New Bedford developer sues over gambling law

Calls provision for tribes an illegal “racial set-aside”

Hours after Gov. Deval Patrick signed legislation legalizing casino gambling in Massachusetts, the would-be developer of a New Bedford casino is asking a federal judge to block the law’s implementation.

KG Urban Enterprises, a development firm that wants to build a casino at the site of an abandoned power plant on New Bedford’s waterfront, sued Patrick over a provision in the casino law that gives federally recognized Native American tribes an exclusive negotiating period to seek a gaming license in southeastern Massachusetts. The Mashpee Wampanoag are the only tribe that could conceivably take advantage of this exclusive period. The developer’s lawsuit contends that this exclusive negotiating period amounts to an illegal “racial set-aside provision” that violates federal equal protection guarantees, and oversteps federal authority over tribal gaming.

KG is also seeking a preliminary injunction that would block the implementation of the new casino law until a judge can rule on the lawsuit.

New Bedford gaming supporters have been warning of an impending lawsuit since this summer, when the language concerning the tribal preference first surfaced. Tribal gaming across the country was thrown into limbo in 2009, when the Supreme Court ruled that the Department of the Interior only had the right to take land into federal trust for tribes that were recognized prior to 1934. The Supreme Court said that Congress would have to pass legislation allowing Interior to do land deals with tribes recognized after that date. No such legislation has passed.

KG’s lawsuit argues that, because the Mashpee don’t possess a federal reservation or land in federal trust, they’re unable to operate a casino under the federal Indian Gaming Regulatory Act. And, the suit argues, because the Mashpee don’t have land and can’t operate under federal tribal gaming regulations, the Massachusetts law’s tribal preferences are discriminatory.

“Race is the sole determinative factor in awarding a commercial gaming license in Southeastern Massachusetts, and completely displaces the normal competitive process that prevails in the rest of the Commonwealth,” the complaint argues. “The state has no more authority to reserve a commercial gaming license for an Indian tribe than it has to exclude tribes from competing for such licenses on equal terms with other applicants… There is no Indian gaming exception to the Equal Protection Clause.”

At the State House signing ceremony earlier today, both House Speaker Robert DeLeo and Patrick said they are confident the bill will withstand a challenge to the set-aside, although DeLeo did admit that it “could slow down the process” of permitting any casinos until it’s all sorted out.

“There’s a few things that could slow the process,” DeLeo said. “The local control option could slow it down, the challenge to a set-aside could slow it down. We’ve had counsel look at it extremely closely” in anticipation of court challenges, DeLeo added. “But someone could still file suit like they could over any legislation.”

Patrick said he is satisfied the law would pass constitutional muster and said the rights of Massachusetts tribes had to be considered in crafting the bill.

“It (the law) represents and respects the rights of tribes,” Patrick said.