HOUSE BILL No. 5872 May 19, 1998, Introduced by Rep. Gagliardi and referred to the Committee on House Oversight and Ethics. A bill to ratify and approve certain tribal-state gaming compacts. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 1. The tribal-state gaming compacts described in 2 sections 2 to 5 of this act entered into between the federally 3 recognized Indian tribes and this state pursuant to the Indian 4 gaming regulatory act, Public Law 100-497, 102 Stat. 2467, are 5 considered ratified and approved. 6 Sec. 2. The compact between the Little Traverse Bay Bands 7 of Odawa Indians and the state of Michigan providing for the con- 8 duct of tribal class III gaming by the Little Traverse Bay Bands 9 of Odawa Indians is hereby ratified and enacted into law, and 10 entered into by this state as a party pursuant to section 11 of 11 the compact and is legally joined therein in form substantially 12 as follows: 06365'98 LBO 2 1 A COMPACT BETWEEN 2 THE LITTLE TRAVERSE BAY BANDS OF ODAWA INDIANS 3 AND 4 THE STATE OF MICHIGAN 5 PROVIDING FOR THE CONDUCT OF TRIBAL CLASS III GAMING 6 BY THE 7 LITTLE TRAVERSE BAY BANDS OF ODAWA INDIANS 8 9 THIS COMPACT is made and entered into this 29th day of 10 January, 1997, by and between the Little Traverse Bay Bands of 11 Odawa Indians (hereinafter referred to as "Tribe") and the STATE 12 OF MICHIGAN (hereinafter referred to as "State"). 13 RECITALS 14 WHEREAS, the State of Michigan is a sovereign State of the 15 United States of America, having been admitted to the Union pur- 16 suant to the Act of January 26, ch. 6, 1837, 5 Stat. 144 and is 17 authorized by its constitution to enter into contracts and agree- 18 ments, including this agreement with the Tribe; and 19 WHEREAS, the Tribe is a federally recognized Indian Tribe 20 and its governing body, the Tribal Council, is authorized by the 21 tribal constitution to enter into contracts and agreements of 22 every description, including this agreement with the State; and 23 WHEREAS, the Congress of the United States has enacted the 24 Indian Gaming Regulatory Act of 1988, Public Law 100-497, 102 25 Stat. 2467, (hereinafter "IGRA"), which permits Indian tribes to 26 operate Class III gaming activities on Indian reservations 06365'98 3 1 pursuant to a tribal-state compact entered into for that purpose; 2 and 3 WHEREAS, the Tribe proposes to operate a Class III gaming 4 establishment on eligible Indian lands in the State of Michigan, 5 and by Tribal Council Resolution and Tribal Ordinance will adopt 6 rules and regulations governing the games played and related 7 activities at the Class III gaming establishment; and 8 WHEREAS, the State presently permits and regulates various 9 types of gaming within the State (but outside Indian lands), 10 including casino style charitable gaming such as craps, roulette, 11 and banking card games, as well as a lottery operating instant 12 scratch games, and "pick number" games, most of which would be 13 Class III games if conducted by the Tribe; and 14 WHEREAS, the Michigan Supreme Court in Automatic Music & 15 Vending Corp. v. Liquor Control Comm., 426 Mich 452, 396 NW2d 16 204 (1986); appeal dismissed, 481 U.S. 1009 (1987), and the 17 Michigan Court of Appeals in Primages Int'l of Michigan v. 18 Michigan, 199 Mich App 252, 501 NW2d 268 (1993), have held that 19 the statutory exception found at MCL 750.303(2) allows for the 20 play of electronic gaming devices, which includes computerized or 21 electronic games of chance, albeit subject to specified restric- 22 tions regarding the mode of play; and 23 WHEREAS, said casino style table games and electronic gaming 24 devices are, therefore, permitted "for any purpose by any person, 25 organization or entity," within the meaning of IGRA, 25 26 U.S.C. 2710(d)(1)(B); and 06365'98 4 1 WHEREAS, at the general election held on November 5, 1996, 2 the electors adopted an initiated law which provides for a 3 licensing and regulatory system under which casino gambling may 4 be operated in the City of Detroit; and 5 WHEREAS, the State and 7 other federally-recognized Indian 6 tribes in the State have previously entered into substantially 7 similar Compacts for the conduct of Class III games; and 8 WHEREAS, a compact between the Tribe and the State for the 9 conduct of Class III gaming satisfies the prerequisite, imposed 10 by the United States Congress by enactment of IGRA, for the oper- 11 ation of lawful Class III gaming by the Tribe on eligible Indian 12 lands in Michigan; and 13 WHEREAS, the State and the Tribe, in recognition of the sov- 14 ereign rights of each party and in a spirit of cooperation in the 15 interests of the citizens of the State and the members of the 16 Tribe, have engaged in good faith negotiations recognizing and 17 respecting the interests of each party and have agreed to this 18 Compact. 19 NOW THEREFORE, the Tribe and the State agree as follows: 20 SECTION 1. Purpose and Objectives. 21 The purpose and objectives of the Tribe and State in making 22 this Compact are as follows: 23 (A) To evidence the good will and cooperative spirit between 24 the State and the Tribe; 25 (B) To continue the development of effective working rela- 26 tionships between the State and tribal governments; 06365'98 5 1 (C) To compact for Class III gaming on eligible Indian lands 2 of the Tribe in Michigan as authorized by IGRA; 3 (D) To fulfill the purpose and intent of IGRA by providing 4 for tribal gaming as a means of generating tribal revenues, 5 thereby promoting tribal economic development, tribal 6 self-sufficiency and strong tribal government; 7 (E) To provide tribal revenues to fund tribal government 8 operations or programs, to provide for the general welfare of the 9 Tribe and its members and for other purposes allowed under IGRA; 10 (F) To provide for the operation of Class III gaming in 11 which, except as provided in 25 U.S.C. 2710(b)(4) and (d)(2)(A) 12 of IGRA, the Tribe shall have the sole proprietary interest and 13 be the primary beneficiary of the Tribe's gaming enterprise; 14 (G) To recognize the State's interest in the establishment 15 by the Tribe of rules for the regulation of Class III gaming 16 operated by the Tribe on eligible Indian lands; 17 (H) To recognize the State's interest in the establishment 18 by the Tribe of rules and procedures for ensuring the Class III 19 gaming is conducted fairly and honestly by the owners, operators, 20 and employees and by the patrons of any Class III gaming enter- 21 prise of the Tribe; and 22 (I) To establish procedures to notify the patrons of the 23 Tribe's Class III gaming establishment that the establishment is 24 not regulated by the State of Michigan and that patrons must look 25 to the tribal government or to the federal government to resolve 26 any issues or disputes with respect to the operations of the 27 establishment. 06365'98 6 1 SECTION 2. Definitions. 2 For purposes of this Compact, the following definitions 3 pertain: 4 (A) "Class III gaming" means all forms of gaming authorized 5 by this Compact, which are neither Class I nor Class II gaming, 6 as such terms are defined in 2703(6) and (7) of IGRA. Only those 7 Class III games authorized by this Compact may be played by the 8 Tribe. 9 (B)(1) "Eligible Indian Lands" means reservation lands 10 acquired under applicable federal law. A total of 1 tribal Class 11 III gaming facility may be located on Eligible Indian Lands; 12 Provided However, If any tribe which attains federal recognition 13 subsequent to the date of this Compact is granted the right, 14 under a valid Compact with the State of Michigan, to operate more 15 than 1 Class III gaming facility on its Indian lands, the Tribe 16 shall be afforded the same right subject to the same terms and 17 conditions imposed on such newly recognized tribe. 18 (2) Nothing in subsection 2(B) shall be construed to limit 19 the Tribe's ability to change the location of the Tribe's Class 20 III gaming facility within "Eligible Indian Lands". 21 (C) "Tribal Chairperson" means the duly elected Chairperson 22 of the Board of Directors or Tribal Council of the Tribe. 23 (D) "Person" means a business, individual, proprietorship, 24 firm, partnership, joint venture, syndicate, trust, labor organi- 25 zation, company, corporation, association, committee, state, 26 local government, government instrumentality or entity, or any 27 other organization or group of persons acting jointly. 06365'98 7 1 SECTION 3. Authorized Class III Games. 2 (A) The Tribe may lawfully conduct the following Class III 3 games on eligible Indian lands: 4 (1) Craps and related dice games; 5 (2) Wheel games, including "Big Wheel" and related games; 6 (3) Roulette; 7 (4) Banking card games that are not otherwise treated as 8 Class II gaming in Michigan pursuant to 25 U.S.C. 2703(7)(C), and 9 non-banking card games played by any Michigan tribe on or before 10 May 1, 1988; 11 (5) Electronic games of chance featuring coin drop and 12 payout as well as printed tabulations, whereby the software of 13 the device predetermines the presence or lack of a winning combi- 14 nation and payout. Electronic games of chance are defined as a 15 microprocessor-controlled electronic device which allows a player 16 to play games of chance, which may be affected by an element of 17 skill, activated by the insertion of a coin or currency, or by 18 the use of a credit, and awards game credits, cash, tokens, or 19 replays, or a written statement of the player's accumulated cred- 20 its, which written statements are redeemable for cash; 21 (6) Keno; 22 (7) Any other Class III game that lawfully may be operated 23 by a person licensed to operate a casino pursuant to the Michigan 24 gaming control and revenue act, Initiated Law of 1996, MCL 25 432.201 to 432.226; and 06365'98 8 1 (8) Games that lawfully may be conducted pursuant to 2 sections 303a and 310a of the Michigan penal code, 1931 PA 328, 3 MCL 750.303a and 750.310a. 4 This Compact shall apply to card games that are considered 5 to be Class II games pursuant to 25 U.S.C. 2703(7)(C) only if 6 those games are expanded beyond their "nature and scope" as it 7 existed before May 1, 1988, and only to the extent of such 8 expansion. The term "nature and scope" shall be interpreted con- 9 sistent with IGRA, the legislative history of IGRA, any applica- 10 ble decisions of the courts of the United States and any applica- 11 ble regulations of the National Indian Gaming Commission. 12 Any limitations on the number of games operated or played, 13 their location within eligible Indian lands as defined under this 14 Compact, hours or period of operation, limits on wagers or pot 15 size, or other such limitations shall be determined by duly 16 enacted tribal law or regulation. Any state law restrictions, 17 limitations or regulation of such gaming shall not apply to Class 18 III games conducted by the Tribe pursuant to this Compact. 19 (B) Additional Class III games may be lawfully conducted by 20 mutual agreement of the Tribe and the State as follows: 21 (1) The Tribe shall request additional games by letter from 22 the tribal Chairperson on behalf of the Tribe to the Governor on 23 behalf of the State. The request shall identify the additional 24 proposed gaming activities with specificity and any proposed 25 amendments to the Tribe's regulatory ordinance. 06365'98 9 1 (2) The state acting through the Governor shall take action 2 on the Tribe's request within 90 days after receipt. The 3 Governor's action shall be based on the following: 4 (a) Whether the proposed gaming activities are permitted in 5 the State of Michigan for any purpose by any person, organization 6 or entity; and 7 (b) Whether the provisions of this Compact are adequate to 8 fulfill the policies and purposes set forth in the IGRA with 9 respect to such additional games. 10 SECTION 4. Regulation of Class III Gaming. 11 (A) Prior to permitting the initiation of any Class III 12 gaming on eligible Indian lands, the Tribe will enact a compre- 13 hensive gaming regulatory ordinance governing all aspects of the 14 Tribe's gaming enterprise. The requirements of this Section 4 15 are intended to supplement, rather than conflict with the provi- 16 sions of the Tribe's ordinance. To the extent any regulatory 17 requirement of this Compact is more stringent or restrictive than 18 a parallel provision of the Tribe's ordinance, as now or hereaf- 19 ter amended, this Compact shall control. 20 (B) The regulatory requirements of this Section 4 shall 21 apply to the conduct of all Class III gaming authorized by the 22 Compact. At all times in which it conducts any Class III gaming 23 under this Compact, the Tribe shall maintain, as part of its law- 24 fully enacted ordinances, requirements at least as restrictive as 25 those set forth herein. 26 (C) The Tribe shall license, operate, and regulate all Class 27 III gaming activities pursuant to this Compact, tribal law, IGRA, 06365'98 10 1 and all other applicable federal law. This shall include but not 2 be limited to the licensing of consultants (except legal 3 counsel), primary management officials, and key officials of each 4 Class III gaming activity or operation. Any violation of this 5 Compact, tribal law, IGRA, or other applicable federal law shall 6 be corrected immediately by the Tribe. 7 (D) The Tribe may not license, hire, or employ as a key 8 employee or primary management official as those terms are 9 defined at 25 CFR 502.14 and 502.19, in connection with Class III 10 gaming, any person who: 11 (1) Is under the age of 18; or 12 (2) Has been convicted of or entered a plea of guilty or no 13 contest to a gambling-related offense, fraud or misrepresenta- 14 tion; or 15 (3) Has been convicted of or entered a plea of guilty or no 16 contest to any offense not specified in subparagraph (2) within 17 the immediately preceding 5 years; this provision shall not apply 18 if that person has been pardoned by the Governor of the State 19 where the conviction occurred or, if a tribal member, has been 20 determined by the Tribe to be a person who is not likely again to 21 engage in any offensive or criminal course of conduct and the 22 public good does not require that the applicant be denied a 23 license as a key employee or primary management official; or 24 (4) Is determined by the Tribe to have participated in orga- 25 nized crime or unlawful gambling or whose prior activities, crim- 26 inal records, reputation, habits, and/or associations pose a 27 threat to the public interest or to the effective regulation and 06365'98 11 1 control of gaming, or create or enhance the dangers of 2 unsuitable, unfair, or illegal practices, methods and activities 3 in the conduct of gaming or to the carrying on of the business 4 and financial arrangements incidental to the conduct of gaming. 5 (E) The terms "fraud or misrepresentation," as used in 6 subsection (D)(2), shall mean a criminal offense committed in 7 Michigan or any other jurisdiction, involving, theft, fraud or 8 misrepresentation, which is a felony or would be a felony if com- 9 mitted in Michigan, and which was committed as an adult or prose- 10 cuted as an adult offense, and which has not been effectively 11 removed from the employee's criminal record by executive pardon, 12 state court order, or operation of law. 13 (F) The term "any offense," as used in subsection (D)(3), 14 shall mean any criminal offense not described in 15 subsection (D)(2), whether committed in this state or any other 16 jurisdiction, that is, or would be, a crime under the provisions 17 of the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, or 18 the controlled substance provisions of the public health code, 19 1978 PA 368, MCL 333.7101 to 333.7545, or any other criminal 20 offense not specified in subparagraph (2) involving theft, dis- 21 honesty, fraud or misrepresentation arising under the law of 22 Michigan or another state or jurisdiction, that was committed as 23 an adult or prosecuted as an adult offense, and which has not 24 been effectively removed from the employee's criminal record by 25 executive pardon, state court order, or operation of law. 26 (G) All management contracts entered into by the Tribe 27 regarding its gaming enterprise operated pursuant to this Compact 06365'98 12 1 shall conform to all the requirements of IGRA, including 25 2 U.S.C. 2711, and tribal law. If the Tribe enters into a manage- 3 ment contract for the operation of any Class III gaming or compo- 4 nent thereof, the State shall be given 14 days' prior written 5 notice of such contract. 6 (H) All accounting records shall be kept on a double entry 7 system of accounting, maintaining detailed, supporting, subsid- 8 iary records. The Tribe shall maintain the following records for 9 not less than 3 years: 10 (1) Revenues, expenses, assets, liabilities and equity for 11 the location at which Class III gaming is conducted; 12 (2) Daily cash transactions for each Class III game at the 13 location at which gaming is conducted, including but not limited 14 to transactions relating to each gaming table bank, game drop box 15 and gaming room bank; 16 (3) All markers, IOUs, returned checks, hold checks or other 17 similar credit instruments; 18 (4) Individual and statistical game records (except card 19 games) to reflect statistical drop and statistical win; for elec- 20 tronic, computer, or other technologically assisted games, ana- 21 lytic reports which show the total amount of cash wagered and the 22 total amount of prizes won; 23 (5) Contracts, correspondence and other transaction docu- 24 ments relating to all vendors and contractors; 25 (6) Records of all tribal gaming enforcement activities; 26 (7) Audits prepared by or on behalf of the Tribe; and 06365'98 13 1 (8) Personnel information on all Class III gaming employees 2 or agents, including rotation sheets, hours worked, employee 3 profiles and background checks. 4 (I) No person under the age of 18 may participate in any 5 Class III game. 6 (J) The Tribe shall not conduct any Class III gaming outside 7 of eligible Indian lands. 8 (K) The rules of each Class III card game shall be posted in 9 a prominent place in each card room and must designate: 10 (1) The maximum rake-off percentage, time buy-in or other 11 fee charged; 12 (2) The number of raises allowed; 13 (3) The monetary limit of each raise; 14 (4) The amount of ante; and 15 (5) Other rules as may be necessary. 