for it. We’re willing to negotiate in good faith on our end.”

That’s how South Dakota approaches the negotiations, too, said Larry Eliason, executive secretary of the South Dakota Gaming Commission. The state wants to be fair with tribes but also live up to the “limited gaming” philosophy that was stated in law when voters in 1988 authorized gambling in Deadwood, opening the door to similar gambling types on the reservation.

When the Legislature implemented that vote in 1989, it imposed a limit of 30 gambling devices per building in Deadwood, and a $5 bet limit -- which rose to $100 through an initiated measure in 2000.

With the addition of more gambling operations and some creative construction, the 30-machine-per-building limit allowed for 2,998 slot machines and 92 card tables in Deadwood last year. And some tribal members have wondered why a town is allowed 3,000 slot machines when a tribe is limited to 250.

Along with those limited slot machines, listed as Class 3 gambling devices in the federal law, the tribes are allowed an unlimited number of Class 2 devices, generally electronic bingo machines. But tribal officials said those machines are not as popular or profitable as the slot machines.

Eliason said negotiating compacts includes a variety of complicated factors. And even setting the slot-machine limit could have multiple potential impacts, he said.

“The governor and the state need to consider a variety of factors, including the possible impact on other forms of gaming and what public policy is,” he said. “Our feeling is that the public policy for the state is limited gaming.”

It’s unclear how many machines that could someday mean for tribes that believe more slot play is crucial for their futures. But today’s limit isn’t necessarily tomorrow’s, Eliason said.

“I would never be quoted as saying that 250 is a line in the sand. I’d never make that statement,” he said. “Our position is, we believe the public policy is limited gaming. It means that 250 is the current limit, subject to negotiations.”

There are more of those to come -- along with plenty of dreams for the future.

Contact Kevin Woster at 394-8413 or kevin.woster@rapidcityjournal.com