Duluth vs. casino dispute expands; band wants $75M back

A major dispute in Duluth over payments by the downtown Fond du Lac casino into the city coffers has taken another turn, with the Indian band now demanding the return of $75 million that it has contributed since 1994.

It’s the latest turn in the high-stakes fight and it’s significant: The city’s annual operating fund is only $75 million, says the Duluth News Tribune.

The Fond du Lac band ended its longtime practice of sharing 19 percent of its slot machine gross with the city, which prompted the city to sue in federal court to restart the payments. In this latest counter-claim, the band says the city hasn’t lived up to the terms of the 1994 contract that led to the opening of the downtown casino, the paper said.

In its suit, the band claims “key provisions” of the contract signed with the city in 1994 don’t comply with the federal Indian Gaming Regulatory Act and should be voided.

“They are the product of a mutual mistake of the parties because the city’s consent was not necessary to permit the band to conduct gaming at the Fond-du-Luth casino,” the lawsuit states.

The city also failed to offer the band “sufficient consideration in exchange for receiving rental and other payments for the band,” and thus the 1994 contracts are “void, unenforceable and unconscionable,” according to the suit.

“The city has no legal right to retain any portion of the rental and other payments that was not directly tied to an actual service or good that the city provided to the band,” the lawsuit said.

The city has come to rely on the gambling proceeds to pay for road repairs and retain a high credit rating, so it’s fighting to get the payments reinstated. And this latest demand for repayment would be devastating, officials said.

“The band’s demand that we pay them $75 million would have a devastating impact on our community and public services,” Mayor Don Ness said. “Obviously, it is an extreme position for the band to present to the federal court.”

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