16 (L) Upon the request of the State, the Tribe will provide to 17 the State the background information compiled by the Tribe on all 18 consultants (except legal counsel), management personnel, suppli- 19 ers and employees required to be licensed under 25 CFR Part 556 20 or the Tribe's gaming ordinance to allow the State to verify the 21 Tribe's background information and to make an independent deter- 22 mination as to suitability of these individuals, consistent with 23 the standards set forth in 4(D) herein. 24 (M) The regulatory requirements set forth in this section of 25 this Compact shall be administered and enforced as follows: 26 (1) The Tribe shall have responsibility to administer and 27 enforce the regulatory requirements. 06365'98 14 1 (2) A representative authorized in writing by the Governor 2 of the State shall have the following right to inspect all tribal 3 Class III gaming facilities and all tribal records related to 4 Class III gaming, including those records set forth in 4(H) 5 herein, subject to the following conditions: 6 (a) With respect to public areas, at any time without prior 7 notice; 8 (b) With respect to private areas not accessible to the 9 public, at any time during normal business hours, with 12 hours 10 prior written notice; and 11 (c) With respect to inspection and copying of all tribal 12 records relating to Class III gaming, with 48 hours' prior writ- 13 ten notice, not including weekends. 14 (3) Except as otherwise provided by law or as also allowed 15 by the exceptions defined below, the State agrees to maintain in 16 confidence and never to disclose to any third party any financial 17 information, proprietary ideas, plans, methods, data, develop- 18 ment, inventions or other proprietary information regarding the 19 gambling enterprise of the Tribe, games conducted by the Tribe, 20 or the operation thereof which is provided to the State by the 21 Tribe without the prior written approval of a duly authorized 22 representative of the Tribe, provided that the information is 23 marked as confidential information when received by the State. 24 Nothing contained in this 4(M)(3) shall be construed to 25 prohibit: 06365'98 15 1 (a) The furnishing of any information to a law enforcement 2 or regulatory agency of the United States or State government 3 pursuant to a lawful request of such agency; 4 (b) The State from making known the names of persons, firms 5 or corporations conducting Class III gaming activities pursuant 6 to the terms of this Compact, locations at which such activities 7 are conducted or the dates on which such activities are con- 8 ducted; 9 (c) Publishing the terms of this Compact; 10 (d) Disclosing information as necessary to audit, investi- 11 gate, prosecute, or arbitrate violations of this Compact; 12 (e) Complying with any law, subpoena or court order. The 13 State shall immediately notify the Tribe of any request or demand 14 for the release of confidential information under this subsection 15 4(M)(3)(e) to allow the Tribe to initiate proceedings under 16 Section 7 of this Compact or other applicable law to resolve any 17 dispute regarding the State's intention to disclose such 18 information. 19 (4) The Tribe shall have the right to inspect State records 20 concerning all Class III gaming conducted by the Tribe consistent 21 with Michigan's Freedom of Information Act. 22 (5) The Tribe shall reimburse the State for the actual costs 23 the State incurs in carrying out any functions authorized by the 24 terms of this Compact, in an amount not to exceed $50,000.00 per 25 annum, adjusted annually in accordance with the consumer price 26 index annual inflation index. All calculations of amounts due 27 shall be based upon a fiscal year beginning October 1, and ending 06365'98 16 1 September 30, unless the parties select a different fiscal year. 2 Payments due the State shall be made no later than 60 days after 3 the beginning of each fiscal year. Payments due the State during 4 any partial fiscal year this Compact is in effect shall be 5 adjusted to reflect only that portion of the fiscal year. Within 6 60 days after each fiscal year in which this Compact is in 7 effect, the State shall submit to the Tribe an accounting of 8 actual costs incurred in carrying out any functions authorized by 9 the terms of this Compact. Any amount of said sums paid to the 10 State which are not expended by the State on said actual costs 11 shall be returned to the Tribe by the State within 60 days after 12 the fiscal year or treated as a pre-payment of the Tribe's obli- 13 gation during the subsequent fiscal year. 14 (6) In the event the State believes that the Tribe is not 15 administering and enforcing the regulatory requirements set forth 16 herein, it may invoke the procedures set forth in Section 7 of 17 this Compact. 18 (N) The Tribe shall comply with all applicable provisions of 19 the Bank Secrecy Act, P.L. 91-508, October 26, 1970, 31 20 U.S.C. 5311-5314. 21 SECTION 5. Employee Benefits. 22 The Tribe shall provide to any employee who is employed in 23 conjunction with the operation of any gaming establishment at 24 which Class III gaming activities are operated pursuant to this 25 compact, such benefits to which the employee would be entitled by 26 virtue of the Michigan employment security act, 1936 (Ex Sess) PA 27 1, MCL 421.1 to 421.75, and the worker's disability compensation 06365'98 17 1 act of 1969, 1969 PA 317, MCL 418.101 to 418.941, if his or her 2 employment services were provided to an employer engaged in a 3 business enterprise which is subject to, and covered by, the 4 respective Public Acts. 5 SECTION 6. Providers of Class III Gaming Equipment or 6 Supplies. 7 (A) No Class III games of chance, gaming equipment or sup- 8 plies may be purchased, leased or otherwise acquired by the Tribe 9 unless the Class III equipment or supplies meet the technical 10 equipment standards of either the State of Nevada or the State of 11 New Jersey. 12 (B) Prior to entering into any lease or purchase agreement, 13 the Tribe shall obtain sufficient information and identification 14 from the proposed seller or lessor and all persons holding any 15 direct or indirect financial interest in the lessor or the 16 lease/purchase agreement to permit the Tribe to conduct a back- 17 ground check on those persons. The Tribe shall not enter into 18 any lease or purchase agreement for Class III gaming equipment or 19 supplies with any person or entity if the lessor, seller, or any 20 manager or person holding direct or indirect financial interest 21 in the lessor/seller or the proposed lease/purchase agreement, is 22 determined to have participated in or have involvement with orga- 23 nized crime or has been convicted of or entered a plea of guilty 24 or no contest to a gambling-related offense, fraud or misrepre- 25 sentation, or has been convicted of or entered a plea of guilty 26 or no contest to any other felony offense within the immediately 27 preceding 5 years, unless that person has been pardoned. 06365'98 18 1 (C) The seller, lessor, manufacturer, or distributor shall 2 provide, assemble and install all Class III games of change, 3 gaming equipment, and supplies in a manner approved and licensed 4 by the Tribe. 5 SECTION 7. Dispute Resolution. 6 (A) In the event either party believes that the other party 7 has failed to comply with or has otherwise breached any provision 8 of this Compact, such party may invoke the following procedure: 9 (1) The party asserting noncompliance shall serve written 10 notice on the other party. The notice shall identify the spe- 11 cific Compact provision alleged to have been violated and shall 12 specify the factual and legal basis for the alleged 13 noncompliance. The notice shall specifically identify the type 14 of game or games, their location, and the date and time of the 15 alleged noncompliance. Representatives of the State and Tribe 16 shall thereafter meet within 30 days in an effort to resolve the 17 dispute. 18 (2) In the event an allegation by the State is not resolved 19 to the satisfaction of the State within 90 days after service of 20 the notice set forth in section 7(A)(1), the party may serve upon 21 the office of the tribal Chairperson a notice to cease conduct of 22 the particular game(s) or activities alleged by the State to be 23 in noncompliance. Upon receipt of such notice, the Tribe may 24 elect to stop the game(s) or activities specified in the notice 25 or invoke arbitration and continue the game(s) or activities 26 pending the results of arbitration. The Tribe shall act upon one 27 of the foregoing options within 30 days of receipt of notice from 06365'98 19 1 the State. Any arbitration under this authority shall be 2 conducted under the Commercial Arbitration rules of the American 3 Arbitration Association except that the arbitrators shall be 4 attorneys who are licensed members of the State Bar of Michigan, 5 or of the bar of another state, in good standing, and will be 6 selected by the State picking 1 arbitrator, the Tribe a second 7 arbitrator, and the 2 so chosen shall pick a third arbitrator. 8 If the third arbitrator is not chosen in this manner within 10 9 days after the second arbitrator is picked, the third arbitrator 10 will be chosen in accordance with the rules of the American 11 Arbitration Association. In the event an allegation by the Tribe 12 is not resolved to the satisfaction of the Tribe within 90 days 13 after service of the notice set forth in Section 7(A)(1), the 14 Tribe may invoke arbitration as specified above. 15 (3) All parties shall bear their own costs of arbitration 16 and attorney fees. 17 (B) Nothing in Section 7(A) shall be construed to waive, 18 limit or restrict any remedy which is otherwise available to 19 either party to enforce or resolve disputes concerning the provi- 20 sions of this Compact. Nothing in this Compact shall be deemed a 21 waiver of the Tribe's sovereign immunity. Nothing in this 22 Compact shall be deemed a waiver of the State's sovereign 23 immunity. 24 SECTION 8. Notice to Patrons. 25 In the facility of the Tribe where Class III gaming is con- 26 ducted the Tribe shall post in a prominent position a Notice to 06365'98 20 1 patrons at least 2 feet by 3 feet in dimension with the following 2 language: 3 NOTICE 4 THIS FACILITY IS REGULATED BY ONE OR MORE OF THE FOLLOWING: THE 5 NATIONAL INDIAN GAMING COMMISSION, BUREAU OF INDIAN AFFAIRS OF 6 THE U.S. DEPARTMENT OF THE INTERIOR AND THE GOVERNMENT OF THE 7 (Indian tribe)_________________________. 8 THIS FACILITY IS NOT REGULATED BY THE STATE OF MICHIGAN. 9 SECTION 9. Gaming Outside of Eligible Indian Lands. 10 An application to take land in trust for gaming purposes 11 outside of eligible Indian lands, as defined in Section 2(B) of 12 this Compact, shall not be submitted to the Secretary of the 13 Interior in the absence of a prior written agreement between the 14 Tribe and the State's other federally recognized Indian Tribes 15 that provides for each of the other Tribes to share in the reve- 16 nue of any gaming facility that is the subject of the application 17 to take lands in trust for gaming purposes outside of eligible 18 Indian lands. 19 SECTION 10. Regulation of the Sale of Alcoholic Beverages. 20 (A) The Tribe hereby adopts and applies to its Class III 21 gaming establishment as tribal law those State laws, relating to 22 the sale and regulation of alcoholic beverages encompassing the 23 following areas: sale to a minor; sale to a visibly intoxicated 24 individual; sale of adulterated or misbranded liquor; hours of 25 operation; and similar substantive provisions. Said tribal laws, 26 which are defined by reference to the substantive areas of State 27 laws referred to above, shall apply to the tribal Class III 06365'98 21 1 gaming establishment in the same manner and to the same extent as 2 such laws apply elsewhere in the State to off-reservation 3 transactions. 4 (B) The Tribe, for resale at its Class III gaming establish- 5 ment, shall purchase spirits from the Michigan liquor control 6 commission, and beer and wine from distributors licensed by the 7 Michigan liquor control commission, at the same price and on the 8 same basis that such beverages are purchased by Class C 9 licensees. 10 SECTION 11. Effective Date. 11 This Compact shall be effective immediately upon: 12 (A) Endorsement by the tribal chairperson and concurrence in 13 that endorsement by resolution of the Tribal Council; 14 (B) Endorsement by the Governor of the State and concurrence 15 in that endorsement or legislation of the Michigan Legislature; 16 (C) Approval by the Secretary of the Interior of the United 17 States; and 18 (D) Publication in the Federal Register. 19 SECTION 12. Binding Effect, Duration, and Severability. 20 (A) This Compact shall be binding upon the State and the 21 Tribe for a term of 20 years from the date it becomes effective 22 unless modified or terminated by written agreement of both 23 parties. 24 (B) At least 1 year prior to the expiration of 20 years 25 after the Compact becomes effective, and thereafter at least 1 26 year prior to the expiration of such subsequent 5-year period, 27 either party may serve written notice on the other of its right 06365'98 22 1 to renegotiate this Compact. The parties agree that 25 2 U.S.C.2710(d)(3) through (8), or any successor provisions of 3 law, apply to successor compacts. 4 (C) In the event that either party gives written notice to 5 the other of its right to renegotiate this Compact pursuant to 6 subsection (B), the Tribe may, pursuant to the procedures of 7 IGRA, request the State to enter into negotiations for a succes- 8 sor compact governing the conduct of Class III gaming 9 activities. If the parties are unable to conclude a successor 10 compact, this Compact shall remain in full force and effect pend- 11 ing exhaustion of the administrative and judicial remedies set 12 forth in IGRA and/or any other applicable federal law. 13 (D) The Tribe may operate Class III gaming only while this 14 Compact or any renegotiated compact is in effect. 15 (E) In the event that any section or provision of this 16 Compact is disapproved by the Secretary of the Interior of the 17 United States or is held invalid by any court of competent juris- 18 diction, it is the intent of the parties that the remaining sec- 19 tions or provisions of this Compact, and any amendments thereto, 20 shall continue in full force and effect. This severability pro- 21 vision does not apply to Sections 17 and 18 of this Compact. 22 SECTION 13. Notice to Parties. 23 Unless otherwise indicated, all notices, payments, requests, 24 reports, information or demand which any party hereto may desire 25 or may be required to give to the other party hereto, shall be in 26 writing and shall be personally delivered or sent by first-class, 27 certified or registered United States Mail, postage prepaid, 06365'98 23 1 return receipt requested, and sent to the other party at its 2 address appearing below or such other address as any party shall 3 hereinafter inform the other party hereto by written notice given 4 as aforesaid: 5 Notice to the Tribe shall be sent to: 6 Chairperson 7 ______________________________ 8 Tribe 9 ______________________________ 10 Tribe address 11 Notice to the State shall be sent to: 12 Governor's Office Office of Attorney 13 General 14 State of Michigan Treasury Building 15 P.O. Box 30013 First Floor 16 Lansing, MI 48909 Lansing, MI 48922 17 18 Every notice, payment, request, report, information or 19 demand so given shall be deemed effective upon receipt, or if 20 mailed, upon receipt or the expiration of the third day following 21 the day of mailing, whichever occurs first, except that any 22 notice of change of address shall be effective only upon receipt 23 by the party to whom said notice is addressed. 24 SECTION 14. Entire Agreement. 25 This Compact is the entire agreement between the parties and 26 supersedes all prior agreements, whether written or oral, with 27 respect to the subject matter hereof. Neither this Compact nor 28 any provision herein may be changed, waived, discharged, or ter- 29 minated orally, but only by an instrument in writing signed by 30 the Tribe and the State. 06365'98 24 1 SECTION 15. Filing of Compact with Secretary of State. 2 Upon the effective date of this Compact, a certified copy 3 shall be filed by the Governor with the Michigan Secretary of 4 State and a copy shall be transmitted to each house of the 5 Michigan State Legislature and the Michigan Attorney General. 6 Any subsequent amendment or modification of this Compact shall be 7 filed with the Michigan Secretary of State. 8 SECTION 16. Amendment. 9 This Compact may be amended by mutual agreement between the 10 Tribe and the State as follows: 11 (A) The Tribe or the State may propose amendments to the 12 Compact by providing the other party with written notice of the 13 proposed amendment as follows: 14 (i) The Tribe shall propose amendments pursuant to the 15 notice provisions of this Compact by submitting the proposed 16 amendments to the Governor who shall act for the State. 17 (ii) The State, acting through the Governor, shall propose 18 amendments by submitting the proposed amendments to the Tribe 19 pursuant to the notice provisions of this Compact. 20 (B) The party receiving the proposed amendment shall advise 21 the requesting party within 30 days as follows: 22 (i) That the receiving party agrees to the proposed amend- 23 ment; or 24 (ii) That the receiving party rejects the proposed amendment 25 as submitted and agrees to meet concerning the subject of the 26 proposed amendment. 06365'98 25 1 (C) Any amendment agreed to between the parties shall be 2 submitted to the Secretary of the Interior for approval pursuant 3 to the provisions of the IGRA. 4 (D) Upon the effective date of the amendment, a certified 5 copy shall be filed by the Governor with the Michigan Secretary 6 of State and a copy shall be transmitted to each house of the 7 Michigan Legislature and the Michigan Attorney General. 8 SECTION 17. Tribal Payments to State for Economic Benefits 9 of Exclusivity. 10 (A) The State and the Tribe have determined that it is in 11 the interests of the people of the State and the members of the 12 Tribe to maximize the economic benefits of Class III gaming for 13 the Tribe and to minimize the adverse effects of Class III gaming 14 by providing a mechanism to reduce the proliferation of Class III 15 gaming enterprises in the State in exchange for the Tribe provid- 16 ing important revenue to the State. 