Monday, March 10, 2008

Commercial Agreement v. Compact

Maybe I am missing something here...but if I understand the premise for the commercial agreement with the Tribe, it is to protect the citizens of Massachusetts. If that is so, then doesn't a compact do that better than a commercial agreement.

Think of it this way. The State negotiates a commercial agreement with the Tribe that limits certain sovereignty issues (e.g., personal injury claims being subject to AAA arbitration or State Court jurisdiction with no limits on liability), as well as a 25% - 27% cut from gaming revenues. This deal would then mean that the Tribe is subject to State regulation.

If both parties agree to a set up like this, then why not just do a compact with the same terms. A compact would mean that the Tribe would then be subject to regulation by each of the State, the NIGC and the Tribe. Isn't more regulation a better protector of the citizens? Isn't a commercial agreement ONLY subject to State regulation--and we all know how good the State is at that.

It almost seems that the only reason for the State to go the commercial route has nothing to do with regulation and protection, and more to do with the initial fee/bidding process. In fact, the commercial route actually seems to leave the citizens more exposed without the experienced NIGC being involved. It also seems to leave the Tribe more exposed to potential exploitation by the developers, since there are no limits on how long the developers can remain involved in the project, as there are under the federal rules.

Like I said...I may be missing something, but it seems that if a commercial agreement can be reached, the State should call it a compact and get the additional regulatory help...for our sakes.

3 comments:

Bellicose Bumpkin said...

Why a commercial casino is a better option than a tribal casino

1. Sovereignty: The tribe has shown that they will resist anything that infringes on their sovereignty. At a minimum, it adds a level of complexity to any town or entity that has to interact with the sovereign nation.

2. MONEY: According to Patrick's plan, there would $25M in mitigation for surrounding towns. Could this change? Yes. But so could a tribal/state compact. And as for Middleboro, we would receive $18M with a commercial facility versus $7-9M with the tribal casino.

3. Growth protection: If the tribe expands without acquiring more land - which they could easily do, Middleboro gets zilch unless the expansion is a hotel.

4. Transparency: History doesn't support the idea of a tribal casino as "more regulated", the NGISC report repeatedly mentioned the difficulty in getting data out of tribal casinos due to their sovereign status. Which begs the question of "what are they trying to hide?".

5. Environmental: The commercial casino must adhere to MEPA. Not so with the tribal casino.

6. Money(part 2): I don't have the numbers handy, but based on other tribal casinos, I'm sure the state would get more money from a commercial casino. I admit that I haven't looked at that figure and could be wrong - but I doubt that I am.

7. Loss of flexibility: Based on the deal that CT made, a waiver of sovereign immunity and payments to the state, will only come with some sort of exclusivity agreement. This would hobble the state's ability to alter the gambling landscape if circumstance dictates a change in the future.

AMB said...

But, if you can reach a deal with the State on all of these terms, what is the difference if it is a compact, rather than a commercial agreement?

Bellicose Bumpkin said...

My point is that the Mashpee's track record and public statement so far tell me that they would not be willing to make the concessions required to make a tribal casino equivalent to a commercial one ... from the state's perspective.

And even if they did, I think the tribal one is still less desirable due to the added complexity of dealing with the sovereign nation - again from the state's perspective.