Tribal sovereignty and casinos: a bad mix

A commercial casino, subject to all state and local laws, is one thing. But a tribal casino on tribal lands is exempt from state and local regulation; tribes are considered to be sovereign nations. Even many of the protections of the US Constitution may be absent; the Fourteenth Amendment extended federal constitutional protections to state (and local) governments, but not necessarily to tribal lands.

Tribal sovereignty also means that tribes cannot be sued, except in tribal courts, unless the tribe has explicitly waived immunity. This applies to casino patrons, casino contractors, and local governments. Tribes are usually reluctant to waive immunity, in part because sovereignty is an important part of tribes' autonomy and independence. But it is also well understood by tribal governments that jury verdicts and judgements can be very expensive.

The Prairie Band did sign an intergovernmental agreement with DeKalb County. In that agreement, in 14, the Tribe agrees to binding arbitration with the County, not to being sued. There is a waiver of sovereign immunity, in 15, but only to enforce an arbitrator's decision.

Here is a brief list of some liability and sovereignty issues that raise concern regarding the proposed Shabbona casino. All of them could have been addressed in the 2008 Intergovernment Agreement with DeKalb County, but were not. The 2008 agreement was drafted at a point when many (not us!) believed the Prairie Band had a strong claim to reservation status for their land, and there was little the County could do beyond accepting the agreement offered. That reservation claim is now dead, but the lopsided Intergovernmental Agreement has never been updated.

1. The Prairie Band has not agreed to so-called dram-shop liability. If a customer is sold an excessive amount of alcohol and then drives off and injures someone else, that third party cannot sue the casino in Illinois courts. Commercial establishments serving alcohol, on the other hand, are liable for over-served patrons.

At casinos generally, both tribal and commercial, alcohol is ubiquitous.

In some other locations, tribal agreements with local governments do establish that tribes have dram-shop liability for the actions of casino patrons. In places without such clauses in the intergovernmental agreement, though, courts have regularly found that tribes are indeed immune from dram-shop lawsuits.

In the Intergovernmental Agreement with DeKalb County, the Prairie Band did agree to purchase liquor-liability insurance. But without the liability, this means nothing.

2. The Prairie Band has not agreed to any form of neutral third-party review of liability for patron injuries or other claims. There is no binding-arbitration option. If a patron slips on the ice, or sits in a broken chair, any settlement is entirely at the voluntary discretion of the casino.

If there is a serious food-poisoning incident, the County's only option is to request an arbitration hearing.

Casino patrons tend to carry large amounts of cash, but the Prairie Band will have no legal obligation to provide adequate security. If a theft or assault occurs, it is unlikely that tribal courts will hold the casino partly responsible. There have been a surprising number of patron assaults over the years by casino employees in the name of "security"; a patron assaulted at a tribal casino has no independent legal recourse.

In 21 of the Intergovernmental Agreement with DeKalb County, the Prairie Band agreed to obtain insurance coverage for "the Tribal Project Lands and all structures constructed thereon". That amounts to insurance on their buildings; what coverage applies to patrons? Even if patron insurance is obtained, however, without tribal liability there is no obligation for the insurance company to settle claims.

3. The Illinois Gaming Board maintains a voluntary self-exclusion program for problem gamblers. People who put themselves on the exclusion list are barred from admission to commercial casinos in Illinois. The Prairie Band has no obligation to comply with this program.

The Prairie Band also has no obligation to restrict access to ATM machines on their premises, despite existing laws forbidding gambling with credit-card cash advances.

4. The intergovernmental agreement with DeKalb County contains a "fair market value purchase guarantee" clause, in 5B. If the owners of property near the casino are unable to sell for a fair market value due to the proximity of the casino, the Prairie Band is supposed to offer to buy the property. This clause was supposed to reassure homeowners who had fears about how the casino might impact home values.

But the clause is completely unenforceable, as the Prairie Band did not waive immunity for lawsuits brought by these property owners.

5. The Intergovernmental Agreement has no clause allowing County review of future growth, meaning that the Prairie Band can build whatever they like, whenever they like. The County Board has always been friendly to legitimate economic development; there is little chance they would block well-considered, site-appropriate growth. Expansion to support the casino as a travel destination (lodging, non-casino activities) might reduce the casino's burden on county residents. Giving the County a voice in expansion would have been very reasonable; what is the Prairie Band afraid of?

It is not just patrons and residents who may have difficulties with the Prairie Band's sovereign immunity. Many labor laws likely would not apply to casino employees, including those creating unemployment insurance and laws protecting the right to organize.

And recently several tribes have legalized marijuana, following a Justice Department memo in 2014 determining that tribes would be treated like Colorado and Washington when it came to legalization. But states legalize marijuana for their own citizens; the vast majority of casino visitors are non-Indians. The Flandreau Santee Sioux built a facility to market marijuana to South Dakotans, although in November 2015 they temporarily suspended plans to open it.

All in all, tribal sovereign immunity places an enormous burden on the non-tribal-members involved. A tribal casino is a very different kind of place from a commercial casino. DeKalb County simply does not need this headache.