17 (B) So long as there is a binding Class III Compact in 18 effect between the State and Tribe and no change in State law is 19 enacted which is intended to permit or permits the operation of 20 electronic games of chance or commercial casino games by any 21 other person (except a person operating such games in the City of 22 Detroit pursuant to the Michigan gaming control and revenue act, 23 Initiated Law of 1996, MCL 432.201 to 432.226) and no other 24 person (except a federally-recognized Indian Tribe operating pur- 25 suant to a valid Compact under IGRA or a person operating in the 26 City of Detroit pursuant to the Michigan gaming control and 27 revenue act, Initiated Law of 1996, MCL 432.201 to 432.226) 06365'98 26 1 within the State lawfully operates electronic games of chance or 2 commercial casino games, the Tribe shall make payments to the 3 State as provided in Subsection (C). 4 (C) From and after the effective date of this Compact (as 5 determined pursuant to Section 11 of this Compact), and so long 6 as the conditions set forth in Subsection (B) remain in effect, 7 the Tribe will make semi-annual payments to the State as 8 follows: 9 (i) Payment to the Michigan Strategic Fund, or its successor 10 as determined by State law, in amount equal to 8% of the net win 11 at the casino derived from all Class III electronic games of 12 chance, as those games are defined in this Compact. 13 (ii) As used in this subsection, "net win" means the total 14 amount wagered on each electronic game of chance, minus the total 15 amount paid to players for winning wagers at such machines. 16 (iii) For purposes of these payments, all calculations of 17 amounts due shall be based upon a fiscal year beginning October 1 18 and ending September 30 of the following calendar year, unless 19 the parties agree on a different fiscal year, and all payments 20 due the State pursuant to the terms of this Section shall be paid 21 no later than 60 days after October 1 and March 31 of each year. 22 Any payments due and owing from the Tribe in the year this 23 Compact is approved, or the final year the Compact is in force, 24 shall reflect the actual net win but only for the portion of the 25 year the Compact is in effect. 26 (D) The operation of electronic games of chance by persons 27 or entities other than federally-recognized Indian tribes 06365'98 27 1 pursuant to a valid Compact under IGRA shall not violate the 2 tribe's exclusive right to operate such machines so long as such 3 machines: 4 (i) Reward a player only with the right to replay the device 5 at no additional costs; 6 (ii) Do not permit the accumulation of more than 15 replays 7 at any 1 time; 8 (iii) Allow the accumulated free replays to be discharged 9 only by activating the device for 1 additional play for each 10 accumulated free replay; and 11 (iv) Make no permanent record, directly or indirectly, of 12 the free replays awarded. 13 SECTION 18. Tribal Payments to Local Governments. 14 (A) From and after the effective date of this Compact (as 15 determined pursuant to Section 11 of this Compact), the Tribe 16 will make semi-annual payments to the treasurer for the county 17 described in paragraph (ii)(1) of this subsection 18(A) to be 18 held by said treasurer for and on behalf of the local revenue 19 sharing board described below, as follows: 20 (i) Payment in the aggregate amount equal to 2% of the net 21 win at each casino derived from all Class III electronic games of 22 chance, as those games are defined in this Compact. The county 23 treasurer shall disburse the payments received as specified by 24 lawful vote of the local revenue sharing board. 25 (ii) It is the State's intent, in this and its other 26 Compacts with federally recognized tribes, that the payments to 27 local governments provided for in this section provide financial 06365'98 28 1 resources to those political subdivisions of the State which 2 actually experience increased operating costs associated with the 3 operation of the Class III gaming facility. To this end, a local 4 revenue sharing board shall be created by those local governments 5 in the vicinity of the Class III gaming facility to receive and 6 disburse the semi-annual payments from the Tribe as described 7 below. Representatives of local governments in the vicinity of 8 the Class III gaming facility shall be appointed by their respec- 9 tive elected body and shall serve at the pleasure of such elected 10 body. The local revenue sharing board shall consist of represen- 11 tatives from each of the following jurisdictions: 12 (1) One representative from the county in which the Class 13 III gaming facility is located; 14 (2) One representative from the village, city, or township 15 in which the Class III gaming facility is located; 16 (3) One representative from a third local unit of government 17 determined by the representatives identified in sub-paragraphs 18 (1) and (2), above, to be most impacted by the Class III gaming 19 facility. 20 The procedures for the functioning of the local revenue 21 sharing board, guidelines for establishments of criteria or a 22 formula for the distribution of revenues, and all other matters 23 not specified in this Compact, shall be determined by the local 24 revenue sharing board. Decisions of the local revenue sharing 25 board concerning the distribution of revenues shall require the 26 unanimous vote of the 3 representatives. The local revenue 27 sharing board's sole function shall be to determine and make 06365'98 29 1 allocations of the tribal payments for the purposes described and 2 subject to the limitations in subparagraphs (iii) to (v) below. 3 (iii) Of the payments made to local units of government, not 4 less than 1/8 of the aggregate payment described in subparagraph 5 (i) shall be paid to local public safety organizations for public 6 safety purposes. 7 (iv) Out of the aggregate payments to local units of govern- 8 ment, each local unit of government shall receive no less than an 9 amount equivalent to its share of ad valorem property taxes that 10 would otherwise be attributed to the Class III Gaming Facility if 11 that site were subject to such taxation. 12 (v) Out of the aggregate payments to local units of govern- 13 ment, after deducting the payment provided in subparagraphs (iii) 14 and (iv), the Board shall allocate an additional portion of such 15 payments to local units of government to offset the actual costs 16 incurred by such local units of government as a result of the 17 development of a Class III gaming facility in the vicinity. The 18 balance of such payments remaining after reimbursement of such 19 actual costs may be utilized for any other lawful local govern- 20 ment purposes. 21 (vi) As used in this subsection, "net win" means the total 22 amount wagered on each electronic game of chance, minus the total 23 amount paid to players for winning wagers at such machines. 24 (vii) For purposes of these payments, all calculations of 25 amounts due shall be based upon a fiscal year beginning October 1 26 and ending September 30 of the following calendar year, unless 27 the parties agree on a different fiscal year, and all payments 06365'98 30 1 due the local units of government pursuant to the terms of this 2 Section shall be paid no later than 60 days after October 1 and 3 March 31 of each year. Any payments due and owing from the Tribe 4 in the year this Compact is approved, or the final year the 5 Compact is in force, shall reflect the actual net win only for 6 the portion of the year the Compact is in effect. 7 Sec. 3. The compact between the Little River Band of Ottawa 8 Indians and the state of Michigan providing for the conduct of 9 tribal class III gaming by the Little River Band of Ottawa 10 Indians is hereby ratified and enacted into law and entered into 11 by this state as a party pursuant to section 11 of the compact 12 and is legally joined therein in form substantially as follows: 13 A COMPACT BETWEEN 14 THE LITTLE RIVER BAND OF OTTAWA INDIANS 15 AND 16 THE STATE OF MICHIGAN 17 PROVIDING FOR THE CONDUCT OF TRIBAL CLASS III GAMING 18 BY THE 19 LITTLE RIVER BAND OF OTTAWA INDIANS 20 21 THIS COMPACT is made and entered into this 29th day of 22 January, 1997, by and between the Little River Band of Ottawa 23 Indians (hereinafter referred to as "Tribe") and the STATE OF 24 MICHIGAN (hereinafter referred to as "State"). 25 RECITALS 26 WHEREAS, the State of Michigan is a sovereign State of the 27 United States of America, having been admitted to the Union 06365'98 31 1 pursuant to the Act of January 26, ch. 6, 1837, 5 Stat. 144 and 2 is authorized by its constitution to enter into contracts and 3 agreements, including this agreement with the Tribe; and 4 WHEREAS, the Tribe is a federally recognized Indian Tribe 5 and its governing body, the Tribal Council, is authorized by the 6 tribal constitution to enter into contracts and agreements of 7 every description, including this agreement with the State; and 8 WHEREAS, the Congress of the United States has enacted the 9 Indian Gaming Regulatory Act of 1988, Public Law 100-497, 102 10 Stat. 2467, (hereinafter "IGRA"), which permits Indian tribes to 11 operate Class III gaming activities on Indian reservations pursu- 12 ant to a tribal-state compact entered into for that purpose; and 13 WHEREAS, the Tribe proposes to operate a Class III gaming 14 establishment on eligible Indian lands in the State of Michigan, 15 and by Tribal Council Resolution and Tribal Ordinance will adopt 16 rules and regulations governing the games played and related 17 activities at the Class III gaming establishment; and 18 WHEREAS, the State presently permits and regulates various 19 types of gaming within the State (but outside Indian lands), 20 including casino style charitable gaming such as craps, roulette, 21 and banking card games, as well as a lottery operating instant 22 scratch games, and "pick number" games, most of which would be 23 Class III games if conducted by the Tribe; and 24 WHEREAS, the Michigan Supreme Court in Automatic Music & 25 Vending Corp. v. Liquor Control Comm., 426 Mich 452, 396 NW2d 26 204 (1986); appeal dismissed, 481 U.S. 1009 (1987), and the 27 Michigan Court of Appeals in Primages Int'l of Michigan v. 06365'98 32 1 Michigan, 199 Mich App 252, 501 NW2d 268 (1993), have held that 2 the statutory exception found at MCL 750.303(2) allows for the 3 play of electronic gaming devices, which includes computerized or 4 electronic games of chance, albeit subject to specified restric- 5 tions regarding the mode of play; and 6 WHEREAS, said casino style table games and electronic gaming 7 devices are, therefore, permitted "for any purpose by any person, 8 organization or entity," within the meaning of IGRA, 25 9 U.S.C. 2710(d)(1)(B); and 10 WHEREAS, at the general election held on November 5, 1996, 11 the electors adopted an initiated law which provides for a 12 licensing and regulatory system under which casino gambling may 13 be operated in the City of Detroit; and 14 WHEREAS, the State and 7 other federally-recognized Indian 15 tribes in the State have previously entered into substantially 16 similar Compacts for the conduct of Class III games; and 17 WHEREAS, a compact between the Tribe and the State for the 18 conduct of Class III gaming satisfies the prerequisite, imposed 19 by the United States Congress by enactment of IGRA, for the oper- 20 ation of lawful Class III gaming by the Tribe on eligible Indian 21 lands in Michigan; and 22 WHEREAS, the State and the Tribe, in recognition of the sov- 23 ereign rights of each party and in a spirit of cooperation in the 24 interests of the citizens of the State and the members of the 25 Tribe, have engaged in good faith negotiations recognizing and 26 respecting the interests of each party and have agreed to this 27 Compact. 06365'98 33 1 NOW THEREFORE, the Tribe and the State agree as follows: 2 SECTION 1. Purpose and Objectives. 3 The purpose and objectives of the Tribe and State in making 4 this Compact are as follows: 5 (A) To evidence the good will and cooperative spirit between 6 the State and the Tribe; 7 (B) To continue the development of effective working rela- 8 tionships between the State and tribal governments; 9 (C) To compact for Class III gaming on eligible Indian lands 10 of the Tribe in Michigan as authorized by IGRA; 11 (D) To fulfill the purpose and intent of IGRA by providing 12 for tribal gaming as a means of generating tribal revenues, 13 thereby promoting tribal economic development, tribal 14 self-sufficiency and strong tribal government; 15 (E) To provide tribal revenues to fund tribal government 16 operations or programs, to provide for the general welfare of the 17 Tribe and its members and for other purposes allowed under IGRA; 18 (F) To provide for the operation of Class III gaming in 19 which, except as provided in 25 U.S.C. 2710(b)(4) and (d)(2)(A) 20 of IGRA, the Tribe shall have the sole proprietary interest and 21 be the primary beneficiary of the Tribe's gaming enterprise; 22 (G) To recognize the State's interest in the establishment 23 by the Tribe of rules for the regulation of Class III gaming 24 operated by the Tribe on eligible Indian lands; 25 (H) To recognize the State's interest in the establishment 26 by the Tribe of rules and procedures for ensuring the Class III 27 gaming is conducted fairly and honestly by the owners, operators, 06365'98 34 1 and employees and by the patrons of any Class III gaming 2 enterprise of the Tribe; and 3 (I) To establish procedures to notify the patrons of the 4 Tribe's Class III gaming establishment that the establishment is 5 not regulated by the State of Michigan and that patrons must look 6 to the tribal government or to the federal government to resolve 7 any issues or disputes with respect to the operations of the 8 establishment. 9 SECTION 2. Definitions. 10 For purposes of this Compact, the following definitions 11 pertain: 12 (A) "Class III gaming" means all forms of gaming authorized 13 by this Compact, which are neither Class I nor Class II gaming, 14 as such terms are defined in 2703(6) and (7) of IGRA. Only those 15 Class III games authorized by this Compact may be played by the 16 Tribe. 17 (B)(1) "Eligible Indian Lands" means reservation lands 18 acquired under applicable federal law. A total of 1 tribal Class 19 III gaming facility may be located on Eligible Indian Lands; 20 Provided However, If any tribe which attains federal recognition 21 subsequent to the date of this Compact is granted the right, 22 under a valid Compact with the State of Michigan, to operate more 23 than 1 Class III gaming facility on its Indian lands, the Tribe 24 shall be afforded the same right subject to the same terms and 25 conditions imposed on such newly recognized tribe. 06365'98 35 1 (2) Nothing in subsection 2(B) shall be construed to limit 2 the Tribe's ability to change the location of the Tribe's Class 3 III gaming facility within "Eligible Indian Lands". 4 (C) "Tribal Chairperson" means the duly elected Chairperson 5 of the Board of Directors or Tribal Council of the Tribe. 6 (D) "Person" means a business, individual, proprietorship, 7 firm, partnership, joint venture, syndicate, trust, labor organi- 8 zation, company, corporation, association, committee, state, 9 local government, government instrumentality or entity, or any 10 other organization or group of persons acting jointly. 11 SECTION 3. Authorized Class III Games. 12 (A) The Tribe may lawfully conduct the following Class III 13 games on eligible Indian lands: 14 (1) Craps and related dice games; 15 (2) Wheel games, including "Big Wheel" and related games; 16 (3) Roulette; 17 (4) Banking card games that are not otherwise treated as 18 Class II gaming in Michigan pursuant to 25 U.S.C. 2703(7)(C), and 19 non-banking card games played by any Michigan tribe on or before 20 May 1, 1988; 21 (5) Electronic games of chance featuring coin drop and 22 payout as well as printed tabulations, whereby the software of 23 the device predetermines the presence or lack of a winning combi- 24 nation and payout. Electronic games of chance are defined as a 25 microprocessor-controlled electronic device which allows a player 26 to play games of chance, which may be affected by an element of 27 skill, activated by the insertion of a coin or currency, or by 06365'98 36 1 the use of a credit, and awards game credits, cash, tokens, or 2 replays, or a written statement of the player's accumulated cred- 3 its, which written statements are redeemable for cash; 4 (6) Keno; 5 (7) Any other Class III game that lawfully may be operated 6 by a person licensed to operate a casino pursuant to the Michigan 7 gaming control and revenue act, Initiated Law of 1996, MCL 8 432.201 to 432.226; and 9 (8) Games that lawfully may be conducted pursuant to sec- 10 tions 303a and 310a of the Michigan penal code, 1931 PA 328, MCL 11 750.303a and 750.310a. 12 This Compact shall apply to card games that are considered 13 to be Class II games pursuant to 25 U.S.C. 2703(7)(C) only if 14 those games are expanded beyond their "nature and scope" as it 15 existed before May 1, 1988, and only to the extent of such 16 expansion. The term "nature and scope" shall be interpreted con- 17 sistent with IGRA, the legislative history of IGRA, any applica- 18 ble decisions of the courts of the United States and any applica- 19 ble regulations of the National Indian Gaming Commission. 20 Any limitations on the number of games operated or played, 21 their location within eligible Indian lands as defined under this 22 Compact, hours or period of operation, limits on wagers or pot 23 size, or other such limitations shall be determined by duly 24 enacted tribal law or regulation. Any state law restrictions, 25 limitations or regulation of such gaming shall not apply to Class 26 III games conducted by the Tribe pursuant to this Compact. 06365'98 37 1 (B) Additional Class III games may be lawfully conducted by 2 mutual agreement of the Tribe and the State as follows: 3 (1) The Tribe shall request additional games by letter from 4 the tribal Chairperson on behalf of the Tribe to the Governor on 5 behalf of the State. The request shall identify the additional 6 proposed gaming activities with specificity and any proposed 7 amendments to the Tribe's regulatory ordinance. 