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Casino payments dispute in Duluth likely headed to court

A dispute between the city of Duluth and the Fond du Lac Band of Lake Superior Chippewa appears headed to court, says the Duluth News Tribune.

The tribe, which has an off-reservation casino in downtown Duluth, for years has been paying 19 percent of slot machine revenues to the city. This year’s payment was scheduled to be more than $6 million.

But the tribe has stopped making the payments, saying the arrangement was exploitive.

It’s been an important pot of money for city officials: The payment was used mostly to repair and rebuild city streets, although it also has been used to pay down retiree health care debt and build or rehabilitate low-income housing, says the Duluth paper.

But in an Aug. 10 letter, tribal Chairwoman Karen Diver said the contract with the city was entered into “under erroneous understandings that the city’s consent was necessary to the creation of reservation land within the city.”

She said the city has received more than $80 million over the last 25 years and in return “has provided no consideration or compensable services beyond those municipal services which are legally obligatory.”

In the past, Diver has called the amount the tribe pays the city “a gift.”

“We’re reviewing all of our historical obligations, much like any administration,” Diver told the Duluth paper earlier this week. “And we find this arrangement to be exploitive to the band. We have to put [members’] needs first.”

The paper says the city now is expected to seek an injunction, in an attempt to force the tribe to continue making the payments under a contract first negotiated in the 1980s.

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