The Continuing Saga of Turf Paradise

Well, Turf Paradise didn’t take to Twitter to complain about the story in the Arizona Republic. They turned to America’s daily paper, USA today.

The bottom line from Turf Paradise’s perspective: Tribal casinos and Arizona’s unfair gambling policies are to blame for any problems Arizona racing has.

To be fair, Turf Paradise has a point. There are 23 casinos in the state of Arizona, and four significant casinos within 28 miles of the racetrack, including Fort McDowell, Talking Stick (Casino Arizona), Wild Horse Pass and the one Turf Paradise has pointed to as a major impediment, The Desert Diamond  Casino, owned by the Tohono O’odham Nation, 11 miles from the track.

Let’s go through some of the history of that casino. In 2002, state voters approved a compact between Arizona and Indian tribes limiting the number of casinos and gaming devices in the state. The agreement essentially gave Native American tribes exclusive rights to the Arizona gambling industry. Among the more  significant requirements:

  • A maximum of 18,158 slot machines in the State, including transfer agreements. Currently, there are about 15,390 slot machines.
  • A maximum of 1,301 slot machines in any one casino. Slot machine wager limit of $29 for most tribes.
  • A maximum of 3,318 blackjack and poker tables in the State.
  • A combined maximum of 119 blackjack and poker tables in any one casino and bet limits for poker and blackjack.
  • A maximum of 43 casinos in the State. That includes a combined maximum of 29 casinos for gaming tribes that had casinos at the time the Compact took effect in 2003. It also includes a combined maximum of 14 casinos for non-gaming tribes that didn’t have casinos in 2003. If a tribe leases its slot machine rights to another tribe, which many have done, then the number of casinos the first tribe can operate is reduced.

In 2009, Tohono O’odham announced its plans to build a casino and resort on unincorporated county land they bought at 95th and Northern Avenues, a parcel surrounded by the City of Glendale . This caused some consternation in the City of Glendale, especially since the tribe didn’t have a reservation anywhere near Glendale.

Of course, there was some fine print in federal law. When the federal government built the Painted Rock Dam on the Gila River to protect non-Indian farmers, the dam caused flooding in the Tohono O’odham’s Gila River community, rendering 9,880 acres of unusable. A federal law in 1986 allowed the tribe to purchase replacement land in unincorporated areas and apply to have it designated as a reservation.

The Tohono O’odham tribe decided 135 of those acres should be at 95th and Northern Avenues. Who could have figured the federal law to make reservations whole would result in an enclave within a city becoming a Native American reservation?

By July 2010, the  Department of the Interior agreed to designate the land the Tohono O’odham purchased as reservation territory, based on the 1986 law.  This is where the story gets good.

In November of 2010 the Gila River Indian Community sued the Department of the Interior, saying the department did not consider whether the land was eligible for gaming. Glendale joined the suit, arguing the land should not be taken into trust because it was surrounded by the city. Glendale also tried to quash the casino by lobbying the state to pass legislation that would allow Glendale to annex the Tohono O’odham Nation’s land, making it ineligible for reservation status. In February 2011 Governor Jan Brewer signed the legislation. The Tohono naturally sued.

Two weeks later Arizona, the Gila River and the Salt River Pima-Maricopa Indian communities sued the Tohono O’odham, alleging the tribe’s plans violated the 2002 Arizona Gaming Compact passed by the citizens of the state. They argued the compact implicitly capped the number of metro-Phoenix casinos. Reading the specific elements of the compact, that argument seemed to be a stretch, but it turns out the feds had bitten off more than Arizona wanted to chew. Not unexpectedly, both tribes joining in the lawsuit owned casinos in the Valley.

By July 2011 a federal judge issued rulings in favor of the Tohono O’odham on both lawsuits, the Department of Interior and annexation cases. The state and the tribes that had filed the suit appealed to the U.S. 9th Circuit Court of Appeals. Yes, that 9th Circuit Court of Appeals.

But the state and the tribes had another card to play. In 2012 they got Rep. Trent Franks  to sponsor a bill to keep the Tohono O’odham from opening a casino on its West Valley land but the bill died in the Senate. Meanwhile, in May 2013 the 9th Circuit asked the Department of Interior to reissue its ruling on the Tohono O’odham’s reservation status, with deeper explanation.

In November 2013 Representative Franks once again got the U.S. House to pass legislation aimed at blocking the tribe’s Glendale casino. This measure banned tribes that take land into their reservations after April 2013 from opening gambling sites, putting a sunset date of 2027 in the bill. That bill also failed to clear the Senate.

Meanwhile, the 9th Circuit agreed to postpone the compact case until the U.S. Supreme Court had ruled on a Michigan lawsuit. Michigan had sued the Bay Mills Indian Community for refusing to close a casino the tribe built without asking Interior or the National Indian Gaming Commission. The tribe, however, raised sovereign immunity. If the Supreme Court would have done away with sovereign immunity altogether, that would have impacted the lawsuit between Arizona and the Tohono O’odham, but in May 2014 the Supreme Court upheld tribal sovereign immunity, protecting the tribes from getting sued in most cases. The opponents to the casino suffered another loss in July when the U.S. Department of Interior reaffirmed its decision to make the tribal land at 95th and Northern Avenues part of the Tohono O’odham Reservation, meaning the tribe could build whatever it wanted on the land.