8 (2) The state acting through the Governor shall take action 9 on the Tribe's request within 90 days after receipt. The 10 Governor's action shall be based on the following: 11 (a) Whether the proposed gaming activities are permitted in 12 the State of Michigan for any purpose by any person, organization 13 or entity; and 14 (b) Whether the provisions of this Compact are adequate to 15 fulfill the policies and purposes set forth in the IGRA with 16 respect to such additional games. 17 SECTION 4. Regulation of Class III Gaming. 18 (A) Prior to permitting the initiation of any Class III 19 gaming on eligible Indian lands, the Tribe will enact a compre- 20 hensive gaming regulatory ordinance governing all aspects of the 21 Tribe's gaming enterprise. The requirements of this Section 4 22 are intended to supplement, rather than conflict with the provi- 23 sions of the Tribe's ordinance. To the extent any regulatory 24 requirement of this Compact is more stringent or restrictive than 25 a parallel provision of the Tribe's ordinance, as now or hereaf- 26 ter amended, this Compact shall control. 06365'98 38 1 (B) The regulatory requirements of this Section 4 shall 2 apply to the conduct of all Class III gaming authorized by the 3 Compact. At all times in which it conducts any Class III gaming 4 under this Compact, the Tribe shall maintain, as part of its law- 5 fully enacted ordinances, requirements at least as restrictive as 6 those set forth herein. 7 (C) The Tribe shall license, operate, and regulate all Class 8 III gaming activities pursuant to this Compact, tribal law, IGRA, 9 and all other applicable federal law. This shall include but not 10 be limited to the licensing of consultants (except legal 11 counsel), primary management officials, and key officials of each 12 Class III gaming activity or operation. Any violation of this 13 Compact, tribal law, IGRA, or other applicable federal law shall 14 be corrected immediately by the Tribe. 15 (D) The Tribe may not license, hire, or employ as a key 16 employee or primary management official as those terms are 17 defined at 25 CFR 502.14 and 502.19, in connection with Class III 18 gaming, any person who: 19 (1) Is under the age of 18; or 20 (2) Has been convicted of or entered a plea of guilty or no 21 contest to a gambling-related offense, fraud or misrepresenta- 22 tion; or 23 (3) Has been convicted of or entered a plea of guilty or no 24 contest to any offense not specified in subparagraph (2) within 25 the immediately preceding 5 years; this provision shall not apply 26 if that person has been pardoned by the Governor of the State 27 where the conviction occurred or, if a tribal member, has been 06365'98 39 1 determined by the Tribe to be a person who is not likely again to 2 engage in any offensive or criminal course of conduct and the 3 public good does not require that the applicant be denied a 4 license as a key employee or primary management official; or 5 (4) Is determined by the Tribe to have participated in orga- 6 nized crime or unlawful gambling or whose prior activities, crim- 7 inal records, reputation, habits, and/or associations pose a 8 threat to the public interest or to the effective regulation and 9 control of gaming, or create or enhance the dangers of unsuit- 10 able, unfair, or illegal practices, methods and activities in the 11 conduct of gaming or to the carrying on of the business and 12 financial arrangements incidental to the conduct of gaming. 13 (E) The terms "fraud or misrepresentation," as used in 14 subsection (D)(2), shall mean a criminal offense committed in 15 Michigan or any other jurisdiction, involving, theft, fraud or 16 misrepresentation, which is a felony or would be a felony if com- 17 mitted in Michigan, and which was committed as an adult or prose- 18 cuted as an adult offense, and which has not been effectively 19 removed from the employee's criminal record by executive pardon, 20 state court order, or operation of law. 21 (F) The term "any offense," as used in subsection (D)(3), 22 shall mean any criminal offense not described in 23 subsection (D)(2), whether committed in this state or any other 24 jurisdiction, that is, or would be, a crime under the provisions 25 of the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, or 26 the controlled substance provisions of the public health code, 27 1978 PA 368, MCL 333.7101 to 333.7545, or any other criminal 06365'98 40 1 offense not specified in subparagraph (2) involving theft, 2 dishonesty, fraud or misrepresentation arising under the law of 3 Michigan or another state or jurisdiction, that was committed as 4 an adult or prosecuted as an adult offense, and which has not 5 been effectively removed from the employee's criminal record by 6 executive pardon, state court order, or operation of law. 7 (G) All management contracts entered into by the Tribe 8 regarding its gaming enterprise operated pursuant to this Compact 9 shall conform to all the requirements of IGRA, including 25 10 U.S.C. 2711, and tribal law. If the Tribe enters into a manage- 11 ment contract for the operation of any Class III gaming or compo- 12 nent thereof, the State shall be given 14 days' prior written 13 notice of such contract. 14 (H) All accounting records shall be kept on a double entry 15 system of accounting, maintaining detailed, supporting, subsid- 16 iary records. The Tribe shall maintain the following records for 17 not less than 3 years: 18 (1) Revenues, expenses, assets, liabilities and equity for 19 the location at which Class III gaming is conducted; 20 (2) Daily cash transactions for each Class III game at the 21 location at which gaming is conducted, including but not limited 22 to transactions relating to each gaming table bank, game drop box 23 and gaming room bank; 24 (3) All markers, IOUs, returned checks, hold checks or other 25 similar credit instruments; 26 (4) Individual and statistical game records (except card 27 games) to reflect statistical drop and statistical win; for 06365'98 41 1 electronic, computer, or other technologically assisted games, 2 analytic reports which show the total amount of cash wagered and 3 the total amount of prizes won; 4 (5) Contracts, correspondence and other transaction docu- 5 ments relating to all vendors and contractors; 6 (6) Records of all tribal gaming enforcement activities; 7 (7) Audits prepared by or on behalf of the Tribe; and 8 (8) Personnel information on all Class III gaming employees 9 or agents, including rotation sheets, hours worked, employee pro- 10 files and background checks. 11 (I) No person under the age of 18 may participate in any 12 Class III game. 13 (J) The Tribe shall not conduct any Class III gaming outside 14 of eligible Indian lands. 15 (K) The rules of each Class III card game shall be posted in 16 a prominent place in each card room and must designate: 17 (1) The maximum rake-off percentage, time buy-in or other 18 fee charged; 19 (2) The number of raises allowed; 20 (3) The monetary limit of each raise; 21 (4) The amount of ante; and 22 (5) Other rules as may be necessary. 23 (L) Upon the request of the State, the Tribe will provide to 24 the State the background information compiled by the Tribe on all 25 consultants (except legal counsel), management personnel, suppli- 26 ers and employees required to be licensed under 25 CFR Part 556 27 or the Tribe's gaming ordinance to allow the State to verify the 06365'98 42 1 Tribe's background information and to make an independent 2 determination as to suitability of these individuals, consistent 3 with the standards set forth in 4(D) herein. 4 (M) The regulatory requirements set forth in this section of 5 this Compact shall be administered and enforced as follows: 6 (1) The Tribe shall have responsibility to administer and 7 enforce the regulatory requirements. 8 (2) A representative authorized in writing by the Governor 9 of the State shall have the following right to inspect all tribal 10 Class III gaming facilities and all tribal records related to 11 Class III gaming, including those records set forth in 4(H) 12 herein, subject to the following conditions: 13 (a) With respect to public areas, at any time without prior 14 notice; 15 (b) With respect to private areas not accessible to the 16 public, at any time during normal business hours, with 12 hours 17 prior written notice; and 18 (c) With respect to inspection and copying of all tribal 19 records relating to Class III gaming, with 48 hours' prior writ- 20 ten notice, not including weekends. 21 (3) Except as otherwise provided by law or as also allowed 22 by the exceptions defined below, the State agrees to maintain in 23 confidence and never to disclose to any third party any financial 24 information, proprietary ideas, plans, methods, data, develop- 25 ment, inventions or other proprietary information regarding the 26 gambling enterprise of the Tribe, games conducted by the Tribe, 27 or the operation thereof which is provided to the State by the 06365'98 43 1 Tribe without the prior written approval of a duly authorized 2 representative of the Tribe, provided that the information is 3 marked as confidential information when received by the State. 4 Nothing contained in this 4(M)(3) shall be construed to 5 prohibit: 6 (a) The furnishing of any information to a law enforcement 7 or regulatory agency of the United States or State government 8 pursuant to a lawful request of such agency; 9 (b) The State from making known the names of persons, firms 10 or corporations conducting Class III gaming activities pursuant 11 to the terms of this Compact, locations at which such activities 12 are conducted or the dates on which such activities are con- 13 ducted; 14 (c) Publishing the terms of this Compact; 15 (d) Disclosing information as necessary to audit, investi- 16 gate, prosecute, or arbitrate violations of this Compact; 17 (e) Complying with any law, subpoena or court order. The 18 State shall immediately notify the Tribe of any request or demand 19 for the release of confidential information under this subsection 20 4(M)(3)(e) to allow the Tribe to initiate proceedings under 21 Section 7 of this Compact or other applicable law to resolve any 22 dispute regarding the State's intention to disclose such 23 information. 24 (4) The Tribe shall have the right to inspect State records 25 concerning all Class III gaming conducted by the Tribe consistent 26 with Michigan's Freedom of Information Act. 06365'98 44 1 (5) The Tribe shall reimburse the State for the actual costs 2 the State incurs in carrying out any functions authorized by the 3 terms of this Compact, in an amount not to exceed $50,000.00 per 4 annum, adjusted annually in accordance with the consumer price 5 index annual inflation index. All calculations of amounts due 6 shall be based upon a fiscal year beginning October 1, and ending 7 September 30, unless the parties select a different fiscal year. 8 Payments due the State shall be made no later than 60 days after 9 the beginning of each fiscal year. Payments due the State during 10 any partial fiscal year this Compact is in effect shall be 11 adjusted to reflect only that portion of the fiscal year. Within 12 60 days after each fiscal year in which this Compact is in 13 effect, the State shall submit to the Tribe an accounting of 14 actual costs incurred in carrying out any functions authorized by 15 the terms of this Compact. Any amount of said sums paid to the 16 State which are not expended by the State on said actual costs 17 shall be returned to the Tribe by the State within 60 days after 18 the fiscal year or treated as a pre-payment of the Tribe's obli- 19 gation during the subsequent fiscal year. 20 (6) In the event the State believes that the Tribe is not 21 administering and enforcing the regulatory requirements set forth 22 herein, it may invoke the procedures set forth in Section 7 of 23 this Compact. 24 (N) The Tribe shall comply with all applicable provisions of 25 the Bank Secrecy Act, P.L. 91-508, October 26, 1970, 31 26 U.S.C. 5311-5314. 06365'98 45 1 SECTION 5. Employee Benefits. 2 The Tribe shall provide to any employee who is employed in 3 conjunction with the operation of any gaming establishment at 4 which Class III gaming activities are operated pursuant to this 5 compact, such benefits to which the employee would be entitled by 6 virtue of the Michigan employment security act, 1936 (Ex Sess) PA 7 1, MCL 421.1 to 421.75, and the worker's disability compensation 8 act of 1969, 1969 PA 317, MCL 418.101 to 418.941, if his or her 9 employment services were provided to an employer engaged in a 10 business enterprise which is subject to, and covered by, the 11 respective Public Acts. 12 SECTION 6. Providers of Class III Gaming Equipment or 13 Supplies. 14 (A) No Class III games of chance, gaming equipment or sup- 15 plies may be purchased, leased or otherwise acquired by the Tribe 16 unless the Class III equipment or supplies meet the technical 17 equipment standards of either the State of Nevada or the State of 18 New Jersey. 19 (B) Prior to entering into any lease or purchase agreement, 20 the Tribe shall obtain sufficient information and identification 21 from the proposed seller or lessor and all persons holding any 22 direct or indirect financial interest in the lessor or the 23 lease/purchase agreement to permit the Tribe to conduct a back- 24 ground check on those persons. The Tribe shall not enter into 25 any lease or purchase agreement for Class III gaming equipment or 26 supplies with any person or entity if the lessor, seller, or any 27 manager or person holding direct or indirect financial interest 06365'98 46 1 in the lessor/seller or the proposed lease/purchase agreement, is 2 determined to have participated in or have involvement with orga- 3 nized crime or has been convicted of or entered a plea of guilty 4 or no contest to a gambling-related offense, fraud or misrepre- 5 sentation, or has been convicted of or entered a plea of guilty 6 or no contest to any other felony offense within the immediately 7 preceding 5 years, unless that person has been pardoned. 8 (C) The seller, lessor, manufacturer, or distributor shall 9 provide, assemble and install all Class III games of change, 10 gaming equipment, and supplies in a manner approved and licensed 11 by the Tribe. 12 SECTION 7. Dispute Resolution. 13 (A) In the event either party believes that the other party 14 has failed to comply with or has otherwise breached any provision 15 of this Compact, such party may invoke the following procedure: 16 (1) The party asserting noncompliance shall serve written 17 notice on the other party. The notice shall identify the spe- 18 cific Compact provision alleged to have been violated and shall 19 specify the factual and legal basis for the alleged 20 noncompliance. The notice shall specifically identify the type 21 of game or games, their location, and the date and time of the 22 alleged noncompliance. Representatives of the State and Tribe 23 shall thereafter meet within 30 days in an effort to resolve the 24 dispute. 25 (2) In the event an allegation by the State is not resolved 26 to the satisfaction of the State within 90 days after service of 27 the notice set forth in section 7(A)(1), the party may serve upon 06365'98 47 1 the office of the tribal Chairperson a notice to cease conduct of 2 the particular game(s) or activities alleged by the State to be 3 in noncompliance. Upon receipt of such notice, the Tribe may 4 elect to stop the game(s) or activities specified in the notice 5 or invoke arbitration and continue the game(s) or activities 6 pending the results of arbitration. The Tribe shall act upon one 7 of the foregoing options within 30 days of receipt of notice from 8 the State. Any arbitration under this authority shall be con- 9 ducted under the Commercial Arbitration rules of the American 10 Arbitration Association except that the arbitrators shall be 11 attorneys who are licensed members of the State Bar of Michigan, 12 or of the bar of another state, in good standing, and will be 13 selected by the State picking 1 arbitrator, the Tribe a second 14 arbitrator, and the 2 so chosen shall pick a third arbitrator. 15 If the third arbitrator is not chosen in this manner within 10 16 days after the second arbitrator is picked, the third arbitrator 17 will be chosen in accordance with the rules of the American 18 Arbitration Association. In the event an allegation by the Tribe 19 is not resolved to the satisfaction of the Tribe within 90 days 20 after service of the notice set forth in Section 7(A)(1), the 21 Tribe may invoke arbitration as specified above. 22 (3) All parties shall bear their own costs of arbitration 23 and attorney fees. 24 (B) Nothing in Section 7(A) shall be construed to waive, 25 limit or restrict any remedy which is otherwise available to 26 either party to enforce or resolve disputes concerning the 27 provisions of this Compact. Nothing in this Compact shall be 06365'98 48 1 deemed a waiver of the Tribe's sovereign immunity. Nothing in 2 this Compact shall be deemed a waiver of the State's sovereign 3 immunity. 4 SECTION 8. Notice to Patrons. 5 In the facility of the Tribe where Class III gaming is con- 6 ducted the Tribe shall post in a prominent position a Notice to 7 patrons at least 2 feet by 3 feet in dimension with the following 8 language: 9 NOTICE 10 THIS FACILITY IS REGULATED BY ONE OR MORE OF THE FOLLOWING: THE 11 NATIONAL INDIAN GAMING COMMISSION, BUREAU OF INDIAN AFFAIRS OF 12 THE U.S. DEPARTMENT OF THE INTERIOR AND THE GOVERNMENT OF THE 13 (Indian tribe)_________________________. 14 THIS FACILITY IS NOT REGULATED BY THE STATE OF MICHIGAN. 15 SECTION 9. Gaming Outside of Eligible Indian Lands. 16 An application to take land in trust for gaming purposes 17 outside of eligible Indian lands, as defined in Section 2(B) of 18 this Compact, shall not be submitted to the Secretary of the 19 Interior in the absence of a prior written agreement between the 20 Tribe and the State's other federally recognized Indian Tribes 21 that provides for each of the other Tribes to share in the reve- 22 nue of any gaming facility that is the subject of the application 23 to take lands in trust for gaming purposes outside of eligible 24 Indian lands. 25 SECTION 10. Regulation of the Sale of Alcoholic Beverages. 26 (A) The Tribe hereby adopts and applies to its Class III 27 gaming establishment as tribal law those State laws, relating to 06365'98 49 1 the sale and regulation of alcoholic beverages encompassing the 2 following areas: sale to a minor; sale to a visibly intoxicated 3 individual; sale of adulterated or misbranded liquor; hours of 4 operation; and similar substantive provisions. Said tribal laws, 5 which are defined by reference to the substantive areas of State 6 laws referred to above, shall apply to the tribal Class III 7 gaming establishment in the same manner and to the same extent as 8 such laws apply elsewhere in the State to off-reservation 9 transactions. 