Tribal leaders are looking at what they would do with casino money.

PORTLAND (AP) – It’s the $100 million question.

What will the Penobscot and Passamaquoddy Indian tribes do with tens of millions of dollars they expect to get each year if a $650 million casino and resort is built in southern Maine?

Already, tribal leaders are meeting with financial advisers, assessing their needs and building a framework for how to manage the money. Between them, the tribes expect to receive $50 million to $100 million a year in casino profits.

Preparing for a jackpot of that magnitude is somewhat like planning what to do with winnings from a lottery – before it’s been won. “Just imagine,” the Tri-State Megabucks catchphrase goes.

Right now, says Penobscot Nation Governor Barry Dana, “We are imagining.”

There are more than 600 casinos nationally in more than half the states. At the end of last year, 330 of those were Indian operations, generating $14.5 billion in revenues, according to the National Indian Gaming Commission.

Those tribes are bound by the federal Indian Gaming Regulatory Act, which specifies how casino revenues can be spent. The act says profits can be used to fund tribal government operations, promote economic development, donate to charity and provide for the general welfare of the tribes.

Only then, the law says, are tribes allowed to distribute money to individual tribal members. The federal Bureau of Indian Affairs must approve any plan on how the money will be distributed.

The Maine tribes, however, are not subject to IGRA, because of the 1980 Maine Indian Land Claims Act. In the federal government’s eyes, a Maine casino – if approved by voters Nov. 4 – would not be an “Indian casino” even though it would be owned by Indian tribes.

Instead, it would be categorized as a commercial casino, meaning the tribes could do whatever they want with their profits – the only tribes nationwide that can make that claim.

Jacob Coin, executive director of the California Nations Indian Gaming Association, refused to even discuss how California tribes are managing their casino profits for comparison to what Maine tribes may do.

“If they’re not a tribal government gaming situation, you’re essentially talking about commercial gambling. And that’s not the same thing,” he said.

Regardless, the Penobscot Nation plans to spend a large portion of its share of profits on things that would be mandated by IGRA. Leaders with the Passamaquoddy tribe did not return phone calls for this story.

In anticipation of the casino being approved, Penobscot tribal leaders have twice met with financial consultants with A.G. Edwards in Bangor to begin outlining a process to determine how to manage the money.

At the first meeting, Dana said, tribal members told A.G. Edwards advisers: “Hey, we have this big pot of money on the table. What do we do with it?”

Tribal leaders fully expect to earmark a certain portion of money to improve living conditions for the tribe. The Penobscot Nation says it has a 13.3 percent unemployment rate on its Indian Island reservation and a waiting list for at least 40 housing units.

Dana said he anticipates money going to improve health care, provide college funding, supply business loans and build apartments and other housing. “Housing, education and health care are the big needs we need to address,” he said.

Other funds could be used to build a cultural center, which might house a museum, to preserve the cultural history of the tribe.

Dana said he also expects an investment fund of some sort to be established, with regular dividend payouts to tribal members. A formula would have to be worked out, he said, stipulating things such as how much of the interest should be drawn down each year, or how payments should be allocated based on things such as a recipient’s age.

Before anything can happen, a plan will be put to the 12-member Tribal Council, after which there would be a series of public hearings, probably shortly after the casino referendum if it passes, Dana said.

“There are a ton of ideas out there,” he said. “You sit 10 people down at a table, and you’ll get 10 different ideas – and they’re all good.”

It’s not as if the tribes haven’t had money put in front of them before. The Maine Indian Land Claims Settlement gave the tribes $81.5 million, which went to acquire land, establish trust funds and invest in businesses.

Some of the business investments succeeded, some flopped. The trust funds still give tribal members small payments each year. Most Penobscots, for instance, get about $63 every three months from the tribe’s fund, Dana said.

Nationwide, casinos have been praised and panned for what they have done to help, or not help, Indian tribes.

Critics have maintained that most profits go to non-Indian backers, not the tribes, and that tribes themselves have not benefited from their casino operations. But others say casino proceeds have helped raise the standard of living on numerous reservations.

The cash payouts to tribal members vary by policy, casino profitability and the size of the tribes.

Members of one California tribe reportedly got $200,000 bonus checks last November as their share of their casino’s profits – on top of the $15,000 monthly stipends they were receiving. But other tribes continue to live in poverty with little to show.

Carla Nicholas of the National Indian Gaming Association said even though most tribes have low incomes and high unemployment, casino profits have still paid for new schools, health care clinics, police stations, sewer and water systems, and other amenities.

“Maybe we’re not quite there,” she said, “but Indian gaming has made a very big difference in the lives of people.”

Even Standard & Poor’s credit rating service has taken notice of Indian casinos. In a report last month, S&P rated six Indian casinos, up from just two in 2000. The increase reflects the growth in demand for gaming and the “success of many of these operations,” the report says.

Dana said the Penobscot tribe has become smarter about money since the land claims settlement 23 years ago. He clearly remembers some of the failed investments with that money.

This time around, he said, “We’re not going to get this money and blow it.”

AP-ES-10-12-03 1558EDT

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