A judge has ruled that the Kewadin Casinos Gaming Authority (KCGA) must pay over $88 million in damages over failed plans to build two off-reservation casinos in Michigan. The KCGA belongs to the Sault Ste. Marie Tribe of Chippewa Indians.
The Ingham County Circuit Court judge found the KCGA liable for not repaying roughly $9 million in loans to several investors. The ruling also includes potential future profits from the unbuilt casinos.
Failed tribal Michigan casino plans entitle investors to damages
JLLJ Development and Lansing Future Development II sued the KCGA for breaching casino development contracts. Under the agreements, the investors were to finance the opening of temporary casinos operated by the KCGA.
Once the permanent locations were up and running, the KCGA would repay investors with the Michigan casino profits.
In the lawsuit, the investors said the tribe made false claims that it could “easily acquire” the land for the casinos and have them placed into trust with the US Department of the Interior (DOI).
One off-reservation casino was set to be built near the Detroit Metro Airport and another in downtown Lansing. In total, the damages amount to:
- $60 million for the unbuilt casino near the airport
- $28.8 million for the unbuilt casino in Lansing
Judge Joyce Draganchuk has yet to issue a final judgment; however, the ruling handed down Monday entitled the investors to damages for breach of contract.
Not placing land sites into trust is a major issue
According to the Detroit Free Press, the Sault tribe failed in getting the DOI to place the land sites into trust. This crucial step is necessary for building off-reservation casinos.
In February, the DOI declined the tribe’s request for the airport location. In its ruling, the DOI said the tribe failed to prove how an off-reservation casino improved tribal lands.
According to an opinion stated in Michigan News from Judges Noemi Rao and David Sentell: “In order to increase tribal land, the acquisition must improve the quality or value of the existing land of the tribe.”
The Sault tribe is the largest in Michigan by membership. The tribe operates five small Michigan casinos near its reservation in the Upper Peninsula.
Experts anticipate the verdict to be appealed to the Michigan Court of Appeals.