10 (B) The Tribe, for resale at its Class III gaming establish- 11 ment, shall purchase spirits from the Michigan liquor control 12 commission, and beer and wine from distributors licensed by the 13 Michigan liquor control commission, at the same price and on the 14 same basis that such beverages are purchased by Class C 15 licensees. 16 SECTION 11. Effective Date. 17 This Compact shall be effective immediately upon: 18 (A) Endorsement by the tribal chairperson and concurrence in 19 that endorsement by resolution of the Tribal Council; 20 (B) Endorsement by the Governor of the State and concurrence 21 in that endorsement or legislation of the Michigan Legislature; 22 (C) Approval by the Secretary of the Interior of the United 23 States; and 24 (D) Publication in the Federal Register. 25 SECTION 12. Binding Effect, Duration, and Severability. 26 (A) This Compact shall be binding upon the State and the 27 Tribe for a term of 20 years from the date it becomes effective 06365'98 50 1 unless modified or terminated by written agreement of both 2 parties. 3 (B) At least 1 year prior to the expiration of 20 years 4 after the Compact becomes effective, and thereafter at least 1 5 year prior to the expiration of such subsequent 5-year period, 6 either party may serve written notice on the other of its right 7 to renegotiate this Compact. The parties agree that 25 8 U.S.C. 2710(d)(3) through (8), or any successor provisions of 9 law, apply to successor compacts. 10 (C) In the event that either party gives written notice to 11 the other of its right to renegotiate this Compact pursuant to 12 subsection (B), the Tribe may, pursuant to the procedures of 13 IGRA, request the State to enter into negotiations for a succes- 14 sor compact governing the conduct of Class III gaming 15 activities. If the parties are unable to conclude a successor 16 compact, this Compact shall remain in full force and effect pend- 17 ing exhaustion of the administrative and judicial remedies set 18 forth in IGRA and/or any other applicable federal law. 19 (D) The Tribe may operate Class III gaming only while this 20 Compact or any renegotiated compact is in effect. 21 (E) In the event that any section or provision of this 22 Compact is disapproved by the Secretary of the Interior of the 23 United States or is held invalid by any court of competent juris- 24 diction, it is the intent of the parties that the remaining sec- 25 tions or provisions of this Compact, and any amendments thereto, 26 shall continue in full force and effect. This severability 27 provision does not apply to Sections 17 and 18 of this Compact. 06365'98 51 1 SECTION 13. Notice to Parties. 2 Unless otherwise indicated, all notices, payments, requests, 3 reports, information or demand which any party hereto may desire 4 or may be required to give to the other party hereto, shall be in 5 writing and shall be personally delivered or sent by first-class, 6 certified or registered United States Mail, postage prepaid, 7 return receipt requested, and sent to the other party at its 8 address appearing below or such other address as any party shall 9 hereinafter inform the other party hereto by written notice given 10 as aforesaid: 11 Notice to the Tribe shall be sent to: 12 Chairperson 13 ______________________________ 14 Tribe 15 ______________________________ 16 Tribe address 17 Notice to the State shall be sent to: 18 Governor's Office Office of Attorney 19 General 20 State of Michigan Treasury Building 21 P.O. Box 30013 First Floor 22 Lansing, MI 48909 Lansing, MI 48922 23 24 Every notice, payment, request, report, information or 25 demand so given shall be deemed effective upon receipt, or if 26 mailed, upon receipt or the expiration of the third day following 27 the day of mailing, whichever occurs first, except that any 28 notice of change of address shall be effective only upon receipt 29 by the party to whom said notice is addressed. 06365'98 52 1 SECTION 14. Entire Agreement. 2 This Compact is the entire agreement between the parties and 3 supersedes all prior agreements, whether written or oral, with 4 respect to the subject matter hereof. Neither this Compact nor 5 any provision herein may be changed, waived, discharged, or ter- 6 minated orally, but only by an instrument in writing signed by 7 the Tribe and the State. 8 SECTION 15. Filing of Compact with Secretary of State. 9 Upon the effective date of this Compact, a certified copy 10 shall be filed by the Governor with the Michigan Secretary of 11 State and a copy shall be transmitted to each house of the 12 Michigan State Legislature and the Michigan Attorney General. 13 Any subsequent amendment or modification of this Compact shall be 14 filed with the Michigan Secretary of State. 15 SECTION 16. Amendment. 16 This Compact may be amended by mutual agreement between the 17 Tribe and the State as follows: 18 (A) The Tribe or the State may propose amendments to the 19 Compact by providing the other party with written notice of the 20 proposed amendment as follows: 21 (i) The Tribe shall propose amendments pursuant to the 22 notice provisions of this Compact by submitting the proposed 23 amendments to the Governor who shall act for the State. 24 (ii) The State, acting through the Governor, shall propose 25 amendments by submitting the proposed amendments to the Tribe 26 pursuant to the notice provisions of this Compact. 06365'98 53 1 (B) The party receiving the proposed amendment shall advise 2 the requesting party within 30 days as follows: 3 (i) That the receiving party agrees to the proposed amend- 4 ment; or 5 (ii) That the receiving party rejects the proposed amendment 6 as submitted and agrees to meet concerning the subject of the 7 proposed amendment. 8 (C) Any amendment agreed to between the parties shall be 9 submitted to the Secretary of the Interior for approval pursuant 10 to the provisions of the IGRA. 11 (D) Upon the effective date of the amendment, a certified 12 copy shall be filed by the Governor with the Michigan Secretary 13 of State and a copy shall be transmitted to each house of the 14 Michigan Legislature and the Michigan Attorney General. 15 SECTION 17. Tribal Payments to State for Economic Benefits 16 of Exclusivity. 17 (A) The State and the Tribe have determined that it is in 18 the interests of the people of the State and the members of the 19 Tribe to maximize the economic benefits of Class III gaming for 20 the Tribe and to minimize the adverse effects of Class III gaming 21 by providing a mechanism to reduce the proliferation of Class III 22 gaming enterprises in the State in exchange for the Tribe provid- 23 ing important revenue to the State. 24 (B) So long as there is a binding Class III Compact in 25 effect between the State and Tribe and no change in State law is 26 enacted which is intended to permit or permits the operation of 27 electronic games of chance or commercial casino games by any 06365'98 54 1 other person (except a person operating such games in the City of 2 Detroit pursuant to the Michigan gaming control and revenue act, 3 Initiated Law of 1996, MCL 432.201 to 432.226) and no other 4 person (except a federally-recognized Indian Tribe operating pur- 5 suant to a valid Compact under IGRA or a person operating in the 6 City of Detroit pursuant to the Michigan gaming control and reve- 7 nue act, Initiated Law of 1996, MCL 432.201 to 432.226) within 8 the State lawfully operates electronic games of chance or commer- 9 cial casino games, the Tribe shall make payments to the State as 10 provided in Subsection (C). 11 (C) From and after the effective date of this Compact (as 12 determined pursuant to Section 11 of this Compact), and so long 13 as the conditions set forth in Subsection (B) remain in effect, 14 the Tribe will make semi-annual payments to the State as 15 follows: 16 (i) Payment to the Michigan Strategic Fund, or its successor 17 as determined by State law, in amount equal to 8% of the net win 18 at the casino derived from all Class III electronic games of 19 chance, as those games are defined in this Compact. 20 (ii) As used in this subsection, "net win" means the total 21 amount wagered on each electronic game of chance, minus the total 22 amount paid to players for winning wagers at such machines. 23 (iii) For purposes of these payments, all calculations of 24 amounts due shall be based upon a fiscal year beginning October 1 25 and ending September 30 of the following calendar year, unless 26 the parties agree on a different fiscal year, and all payments 27 due the State pursuant to the terms of this Section shall be paid 06365'98 55 1 no later than 60 days after October 1 and March 31 of each year. 2 Any payments due and owing from the Tribe in the year this 3 Compact is approved, or the final year the Compact is in force, 4 shall reflect the actual net win but only for the portion of the 5 year the Compact is in effect. 6 (D) The operation of electronic games of chance by persons 7 or entities other than federally-recognized Indian tribes pursu- 8 ant to a valid Compact under IGRA shall not violate the tribe's 9 exclusive right to operate such machines so long as such 10 machines: 11 (i) Reward a player only with the right to replay the device 12 at no additional costs; 13 (ii) Do not permit the accumulation of more than 15 replays 14 at any 1 time; 15 (iii) Allow the accumulated free replays to be discharged 16 only by activating the device for 1 additional play for each 17 accumulated free replay; and 18 (iv) Make no permanent record, directly or indirectly, of 19 the free replays awarded. 20 SECTION 18. Tribal Payments to Local Governments. 21 (A) From and after the effective date of this Compact (as 22 determined pursuant to Section 11 of this Compact), the Tribe 23 will make semi-annual payments to the treasurer for the county 24 described in paragraph (ii)(1) of this subsection 18(A) to be 25 held by said treasurer for and on behalf of the local revenue 26 sharing board described below, as follows: 06365'98 56 1 (i) Payment in the aggregate amount equal to 2% of the net 2 win at each casino derived from all Class III electronic games of 3 chance, as those games are defined in this Compact. The county 4 treasurer shall disburse the payments received as specified by 5 lawful vote of the local revenue sharing board. 6 (ii) It is the State's intent, in this and its other 7 Compacts with federally recognized tribes, that the payments to 8 local governments provided for in this section provide financial 9 resources to those political subdivisions of the State which 10 actually experience increased operating costs associated with the 11 operation of the Class III gaming facility. To this end, a local 12 revenue sharing board shall be created by those local governments 13 in the vicinity of the Class III gaming facility to receive and 14 disburse the semi-annual payments from the Tribe as described 15 below. Representatives of local governments in the vicinity of 16 the Class III gaming facility shall be appointed by their respec- 17 tive elected body and shall serve at the pleasure of such elected 18 body. The local revenue sharing board shall consist of represen- 19 tatives from each of the following jurisdictions: 20 (1) One representative from the county in which the Class 21 III gaming facility is located; 22 (2) One representative from the village, city, or township 23 in which the Class III gaming facility is located; 24 (3) One representative from a third local unit of government 25 determined by the representatives identified in sub-paragraphs 26 (1) and (2), above, to be most impacted by the Class III gaming 27 facility. 06365'98 57 1 The procedures for the functioning of the local revenue 2 sharing board, guidelines for establishments of criteria or a 3 formula for the distribution of revenues, and all other matters 4 not specified in this Compact, shall be determined by the local 5 revenue sharing board. Decisions of the local revenue sharing 6 board concerning the distribution of revenues shall require the 7 unanimous vote of the 3 representatives. The local revenue shar- 8 ing board's sole function shall be to determine and make alloca- 9 tions of the tribal payments for the purposes described and 10 subject to the limitations in subparagraphs (iii) to (v) below. 11 (iii) Of the payments made to local units of government, not 12 less than 1/8 of the aggregate payment described in subparagraph 13 (i) shall be paid to local public safety organizations for public 14 safety purposes. 15 (iv) Out of the aggregate payments to local units of govern- 16 ment, each local unit of government shall receive no less than an 17 amount equivalent to its share of ad valorem property taxes that 18 would otherwise be attributed to the Class III Gaming Facility if 19 that site were subject to such taxation. 20 (v) Out of the aggregate payments to local units of govern- 21 ment, after deducting the payment provided in subparagraphs (iii) 22 and (iv), the Board shall allocate an additional portion of such 23 payments to local units of government to offset the actual costs 24 incurred by such local units of government as a result of the 25 development of a Class III gaming facility in the vicinity. The 26 balance of such payments remaining after reimbursement of such 06365'98 58 1 actual costs may be utilized for any other lawful local 2 government purposes. 3 (vi) As used in this subsection, "net win" means the total 4 amount wagered on each electronic game of chance, minus the total 5 amount paid to players for winning wagers at such machines. 6 (vii) For purposes of these payments, all calculations of 7 amounts due shall be based upon a fiscal year beginning October 1 8 and ending September 30 of the following calendar year, unless 9 the parties agree on a different fiscal year, and all payments 10 due the local units of government pursuant to the terms of this 11 Section shall be paid no later than 60 days after October 1 and 12 March 31 of each year. Any payments due and owing from the Tribe 13 in the year this Compact is approved, or the final year the 14 Compact is in force, shall reflect the actual net win only for 15 the portion of the year the Compact is in effect. 16 Sec. 4. The compact between the Pokagon Band of Potawatomi 17 Indians and the state of Michigan providing for the conduct of 18 tribal class III gaming by the Pokagon Band of Potawatomi Indians 19 is hereby ratified and enacted into law and entered into by this 20 state as a party pursuant to section 11 of the compact and is 21 legally joined therein in form substantially as follows: 22 A COMPACT BETWEEN 23 THE POKAGON BAND OF POTAWATOMI INDIANS 24 AND 25 THE STATE OF MICHIGAN 26 PROVIDING FOR THE CONDUCT OF TRIBAL CLASS III GAMING 06365'98 59 1 BY THE 2 POKAGON BAND OF POTAWATOMI INDIANS 3 4 THIS COMPACT is made and entered into this 29th day of 5 January, 1997, by and between the Pokagon Band of Potawatomi 6 Indians (hereinafter referred to as "Tribe") and the STATE OF 7 MICHIGAN (hereinafter referred to as "State"). 8 RECITALS 9 WHEREAS, the State of Michigan is a sovereign State of the 10 United States of America, having been admitted to the Union pur- 11 suant to the Act of January 26, ch. 6, 1837, 5 Stat. 144 and is 12 authorized by its constitution to enter into contracts and agree- 13 ments, including this agreement with the Tribe; and 14 WHEREAS, the Tribe is a federally recognized Indian Tribe 15 and its governing body, the Tribal Council, is authorized by the 16 tribal constitution to enter into contracts and agreements of 17 every description, including this agreement with the State; and 18 WHEREAS, the Congress of the United States has enacted the 19 Indian Gaming Regulatory Act of 1988, Public Law 100-497, 102 20 Stat. 2467, (hereinafter "IGRA"), which permits Indian tribes to 21 operate Class III gaming activities on Indian reservations pursu- 22 ant to a tribal-state compact entered into for that purpose; and 23 WHEREAS, the Tribe proposes to operate a Class III gaming 24 establishment on eligible Indian lands in the State of Michigan, 25 and by Tribal Council Resolution and Tribal Ordinance will adopt 26 rules and regulations governing the games played and related 27 activities at the Class III gaming establishment; and 06365'98 60 1 WHEREAS, the State presently permits and regulates various 2 types of gaming within the State (but outside Indian lands), 3 including casino style charitable gaming such as craps, roulette, 4 and banking card games, as well as a lottery operating instant 5 scratch games, and "pick number" games, most of which would be 6 Class III games if conducted by the Tribe; and 7 WHEREAS, the Michigan Supreme Court in Automatic Music & 8 Vending Corp. v. Liquor Control Comm., 426 Mich 452, 396 NW2d 9 204 (1986); appeal dismissed, 481 U.S. 1009 (1987), and the 10 Michigan Court of Appeals in Primages Int'l of Michigan v. 11 Michigan, 199 Mich App 252, 501 NW2d 268 (1993), have held that 12 the statutory exception found at MCL 750.303(2) allows for the 13 play of electronic gaming devices, which includes computerized or 14 electronic games of chance, albeit subject to specified restric- 15 tions regarding the mode of play; and 16 WHEREAS, said casino style table games and electronic gaming 17 devices are, therefore, permitted "for any purpose by any person, 18 organization or entity," within the meaning of IGRA, 25 19 U.S.C. 2710(d)(1)(B); and 20 WHEREAS, at the general election held on November 5, 1996, 21 the electors adopted an initiated law which provides for a 22 licensing and regulatory system under which casino gambling may 23 be operated in the City of Detroit; and 24 WHEREAS, the State and 7 other federally-recognized Indian 25 tribes in the State have previously entered into substantially 26 similar Compacts for the conduct of Class III games; and 06365'98 61 1 WHEREAS, a compact between the Tribe and the State for the 2 conduct of Class III gaming satisfies the prerequisite, imposed 3 by the United States Congress by enactment of IGRA, for the oper- 4 ation of lawful Class III gaming by the Tribe on eligible Indian 5 lands in Michigan; and 6 WHEREAS, the State and the Tribe, in recognition of the sov- 7 ereign rights of each party and in a spirit of cooperation in the 8 interests of the citizens of the State and the members of the 9 Tribe, have engaged in good faith negotiations recognizing and 10 respecting the interests of each party and have agreed to this 11 Compact. 