The City of Glendale decided to make a turn, and in a divided vote the Glendale City Council agreed to support the Tohono O’odham casino five years after expressing strong opposition to the project. At the same time the U.S. Senate finally decided to insert themselves into the fight when the Arizona senators, John McCain and Jeff Flake, introduced a bill prohibiting new casinos in the metropolitan Phoenix area. The bills didn’t make it out of the session, but with the start of the next session in January 2015 McCain, Flake, Franks and also Paul Gosar reintroduced legislation to ban casinos in metro Phoenix. Really.

The federal maneuvering didn’t deter the Tohono O’odham. They broke ground on the casino in August 2014, inspiring new Governor Doug Ducey, Attorney General Mark Brnovich and Department of Gaming Director Daniel Bergin to let all the parties know a few months later that Arizona would not allow the casino to open because – this is a good one – they alleged the Tohono O’odham Nation committed fraud in negotiating the 2002 gaming compact. There has to be at least a little irony in the state claiming they were hoodwinked by the Indians. The tribe responded by filing a lawsuit asking for an injunction that would allow the casino to open later that year.

In something of a surprise ruling, the U.S. District Court of Arizona denied the tribe’s request for an injunction, ruling that the Tohono O’odham Nation failed to prove it would suffer irreparable harm or financial losses from the state’s attempts to block the casino. Apparently the judge was unfamiliar with the casino business, often known as a license to print money. Hard to imagine their lawyer wasn’t able to sell the idea that millions of dollars were on the table for the tribe.

I know. It’s hard to follow the lawsuits without a program.

By November 2015, the 9th Circuit affirmed the decision that the state law that would have allowed Glendale to annex the tribal property was unconstitutional on the basis that when it comes to tribal issues, federal law trumps state law.

The U.S. House failed to provide quick passage to the legislation sponsored by Franks and Gosar disallowing any new casinos in the Phoenix area, and on December 20, 2015 the Desert Diamond Casino opened with 1,089 slot machines, although without the ability to operate table games.

Negotiations between the state and the Tohono O’odham Nation continued until finally, a week ago the parties reached agreement on what officials described as a massive $300 million expansion project featuring slots, table games, as well as alcohol sale. Interestingly, the other Native tribes running casinos in the state said they wanted more gaming in their facilities. In exchange, they would let Desert Diamond become fully operational. Arizona not only didn’t get what it wanted – no new casino in the Phoenix area – it wound up having to expand gaming on other reservations.

So the long and tedious story of the Glendale casino finally came to an end, the only end anyone could have really expected. I have seen no evidence that Turf Paradise and Jerry Simms were part of the efforts to block the casino, but clearly it will have negative effects on the track.

While Turf Paradise peddles the economic impact of the track ($91 million dollars a year), that only represents .03% of Arizona’s GNP, and frankly will pale in comparison to the economic impact of the casino and the multiple thousands of jobs it will generate. Even given the limited amount tribal casinos contribute to state revenues, they contribute more than Turf Paradise.

Arizona, like many other states that were helpless to stop the proliferation of tribal casinos, has essentially lost any future opportunity to help Turf Paradise out of it’s downward spiral. For the principals of Turf Paradise who wish for reform, the tribal casinos have essentially tightened their hold on casino style gambling. Even if Turf Paradise is spot on in its analysis that the tribal casinos are pushing them off a precipice, they have not done the right things to help themselves to compete for their slice of the gambling dollar. Many horseplayers have ditched betting Turf Paradise because of the excessive take they impose. At the very least, the 20.75% win, place and show takeout makes it incredibly difficult for Turf Paradise to retain new fans long enough to convert them into horseplayers, and like many tracks, they don’t get that raising the take has the inverse effect on revenue.

Turf Paradise played the loyalty card – they’ve been here supporting Arizona for 61 years, aren’t they owed something? One stinking racino in  state that already has 23 casinos and room for 20 more? Turf Paradise tried to get voter approval of slots with Prop 201 and got shot down. Perhaps if voters knew what the future would hold for Turf Paradise they would have made a different decision, but I’m afraid at this point that the proverbial horses have left the barn.

It’s hard to imagine Turf Paradise getting any kind of slots or VLTs now that the state has basically given the tribes carte blanche over any gambling that isn’t horseracing. What the court cases proved is that states are at a severe disadvantage against the the federal laws that govern Indian Gaming. It also proved that gambling in Arizona belongs to the tribes. On May 17, 2017 the sound Turf Paradise heard was a nail slamming into the coffin where horseracing was reposing.

One thing Vince Francia, general manager of Turf Paradise, got right in his response to the Arizona Republic. It could be horse racing’s last straw.