12 NOW THEREFORE, the Tribe and the State agree as follows: 13 SECTION 1. Purpose and Objectives. 14 The purpose and objectives of the Tribe and State in making 15 this Compact are as follows: 16 (A) To evidence the good will and cooperative spirit between 17 the State and the Tribe; 18 (B) To continue the development of effective working rela- 19 tionships between the State and tribal governments; 20 (C) To compact for Class III gaming on eligible Indian lands 21 of the Tribe in Michigan as authorized by IGRA; 22 (D) To fulfill the purpose and intent of IGRA by providing 23 for tribal gaming as a means of generating tribal revenues, 24 thereby promoting tribal economic development, tribal 25 self-sufficiency and strong tribal government; 06365'98 62 1 (E) To provide tribal revenues to fund tribal government 2 operations or programs, to provide for the general welfare of the 3 Tribe and its members and for other purposes allowed under IGRA; 4 (F) To provide for the operation of Class III gaming in 5 which, except as provided in 25 U.S.C. 2710(b)(4) and (d)(2)(A) 6 of IGRA, the Tribe shall have the sole proprietary interest and 7 be the primary beneficiary of the Tribe's gaming enterprise; 8 (G) To recognize the State's interest in the establishment 9 by the Tribe of rules for the regulation of Class III gaming 10 operated by the Tribe on eligible Indian lands; 11 (H) To recognize the State's interest in the establishment 12 by the Tribe of rules and procedures for ensuring the Class III 13 gaming is conducted fairly and honestly by the owners, operators, 14 and employees and by the patrons of any Class III gaming enter- 15 prise of the Tribe; and 16 (I) To establish procedures to notify the patrons of the 17 Tribe's Class III gaming establishment that the establishment is 18 not regulated by the State of Michigan and that patrons must look 19 to the tribal government or to the federal government to resolve 20 any issues or disputes with respect to the operations of the 21 establishment. 22 SECTION 2. Definitions. 23 For purposes of this Compact, the following definitions 24 pertain: 25 (A) "Class III gaming" means all forms of gaming authorized 26 by this Compact, which are neither Class I nor Class II gaming, 27 as such terms are defined in 2703(6) and (7) of IGRA. Only those 06365'98 63 1 Class III games authorized by this Compact may be played by the 2 Tribe. 3 (B)(1) "Eligible Indian Lands" means reservation lands 4 acquired under applicable federal law. A total of 1 tribal Class 5 III gaming facility may be located on Eligible Indian Lands; 6 Provided However, If any tribe which attains federal recognition 7 subsequent to the date of this Compact is granted the right, 8 under a valid Compact with the State of Michigan, to operate more 9 than 1 Class III gaming facility on its Indian lands, the Tribe 10 shall be afforded the same right subject to the same terms and 11 conditions imposed on such newly recognized tribe. 12 (2) Nothing in subsection 2(B) shall be construed to limit 13 the Tribe's ability to change the location of the Tribe's Class 14 III gaming facility within "Eligible Indian Lands". 15 (C) "Tribal Chairperson" means the duly elected Chairperson 16 of the Board of Directors or Tribal Council of the Tribe. 17 (D) "Person" means a business, individual, proprietorship, 18 firm, partnership, joint venture, syndicate, trust, labor organi- 19 zation, company, corporation, association, committee, state, 20 local government, government instrumentality or entity, or any 21 other organization or group of persons acting jointly. 22 SECTION 3. Authorized Class III Games. 23 (A) The Tribe may lawfully conduct the following Class III 24 games on eligible Indian lands: 25 (1) Craps and related dice games; 26 (2) Wheel games, including "Big Wheel" and related games; 06365'98 64 1 (3) Roulette; 2 (4) Banking card games that are not otherwise treated as 3 Class II gaming in Michigan pursuant to 25 U.S.C. 2703(7)(C), and 4 non-banking card games played by any Michigan tribe on or before 5 May 1, 1988; 6 (5) Electronic games of chance featuring coin drop and 7 payout as well as printed tabulations, whereby the software of 8 the device predetermines the presence or lack of a winning combi- 9 nation and payout. Electronic games of chance are defined as a 10 microprocessor-controlled electronic device which allows a player 11 to play games of chance, which may be affected by an element of 12 skill, activated by the insertion of a coin or currency, or by 13 the use of a credit, and awards game credits, cash, tokens, or 14 replays, or a written statement of the player's accumulated cred- 15 its, which written statements are redeemable for cash; 16 (6) Keno; 17 (7) Any other Class III game that lawfully may be operated 18 by a person licensed to operate a casino pursuant to the Michigan 19 gaming control and revenue act, Initiated Law of 1996, MCL 20 432.201 to 432.226; and 21 (8) Games that lawfully may be conducted pursuant to sec- 22 tions 303a and 310a of the Michigan penal code, 1931 PA 328, MCL 23 750.303a and 750.310a. 24 This Compact shall apply to card games that are considered 25 to be Class II games pursuant to 25 U.S.C. 2703(7)(C) only if 26 those games are expanded beyond their "nature and scope" as it 27 existed before May 1, 1988, and only to the extent of such 06365'98 65 1 expansion. The term "nature and scope" shall be interpreted 2 consistent with IGRA, the legislative history of IGRA, any appli- 3 cable decisions of the courts of the United States and any appli- 4 cable regulations of the National Indian Gaming Commission. 5 Any limitations on the number of games operated or played, 6 their location within eligible Indian lands as defined under this 7 Compact, hours or period of operation, limits on wagers or pot 8 size, or other such limitations shall be determined by duly 9 enacted tribal law or regulation. Any state law restrictions, 10 limitations or regulation of such gaming shall not apply to Class 11 III games conducted by the Tribe pursuant to this Compact. 12 (B) Additional Class III games may be lawfully conducted by 13 mutual agreement of the Tribe and the State as follows: 14 (1) The Tribe shall request additional games by letter from 15 the tribal Chairperson on behalf of the Tribe to the Governor on 16 behalf of the State. The request shall identify the additional 17 proposed gaming activities with specificity and any proposed 18 amendments to the Tribe's regulatory ordinance. 19 (2) The state acting through the Governor shall take action 20 on the Tribe's request within 90 days after receipt. The 21 Governor's action shall be based on the following: 22 (a) Whether the proposed gaming activities are permitted in 23 the State of Michigan for any purpose by any person, organization 24 or entity; and 25 (b) Whether the provisions of this Compact are adequate to 26 fulfill the policies and purposes set forth in the IGRA with 27 respect to such additional games. 06365'98 66 1 SECTION 4. Regulation of Class III Gaming. 2 (A) Prior to permitting the initiation of any Class III 3 gaming on eligible Indian lands, the Tribe will enact a compre- 4 hensive gaming regulatory ordinance governing all aspects of the 5 Tribe's gaming enterprise. The requirements of this Section 4 6 are intended to supplement, rather than conflict with the provi- 7 sions of the Tribe's ordinance. To the extent any regulatory 8 requirement of this Compact is more stringent or restrictive than 9 a parallel provision of the Tribe's ordinance, as now or hereaf- 10 ter amended, this Compact shall control. 11 (B) The regulatory requirements of this Section 4 shall 12 apply to the conduct of all Class III gaming authorized by the 13 Compact. At all times in which it conducts any Class III gaming 14 under this Compact, the Tribe shall maintain, as part of its law- 15 fully enacted ordinances, requirements at least as restrictive as 16 those set forth herein. 17 (C) The Tribe shall license, operate, and regulate all Class 18 III gaming activities pursuant to this Compact, tribal law, IGRA, 19 and all other applicable federal law. This shall include but not 20 be limited to the licensing of consultants (except legal 21 counsel), primary management officials, and key officials of each 22 Class III gaming activity or operation. Any violation of this 23 Compact, tribal law, IGRA, or other applicable federal law shall 24 be corrected immediately by the Tribe. 25 (D) The Tribe may not license, hire, or employ as a key 26 employee or primary management official as those terms are 06365'98 67 1 defined at 25 CFR 502.14 and 502.19, in connection with Class III 2 gaming, any person who: 3 (1) Is under the age of 18; or 4 (2) Has been convicted of or entered a plea of guilty or no 5 contest to a gambling-related offense, fraud or misrepresenta- 6 tion; or 7 (3) Has been convicted of or entered a plea of guilty or no 8 contest to any offense not specified in subparagraph (2) within 9 the immediately preceding 5 years; this provision shall not apply 10 if that person has been pardoned by the Governor of the State 11 where the conviction occurred or, if a tribal member, has been 12 determined by the Tribe to be a person who is not likely again to 13 engage in any offensive or criminal course of conduct and the 14 public good does not require that the applicant be denied a 15 license as a key employee or primary management official; or 16 (4) Is determined by the Tribe to have participated in orga- 17 nized crime or unlawful gambling or whose prior activities, crim- 18 inal records, reputation, habits, and/or associations pose a 19 threat to the public interest or to the effective regulation and 20 control of gaming, or create or enhance the dangers of unsuit- 21 able, unfair, or illegal practices, methods and activities in the 22 conduct of gaming or to the carrying on of the business and 23 financial arrangements incidental to the conduct of gaming. 24 (E) The terms "fraud or misrepresentation," as used in 25 subsection (D)(2), shall mean a criminal offense committed in 26 Michigan or any other jurisdiction, involving, theft, fraud or 27 misrepresentation, which is a felony or would be a felony if 06365'98 68 1 committed in Michigan, and which was committed as an adult or 2 prosecuted as an adult offense, and which has not been effec- 3 tively removed from the employee's criminal record by executive 4 pardon, state court order, or operation of law. 5 (F) The term "any offense," as used in subsection (D)(3), 6 shall mean any criminal offense not described in 7 subsection (D)(2), whether committed in this state or any other 8 jurisdiction, that is, or would be, a crime under the provisions 9 of the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, or 10 the controlled substance provisions of the public health code, 11 1978 PA 368, MCL 333.7101 to 333.7545, or any other criminal 12 offense not specified in subparagraph (2) involving theft, dis- 13 honesty, fraud or misrepresentation arising under the law of 14 Michigan or another state or jurisdiction, that was committed as 15 an adult or prosecuted as an adult offense, and which has not 16 been effectively removed from the employee's criminal record by 17 executive pardon, state court order, or operation of law. 18 (G) All management contracts entered into by the Tribe 19 regarding its gaming enterprise operated pursuant to this Compact 20 shall conform to all the requirements of IGRA, including 25 21 U.S.C. 2711, and tribal law. If the Tribe enters into a manage- 22 ment contract for the operation of any Class III gaming or compo- 23 nent thereof, the State shall be given 14 days' prior written 24 notice of such contract. 25 (H) All accounting records shall be kept on a double entry 26 system of accounting, maintaining detailed, supporting, 06365'98 69 1 subsidiary records. The Tribe shall maintain the following 2 records for not less than 3 years: 3 (1) Revenues, expenses, assets, liabilities and equity for 4 the location at which Class III gaming is conducted; 5 (2) Daily cash transactions for each Class III game at the 6 location at which gaming is conducted, including but not limited 7 to transactions relating to each gaming table bank, game drop box 8 and gaming room bank; 9 (3) All markers, IOUs, returned checks, hold checks or other 10 similar credit instruments; 11 (4) Individual and statistical game records (except card 12 games) to reflect statistical drop and statistical win; for elec- 13 tronic, computer, or other technologically assisted games, ana- 14 lytic reports which show the total amount of cash wagered and the 15 total amount of prizes won; 16 (5) Contracts, correspondence and other transaction docu- 17 ments relating to all vendors and contractors; 18 (6) Records of all tribal gaming enforcement activities; 19 (7) Audits prepared by or on behalf of the Tribe; and 20 (8) Personnel information on all Class III gaming employees 21 or agents, including rotation sheets, hours worked, employee pro- 22 files and background checks. 23 (I) No person under the age of 18 may participate in any 24 Class III game. 25 (J) The Tribe shall not conduct any Class III gaming outside 26 of eligible Indian lands. 06365'98 70 1 (K) The rules of each Class III card game shall be posted in 2 a prominent place in each card room and must designate: 3 (1) The maximum rake-off percentage, time buy-in or other 4 fee charged; 5 (2) The number of raises allowed; 6 (3) The monetary limit of each raise; 7 (4) The amount of ante; and 8 (5) Other rules as may be necessary. 9 (L) Upon the request of the State, the Tribe will provide to 10 the State the background information compiled by the Tribe on all 11 consultants (except legal counsel), management personnel, suppli- 12 ers and employees required to be licensed under 25 CFR Part 556 13 or the Tribe's gaming ordinance to allow the State to verify the 14 Tribe's background information and to make an independent deter- 15 mination as to suitability of these individuals, consistent with 16 the standards set forth in 4(D) herein. 17 (M) The regulatory requirements set forth in this section of 18 this Compact shall be administered and enforced as follows: 19 (1) The Tribe shall have responsibility to administer and 20 enforce the regulatory requirements. 21 (2) A representative authorized in writing by the Governor 22 of the State shall have the following right to inspect all tribal 23 Class III gaming facilities and all tribal records related to 24 Class III gaming, including those records set forth in 4(H) 25 herein, subject to the following conditions: 26 (a) With respect to public areas, at any time without prior 27 notice; 06365'98 71 1 (b) With respect to private areas not accessible to the 2 public, at any time during normal business hours, with 12 hours 3 prior written notice; and 4 (c) With respect to inspection and copying of all tribal 5 records relating to Class III gaming, with 48 hours' prior writ- 6 ten notice, not including weekends. 7 (3) Except as otherwise provided by law or as also allowed 8 by the exceptions defined below, the State agrees to maintain in 9 confidence and never to disclose to any third party any financial 10 information, proprietary ideas, plans, methods, data, develop- 11 ment, inventions or other proprietary information regarding the 12 gambling enterprise of the Tribe, games conducted by the Tribe, 13 or the operation thereof which is provided to the State by the 14 Tribe without the prior written approval of a duly authorized 15 representative of the Tribe, provided that the information is 16 marked as confidential information when received by the State. 17 Nothing contained in this 4(M)(3) shall be construed to 18 prohibit: 19 (a) The furnishing of any information to a law enforcement 20 or regulatory agency of the United States or State government 21 pursuant to a lawful request of such agency; 22 (b) The State from making known the names of persons, firms 23 or corporations conducting Class III gaming activities pursuant 24 to the terms of this Compact, locations at which such activities 25 are conducted or the dates on which such activities are con- 26 ducted; 06365'98 72 1 (c) Publishing the terms of this Compact; 2 (d) Disclosing information as necessary to audit, 3 investigate, prosecute, or arbitrate violations of this Compact; 4 (e) Complying with any law, subpoena or court order. The 5 State shall immediately notify the Tribe of any request or demand 6 for the release of confidential information under this subsection 7 4(M)(3)(e) to allow the Tribe to initiate proceedings under 8 Section 7 of this Compact or other applicable law to resolve any 9 dispute regarding the State's intention to disclose such 10 information. 11 (4) The Tribe shall have the right to inspect State records 12 concerning all Class III gaming conducted by the Tribe consistent 13 with Michigan's Freedom of Information Act. 14 (5) The Tribe shall reimburse the State for the actual costs 15 the State incurs in carrying out any functions authorized by the 16 terms of this Compact, in an amount not to exceed $50,000.00 per 17 annum, adjusted annually in accordance with the consumer price 18 index annual inflation index. All calculations of amounts due 19 shall be based upon a fiscal year beginning October 1, and ending 20 September 30, unless the parties select a different fiscal year. 21 Payments due the State shall be made no later than 60 days after 22 the beginning of each fiscal year. Payments due the State during 23 any partial fiscal year this Compact is in effect shall be 24 adjusted to reflect only that portion of the fiscal year. Within 25 60 days after each fiscal year in which this Compact is in 26 effect, the State shall submit to the Tribe an accounting of 27 actual costs incurred in carrying out any functions authorized by 06365'98 73 1 the terms of this Compact. Any amount of said sums paid to the 2 State which are not expended by the State on said actual costs 3 shall be returned to the Tribe by the State within 60 days after 4 the fiscal year or treated as a pre-payment of the Tribe's obli- 5 gation during the subsequent fiscal year. 6 (6) In the event the State believes that the Tribe is not 7 administering and enforcing the regulatory requirements set forth 8 herein, it may invoke the procedures set forth in Section 7 of 9 this Compact. 10 (N) The Tribe shall comply with all applicable provisions of 11 the Bank Secrecy Act, P.L. 91-508, October 26, 1970, 31 12 U.S.C. 5311-5314. 13 SECTION 5. Employee Benefits. 14 The Tribe shall provide to any employee who is employed in 15 conjunction with the operation of any gaming establishment at 16 which Class III gaming activities are operated pursuant to this 17 compact, such benefits to which the employee would be entitled by 18 virtue of the Michigan employment security act, 1936 (Ex Sess) PA 19 1, MCL 421.1 to 421.75, and the worker's disability compensation 20 act of 1969, 1969 PA 317, MCL 418.101 to 418.941, if his or her 21 employment services were provided to an employer engaged in a 22 business enterprise which is subject to, and covered by, the 23 respective Public Acts. 24 SECTION 6. Providers of Class III Gaming Equipment or 25 Supplies. 26 (A) No Class III games of chance, gaming equipment or 27 supplies may be purchased, leased or otherwise acquired by the 06365'98 74 1 Tribe unless the Class III equipment or supplies meet the 2 technical equipment standards of either the State of Nevada or 3 the State of New Jersey. 4 (B) Prior to entering into any lease or purchase agreement, 5 the Tribe shall obtain sufficient information and identification 6 from the proposed seller or lessor and all persons holding any 7 direct or indirect financial interest in the lessor or the 8 lease/purchase agreement to permit the Tribe to conduct a back- 9 ground check on those persons. The Tribe shall not enter into 10 any lease or purchase agreement for Class III gaming equipment or 11 supplies with any person or entity if the lessor, seller, or any 12 manager or person holding direct or indirect financial interest 13 in the lessor/seller or the proposed lease/purchase agreement, is 14 determined to have participated in or have involvement with orga- 15 nized crime or has been convicted of or entered a plea of guilty 16 or no contest to a gambling-related offense, fraud or misrepre- 17 sentation, or has been convicted of or entered a plea of guilty 18 or no contest to any other felony offense within the immediately 19 preceding 5 years, unless that person has been pardoned. 20 (C) The seller, lessor, manufacturer, or distributor shall 21 provide, assemble and install all Class III games of change, 22 gaming equipment, and supplies in a manner approved and licensed 23 by the Tribe. 24 SECTION 7. Dispute Resolution. 25 (A) In the event either party believes that the other party 26 has failed to comply with or has otherwise breached any provision 27 of this Compact, such party may invoke the following procedure: 06365'98 75 1 (1) The party asserting noncompliance shall serve written 2 notice on the other party. The notice shall identify the spe- 3 cific Compact provision alleged to have been violated and shall 4 specify the factual and legal basis for the alleged 5 noncompliance. The notice shall specifically identify the type 6 of game or games, their location, and the date and time of the 7 alleged noncompliance. Representatives of the State and Tribe 8 shall thereafter meet within 30 days in an effort to resolve the 9 dispute. 10 (2) In the event an allegation by the State is not resolved 11 to the satisfaction of the State within 90 days after service of 12 the notice set forth in section 7(A)(1), the party may serve upon 13 the office of the tribal Chairperson a notice to cease conduct of 14 the particular game(s) or activities alleged by the State to be 15 in noncompliance. Upon receipt of such notice, the Tribe may 16 elect to stop the game(s) or activities specified in the notice 17 or invoke arbitration and continue the game(s) or activities 18 pending the results of arbitration. The Tribe shall act upon one 19 of the foregoing options within 30 days of receipt of notice from 20 the State. Any arbitration under this authority shall be con- 21 ducted under the Commercial Arbitration rules of the American 22 Arbitration Association except that the arbitrators shall be 23 attorneys who are licensed members of the State Bar of Michigan, 24 or of the bar of another state, in good standing, and will be 25 selected by the State picking 1 arbitrator, the Tribe a second 26 arbitrator, and the 2 so chosen shall pick a third arbitrator. 27 If the third arbitrator is not chosen in this manner within 10 06365'98 76 1 days after the second arbitrator is picked, the third arbitrator 2 will be chosen in accordance with the rules of the American 3 Arbitration Association. In the event an allegation by the Tribe 4 is not resolved to the satisfaction of the Tribe within 90 days 5 after service of the notice set forth in Section 7(A)(1), the 6 Tribe may invoke arbitration as specified above. 7 (3) All parties shall bear their own costs of arbitration 8 and attorney fees. 9 (B) Nothing in Section 7(A) shall be construed to waive, 10 limit or restrict any remedy which is otherwise available to 11 either party to enforce or resolve disputes concerning the provi- 12 sions of this Compact. Nothing in this Compact shall be deemed a 13 waiver of the Tribe's sovereign immunity. Nothing in this 14 Compact shall be deemed a waiver of the State's sovereign 15 immunity. 16 SECTION 8. Notice to Patrons. 17 In the facility of the Tribe where Class III gaming is con- 18 ducted the Tribe shall post in a prominent position a Notice to 19 patrons at least 2 feet by 3 feet in dimension with the following 20 language: 21 NOTICE 22 THIS FACILITY IS REGULATED BY ONE OR MORE OF THE FOLLOWING: THE 23 NATIONAL INDIAN GAMING COMMISSION, BUREAU OF INDIAN AFFAIRS OF 24 THE U.S. DEPARTMENT OF THE INTERIOR AND THE GOVERNMENT OF THE 25 (Indian tribe)_________________________. 26 THIS FACILITY IS NOT REGULATED BY THE STATE OF MICHIGAN. 06365'98 77 1 SECTION 9. Gaming Outside of Eligible Indian Lands. 2 An application to take land in trust for gaming purposes 3 outside of eligible Indian lands, as defined in Section 2(B) of 4 this Compact, shall not be submitted to the Secretary of the 5 Interior in the absence of a prior written agreement between the 6 Tribe and the State's other federally recognized Indian Tribes 7 that provides for each of the other Tribes to share in the reve- 8 nue of any gaming facility that is the subject of the application 9 to take lands in trust for gaming purposes outside of eligible 10 Indian lands. 11 SECTION 10. Regulation of the Sale of Alcoholic Beverages. 12 (A) The Tribe hereby adopts and applies to its Class III 13 gaming establishment as tribal law those State laws, relating to 14 the sale and regulation of alcoholic beverages encompassing the 15 following areas: sale to a minor; sale to a visibly intoxicated 16 individual; sale of adulterated or misbranded liquor; hours of 17 operation; and similar substantive provisions. Said tribal laws, 18 which are defined by reference to the substantive areas of State 19 laws referred to above, shall apply to the tribal Class III 20 gaming establishment in the same manner and to the same extent as 21 such laws apply elsewhere in the State to off-reservation 22 transactions. 23 (B) The Tribe, for resale at its Class III gaming establish- 24 ment, shall purchase spirits from the Michigan liquor control 25 commission, and beer and wine from distributors licensed by the 26 Michigan liquor control commission, at the same price and on the 06365'98 78 1 same basis that such beverages are purchased by Class C 2 licensees. 3 SECTION 11. Effective Date. 4 This Compact shall be effective immediately upon: 5 (A) Endorsement by the tribal chairperson and concurrence in 6 that endorsement by resolution of the Tribal Council; 7 (B) Endorsement by the Governor of the State and concurrence 8 in that endorsement or legislation of the Michigan Legislature; 9 (C) Approval by the Secretary of the Interior of the United 10 States; and 11 (D) Publication in the Federal Register. 12 SECTION 12. Binding Effect, Duration, and Severability. 13 (A) This Compact shall be binding upon the State and the 14 Tribe for a term of 20 years from the date it becomes effective 15 unless modified or terminated by written agreement of both 16 parties. 17 (B) At least 1 year prior to the expiration of 20 years 18 after the Compact becomes effective, and thereafter at least 1 19 year prior to the expiration of such subsequent 5-year period, 20 either party may serve written notice on the other of its right 21 to renegotiate this Compact. The parties agree that 25 22 U.S.C. 2710(d)(3) through (8), or any successor provisions of 23 law, apply to successor compacts. 24 (C) In the event that either party gives written notice to 25 the other of its right to renegotiate this Compact pursuant to 26 subsection (B), the Tribe may, pursuant to the procedures of 27 IGRA, request the State to enter into negotiations for a 06365'98 79 1 successor compact governing the conduct of Class III gaming 2 activities. If the parties are unable to conclude a successor 3 compact, this Compact shall remain in full force and effect pend- 4 ing exhaustion of the administrative and judicial remedies set 5 forth in IGRA and/or any other applicable federal law. 6 (D) The Tribe may operate Class III gaming only while this 7 Compact or any renegotiated compact is in effect. 8 (E) In the event that any section or provision of this 9 Compact is disapproved by the Secretary of the Interior of the 10 United States or is held invalid by any court of competent juris- 11 diction, it is the intent of the parties that the remaining sec- 12 tions or provisions of this Compact, and any amendments thereto, 13 shall continue in full force and effect. This severability pro- 14 vision does not apply to Sections 17 and 18 of this Compact. 15 SECTION 13. Notice to Parties. 16 Unless otherwise indicated, all notices, payments, requests, 17 reports, information or demand which any party hereto may desire 18 or may be required to give to the other party hereto, shall be in 19 writing and shall be personally delivered or sent by first-class, 20 certified or registered United States Mail, postage prepaid, 21 return receipt requested, and sent to the other party at its 22 address appearing below or such other address as any party shall 23 hereinafter inform the other party hereto by written notice given 24 as aforesaid: 25 Notice to the Tribe shall be sent to: 26 Chairperson 06365'98 80 1 ______________________________ 2 Tribe 3 ______________________________ 4 Tribe address 5 Notice to the State shall be sent to: 6 Governor's Office Office of Attorney 7 General 8 State of Michigan Treasury Building 9 P.O. Box 30013 First Floor 10 Lansing, MI 48909 Lansing, MI 48922 11 12 Every notice, payment, request, report, information or 13 demand so given shall be deemed effective upon receipt, or if 14 mailed, upon receipt or the expiration of the third day following 15 the day of mailing, whichever occurs first, except that any 16 notice of change of address shall be effective only upon receipt 17 by the party to whom said notice is addressed. 18 SECTION 14. Entire Agreement. 19 This Compact is the entire agreement between the parties and 20 supersedes all prior agreements, whether written or oral, with 21 respect to the subject matter hereof. Neither this Compact nor 22 any provision herein may be changed, waived, discharged, or ter- 23 minated orally, but only by an instrument in writing signed by 24 the Tribe and the State. 25 SECTION 15. Filing of Compact with Secretary of State. 26 Upon the effective date of this Compact, a certified copy 27 shall be filed by the Governor with the Michigan Secretary of 28 State and a copy shall be transmitted to each house of the 29 Michigan State Legislature and the Michigan Attorney General. 06365'98 81 1 Any subsequent amendment or modification of this Compact shall be 2 filed with the Michigan Secretary of State. 3 SECTION 16. Amendment. 4 This Compact may be amended by mutual agreement between the 5 Tribe and the State as follows: 6 (A) The Tribe or the State may propose amendments to the 7 Compact by providing the other party with written notice of the 8 proposed amendment as follows: 9 (i) The Tribe shall propose amendments pursuant to the 10 notice provisions of this Compact by submitting the proposed 11 amendments to the Governor who shall act for the State. 12 (ii) The State, acting through the Governor, shall propose 13 amendments by submitting the proposed amendments to the Tribe 14 pursuant to the notice provisions of this Compact. 15 (B) The party receiving the proposed amendment shall advise 16 the requesting party within 30 days as follows: 17 (i) That the receiving party agrees to the proposed amend- 18 ment; or 19 (ii) That the receiving party rejects the proposed amendment 20 as submitted and agrees to meet concerning the subject of the 21 proposed amendment. 22 (C) Any amendment agreed to between the parties shall be 23 submitted to the Secretary of the Interior for approval pursuant 24 to the provisions of the IGRA. 25 (D) Upon the effective date of the amendment, a certified 26 copy shall be filed by the Governor with the Michigan Secretary 06365'98 82 1 of State and a copy shall be transmitted to each house of the 2 Michigan Legislature and the Michigan Attorney General. 3 SECTION 17. Tribal Payments to State for Economic Benefits 4 of Exclusivity. 5 (A) The State and the Tribe have determined that it is in 6 the interests of the people of the State and the members of the 7 Tribe to maximize the economic benefits of Class III gaming for 8 the Tribe and to minimize the adverse effects of Class III gaming 9 by providing a mechanism to reduce the proliferation of Class III 10 gaming enterprises in the State in exchange for the Tribe provid- 11 ing important revenue to the State. 12 (B) So long as there is a binding Class III Compact in 13 effect between the State and Tribe and no change in State law is 14 enacted which is intended to permit or permits the operation of 15 electronic games of chance or commercial casino games by any 16 other person (except a person operating such games in the City of 17 Detroit pursuant to the Michigan gaming control and revenue act, 18 Initiated Law of 1996, MCL 432.201 to 432.226) and no other 19 person (except a federally-recognized Indian Tribe operating pur- 20 suant to a valid Compact under IGRA or a person operating in the 21 City of Detroit pursuant to the Michigan gaming control and reve- 22 nue act, Initiated Law of 1996, MCL 432.201 to 432.226) within 23 the State lawfully operates electronic games of chance or commer- 24 cial casino games, the Tribe shall make payments to the State as 25 provided in Subsection (C). 26 (C) From and after the effective date of this Compact (as 27 determined pursuant to Section 11 of this Compact), and so long 06365'98 83 1 as the conditions set forth in Subsection (B) remain in effect, 2 the Tribe will make semi-annual payments to the State as 3 follows: 4 (i) Payment to the Michigan Strategic Fund, or its successor 5 as determined by State law, in amount equal to 8% of the net win 6 at the casino derived from all Class III electronic games of 7 chance, as those games are defined in this Compact. 8 (ii) As used in this subsection, "net win" means the total 9 amount wagered on each electronic game of chance, minus the total 10 amount paid to players for winning wagers at such machines. 11 (iii) For purposes of these payments, all calculations of 12 amounts due shall be based upon a fiscal year beginning October 1 13 and ending September 30 of the following calendar year, unless 14 the parties agree on a different fiscal year, and all payments 15 due the State pursuant to the terms of this Section shall be paid 16 no later than 60 days after October 1 and March 31 of each year. 17 Any payments due and owing from the Tribe in the year this 18 Compact is approved, or the final year the Compact is in force, 19 shall reflect the actual net win but only for the portion of the 20 year the Compact is in effect. 21 (D) The operation of electronic games of chance by persons 22 or entities other than federally-recognized Indian tribes pursu- 23 ant to a valid Compact under IGRA shall not violate the tribe's 24 exclusive right to operate such machines so long as such 25 machines: 26 (i) Reward a player only with the right to replay the device 27 at no additional costs; 06365'98 84 1 (ii) Do not permit the accumulation of more than 15 replays 2 at any 1 time; 3 (iii) Allow the accumulated free replays to be discharged 4 only by activating the device for 1 additional play for each 5 accumulated free replay; and 6 (iv) Make no permanent record, directly or indirectly, of 7 the free replays awarded. 8 SECTION 18. Tribal Payments to Local Governments. 9 (A) From and after the effective date of this Compact (as 10 determined pursuant to Section 11 of this Compact), the Tribe 11 will make semi-annual payments to the treasurer for the county 12 described in paragraph (ii)(1) of this subsection 18(A) to be 13 held by said treasurer for and on behalf of the local revenue 14 sharing board described below, as follows: 15 (i) Payment in the aggregate amount equal to 2% of the net 16 win at each casino derived from all Class III electronic games of 17 chance, as those games are defined in this Compact. The county 18 treasurer shall disburse the payments received as specified by 19 lawful vote of the local revenue sharing board. 20 (ii) It is the State's intent, in this and its other 21 Compacts with federally recognized tribes, that the payments to 22 local governments provided for in this section provide financial 23 resources to those political subdivisions of the State which 24 actually experience increased operating costs associated with the 25 operation of the Class III gaming facility. To this end, a local 26 revenue sharing board shall be created by those local governments 27 in the vicinity of the Class III gaming facility to receive and 06365'98 85 1 disburse the semi-annual payments from the Tribe as described 2 below. Representatives of local governments in the vicinity of 3 the Class III gaming facility shall be appointed by their respec- 4 tive elected body and shall serve at the pleasure of such elected 5 body. The local revenue sharing board shall consist of represen- 6 tatives from each of the following jurisdictions: 7 (1) One representative from the county in which the Class 8 III gaming facility is located; 9 (2) One representative from the village, city, or township 10 in which the Class III gaming facility is located; 11 (3) One representative from a third local unit of government 12 determined by the representatives identified in sub-paragraphs 13 (1) and (2), above, to be most impacted by the Class III gaming 14 facility. 15 The procedures for the functioning of the local revenue 16 sharing board, guidelines for establishments of criteria or a 17 formula for the distribution of revenues, and all other matters 18 not specified in this Compact, shall be determined by the local 19 revenue sharing board. Decisions of the local revenue sharing 20 board concerning the distribution of revenues shall require the 21 unanimous vote of the 3 representatives. The local revenue shar- 22 ing board's sole function shall be to determine and make alloca- 23 tions of the tribal payments for the purposes described and 24 subject to the limitations in subparagraphs (iii) to (v) below. 25 (iii) Of the payments made to local units of government, not 26 less than 1/8 of the aggregate payment described in subparagraph 06365'98 86 1 (i) shall be paid to local public safety organizations for public 2 safety purposes. 3 (iv) Out of the aggregate payments to local units of govern- 4 ment, each local unit of government shall receive no less than an 5 amount equivalent to its share of ad valorem property taxes that 6 would otherwise be attributed to the Class III Gaming Facility if 7 that site were subject to such taxation. 8 (v) Out of the aggregate payments to local units of govern- 9 ment, after deducting the payment provided in subparagraphs (iii) 10 and (iv), the Board shall allocate an additional portion of such 11 payments to local units of government to offset the actual costs 12 incurred by such local units of government as a result of the 13 development of a Class III gaming facility in the vicinity. The 14 balance of such payments remaining after reimbursement of such 15 actual costs may be utilized for any other lawful local govern- 16 ment purposes. 17 (vi) As used in this subsection, "net win" means the total 18 amount wagered on each electronic game of chance, minus the total 19 amount paid to players for winning wagers at such machines. 20 (vii) For purposes of these payments, all calculations of 21 amounts due shall be based upon a fiscal year beginning October 1 22 and ending September 30 of the following calendar year, unless 23 the parties agree on a different fiscal year, and all payments 24 due the local units of government pursuant to the terms of this 25 Section shall be paid no later than 60 days after October 1 and 26 March 31 of each year. Any payments due and owing from the Tribe 27 in the year this Compact is approved, or the final year the 06365'98 87 1 Compact is in force, shall reflect the actual net win only for 2 the portion of the year the Compact is in effect. 3 Sec. 5. The compact between the Nottawaseppi Huron Band of 4 Potawatomi Indians and the state of Michigan providing for the 5 conduct of tribal class III gaming by the Nottawaseppi Huron Band 6 of Potawatomi Indians is hereby ratified and enacted into law and 7 entered into by this state as a party pursuant to section 11 of 8 the compact and is legally joined therein in form substantially 9 as follows: 10 A COMPACT BETWEEN 11 THE NOTTAWASEPPI HURON BAND OF POTAWATOMI INDIANS 12 AND 13 THE STATE OF MICHIGAN 14 PROVIDING FOR THE CONDUCT OF TRIBAL CLASS III GAMING 15 BY THE 16 NOTTAWASEPPI HURON BAND OF POTAWATOMI INDIANS 17 18 THIS COMPACT is made and entered into this 29th day of 19 January, 1997, by and between the Nottawaseppi Huron Band of 20 Potawatomi Indians (hereinafter referred to as "Tribe") and the 21 STATE OF MICHIGAN (hereinafter referred to as "State"). 22 RECITALS 23 WHEREAS, the State of Michigan is a sovereign State of the 24 United States of America, having been admitted to the Union pur- 25 suant to the Act of January 26, ch. 6, 1837, 5 Stat. 144 and is 26 authorized by its constitution to enter into contracts and 27 agreements, including this agreement with the Tribe; and 06365'98 88 1 WHEREAS, the Tribe is a federally recognized Indian Tribe 2 and its governing body, the Tribal Council, is authorized by the 3 tribal constitution to enter into contracts and agreements of 4 every description, including this agreement with the State; and 5 WHEREAS, the Congress of the United States has enacted the 6 Indian Gaming Regulatory Act of 1988, Public Law 100-497, 102 7 Stat. 2467, (hereinafter "IGRA"), which permits Indian tribes to 8 operate Class III gaming activities on Indian reservations pursu- 9 ant to a tribal-state compact entered into for that purpose; and 10 WHEREAS, the Tribe proposes to operate a Class III gaming 11 establishment on eligible Indian lands in the State of Michigan, 12 and by Tribal Council Resolution and Tribal Ordinance will adopt 13 rules and regulations governing the games played and related 14 activities at the Class III gaming establishment; and 15 WHEREAS, the State presently permits and regulates various 16 types of gaming within the State (but outside Indian lands), 17 including casino style charitable gaming such as craps, roulette, 18 and banking card games, as well as a lottery operating instant 19 scratch games, and "pick number" games, most of which would be 20 Class III games if conducted by the Tribe; and 21 WHEREAS, the Michigan Supreme Court in Automatic Music & 22 Vending Corp. v. Liquor Control Comm., 426 Mich 452, 396 NW2d 23 204 (1986); appeal dismissed, 481 U.S. 1009 (1987), and the 24 Michigan Court of Appeals in Primages Int'l of Michigan v. 25 Michigan, 199 Mich App 252, 501 NW2d 268 (1993), have held that 26 the statutory exception found at MCL 750.303(2) allows for the 27 play of electronic gaming devices, which includes computerized or 06365'98 89 1 electronic games of chance, albeit subject to specified 2 restrictions regarding the mode of play; and 3 WHEREAS, said casino style table games and electronic gaming 4 devices are, therefore, permitted "for any purpose by any person, 5 organization or entity," within the meaning of IGRA, 25 6 U.S.C. 2710(d)(1)(B); and 7 WHEREAS, at the general election held on November 5, 1996, 8 the electors adopted an initiated law which provides for a 9 licensing and regulatory system under which casino gambling may 10 be operated in the City of Detroit; and 11 WHEREAS, the State and 7 other federally-recognized Indian 12 tribes in the State have previously entered into substantially 13 similar Compacts for the conduct of Class III games; and 14 WHEREAS, a compact between the Tribe and the State for the 15 conduct of Class III gaming satisfies the prerequisite, imposed 16 by the United States Congress by enactment of IGRA, for the oper- 17 ation of lawful Class III gaming by the Tribe on eligible Indian 18 lands in Michigan; and 19 WHEREAS, the State and the Tribe, in recognition of the sov- 20 ereign rights of each party and in a spirit of cooperation in the 21 interests of the citizens of the State and the members of the 22 Tribe, have engaged in good faith negotiations recognizing and 23 respecting the interests of each party and have agreed to this 24 Compact. 25 NOW THEREFORE, the Tribe and the State agree as follows: 26 SECTION 1. Purpose and Objectives. 06365'98 90 1 The purpose and objectives of the Tribe and State in making 2 this Compact are as follows: 3 (A) To evidence the good will and cooperative spirit between 4 the State and the Tribe; 5 (B) To continue the development of effective working rela- 6 tionships between the State and tribal governments; 7 (C) To compact for Class III gaming on eligible Indian lands 8 of the Tribe in Michigan as authorized by IGRA; 9 (D) To fulfill the purpose and intent of IGRA by providing 10 for tribal gaming as a means of generating tribal revenues, 11 thereby promoting tribal economic development, tribal 12 self-sufficiency and strong tribal government; 13 (E) To provide tribal revenues to fund tribal government 14 operations or programs, to provide for the general welfare of the 15 Tribe and its members and for other purposes allowed under IGRA; 16 (F) To provide for the operation of Class III gaming in 17 which, except as provided in 25 U.S.C. 2710(b)(4) and (d)(2)(A) 18 of IGRA, the Tribe shall have the sole proprietary interest and 19 be the primary beneficiary of the Tribe's gaming enterprise; 20 (G) To recognize the State's interest in the establishment 21 by the Tribe of rules for the regulation of Class III gaming 22 operated by the Tribe on eligible Indian lands; 23 (H) To recognize the State's interest in the establishment 24 by the Tribe of rules and procedures for ensuring the Class III 25 gaming is conducted fairly and honestly by the owners, operators, 26 and employees and by the patrons of any Class III gaming 27 enterprise of the Tribe; and 06365'98 91 1 (I) To establish procedures to notify the patrons of the 2 Tribe's Class III gaming establishment that the establishment is 3 not regulated by the State of Michigan and that patrons must look 4 to the tribal government or to the federal government to resolve 5 any issues or disputes with respect to the operations of the 6 establishment. 7 SECTION 2. Definitions. 8 For purposes of this Compact, the following definitions 9 pertain: 10 (A) "Class III gaming" means all forms of gaming authorized 11 by this Compact, which are neither Class I nor Class II gaming, 12 as such terms are defined in 2703(6) and (7) of IGRA. Only those 13 Class III games authorized by this Compact may be played by the 14 Tribe. 15 (B)(1) "Eligible Indian Lands" means reservation lands 16 acquired under applicable federal law. A total of 1 tribal Class 17 III gaming facility may be located on Eligible Indian Lands; 18 Provided However, If any tribe which attains federal recognition 19 subsequent to the date of this Compact is granted the right, 20 under a valid Compact with the State of Michigan, to operate more 21 than 1 Class III gaming facility on its Indian lands, the Tribe 22 shall be afforded the same right subject to the same terms and 23 conditions imposed on such newly recognized tribe. 24 (2) Nothing in subsection 2(B) shall be construed to limit 25 the Tribe's ability to change the location of the Tribe's Class 26 III gaming facility within "Eligible Indian Lands". 06365'98 92 1 (C) "Tribal Chairperson" means the duly elected Chairperson 2 of the Board of Directors or Tribal Council of the Tribe. 3 (D) "Person" means a business, individual, proprietorship, 4 firm, partnership, joint venture, syndicate, trust, labor organi- 5 zation, company, corporation, association, committee, state, 6 local government, government instrumentality or entity, or any 7 other organization or group of persons acting jointly. 8 SECTION 3. Authorized Class III Games. 9 (A) The Tribe may lawfully conduct the following Class III 10 games on eligible Indian lands: 11 (1) Craps and related dice games; 12 (2) Wheel games, including "Big Wheel" and related games; 13 (3) Roulette; 14 (4) Banking card games that are not otherwise treated as 15 Class II gaming in Michigan pursuant to 25 U.S.C. 2703(7)(C), and 16 non-banking card games played by any Michigan tribe on or before 17 May 1, 1988; 18 (5) Electronic games of chance featuring coin drop and 19 payout as well as printed tabulations, whereby the software of 20 the device predetermines the presence or lack of a winning combi- 21 nation and payout. Electronic games of chance are defined as a 22 microprocessor-controlled electronic device which allows a player 23 to play games of chance, which may be affected by an element of 24 skill, activated by the insertion of a coin or currency, or by 25 the use of a credit, and awards game credits, cash, tokens, or 26 replays, or a written statement of the player's accumulated 27 credits, which written statements are redeemable for cash; 06365'98 93 1 (6) Keno; 2 (7) Any other Class III game that lawfully may be operated 3 by a person licensed to operate a casino pursuant to the Michigan 4 gaming control and revenue act, Initiated Law of 1996, MCL 5 432.201 to 432.226; and 6 (8) Games that lawfully may be conducted pursuant to sec- 7 tions 303a and 310a of the Michigan penal code, 1931 PA 328, MCL 8 750.303a and 750.310a. 9 This Compact shall apply to card games that are considered 10 to be Class II games pursuant to 25 U.S.C. 2703(7)(C) only if 11 those games are expanded beyond their "nature and scope" as it 12 existed before May 1, 1988, and only to the extent of such 13 expansion. The term "nature and scope" shall be interpreted con- 14 sistent with IGRA, the legislative history of IGRA, any applica- 15 ble decisions of the courts of the United States and any applica- 16 ble regulations of the National Indian Gaming Commission. 17 Any limitations on the number of games operated or played, 18 their location within eligible Indian lands as defined under this 19 Compact, hours or period of operation, limits on wagers or pot 20 size, or other such limitations shall be determined by duly 21 enacted tribal law or regulation. Any state law restrictions, 22 limitations or regulation of such gaming shall not apply to Class 23 III games conducted by the Tribe pursuant to this Compact. 24 (B) Additional Class III games may be lawfully conducted by 25 mutual agreement of the Tribe and the State as follows: 26 (1) The Tribe shall request additional games by letter from 27 the tribal Chairperson on behalf of the Tribe to the Governor on 06365'98 94 1 behalf of the State. The request shall identify the additional 2 proposed gaming activities with specificity and any proposed 3 amendments to the Tribe's regulatory ordinance. 4 (2) The state acting through the Governor shall take action 5 on the Tribe's request within 90 days after receipt. The 6 Governor's action shall be based on the following: 7 (a) Whether the proposed gaming activities are permitted in 8 the State of Michigan for any purpose by any person, organization 9 or entity; and 10 (b) Whether the provisions of this Compact are adequate to 11 fulfill the policies and purposes set forth in the IGRA with 12 respect to such additional games. 13 SECTION 4. Regulation of Class III Gaming. 14 (A) Prior to permitting the initiation of any Class III 15 gaming on eligible Indian lands, the Tribe will enact a compre- 16 hensive gaming regulatory ordinance governing all aspects of the 17 Tribe's gaming enterprise. The requirements of this Section 4 18 are intended to supplement, rather than conflict with the provi- 19 sions of the Tribe's ordinance. To the extent any regulatory 20 requirement of this Compact is more stringent or restrictive than 21 a parallel provision of the Tribe's ordinance, as now or hereaf- 22 ter amended, this Compact shall control. 23 (B) The regulatory requirements of this Section 4 shall 24 apply to the conduct of all Class III gaming authorized by the 25 Compact. At all times in which it conducts any Class III gaming 26 under this Compact, the Tribe shall maintain, as part of its 06365'98 95 1 lawfully enacted ordinances, requirements at least as restrictive 2 as those set forth herein. 3 (C) The Tribe shall license, operate, and regulate all Class 4 III gaming activities pursuant to this Compact, tribal law, IGRA, 5 and all other applicable federal law. This shall include but not 6 be limited to the licensing of consultants (except legal 7 counsel), primary management officials, and key officials of each 8 Class III gaming activity or operation. Any violation of this 9 Compact, tribal law, IGRA, or other applicable federal law shall 10 be corrected immediately by the Tribe. 11 (D) The Tribe may not license, hire, or employ as a key 12 employee or primary management official as those terms are 13 defined at 25 CFR 502.14 and 502.19, in connection with Class III 14 gaming, any person who: 15 (1) Is under the age of 18; or 16 (2) Has been convicted of or entered a plea of guilty or no 17 contest to a gambling-related offense, fraud or misrepresenta- 18 tion; or 19 (3) Has been convicted of or entered a plea of guilty or no 20 contest to any offense not specified in subparagraph (2) within 21 the immediately preceding 5 years; this provision shall not apply 22 if that person has been pardoned by the Governor of the State 23 where the conviction occurred or, if a tribal member, has been 24 determined by the Tribe to be a person who is not likely again to 25 engage in any offensive or criminal course of conduct and the 26 public good does not require that the applicant be denied a 27 license as a key employee or primary management official; or 06365'98 96 1 (4) Is determined by the Tribe to have participated in 2 organized crime or unlawful gambling or whose prior activities, 3 criminal records, reputation, habits, and/or associations pose a 4 threat to the public interest or to the effective regulation and 5 control of gaming, or create or enhance the dangers of unsuit- 6 able, unfair, or illegal practices, methods and activities in the 7 conduct of gaming or to the carrying on of the business and 8 financial arrangements incidental to the conduct of gaming. 9 (E) The terms "fraud or misrepresentation," as used in 10 subsection (D)(2), shall mean a criminal offense committed in 11 Michigan or any other jurisdiction, involving, theft, fraud or 12 misrepresentation, which is a felony or would be a felony if com- 13 mitted in Michigan, and which was committed as an adult or prose- 14 cuted as an adult offense, and which has not been effectively 15 removed from the employee's criminal record by executive pardon, 16 state court order, or operation of law. 17 (F) The term "any offense," as used in subsection (D)(3), 18 shall mean any criminal offense not described in 19 subsection (D)(2), whether committed in this state or any other 20 jurisdiction, that is, or would be, a crime under the provisions 21 of the Michigan penal code, 1931 PA 328, MCL 750.1 to 750.568, or 22 the controlled substance provisions of the public health code, 23 1978 PA 368, MCL 333.7101 to 333.7545, or any other criminal 24 offense not specified in subparagraph (2) involving theft, dis- 25 honesty, fraud or misrepresentation arising under the law of 26 Michigan or another state or jurisdiction, that was committed as 27 an adult or prosecuted as an adult offense, and which has not 06365'98 97 1 been effectively removed from the employee's criminal record by 2 executive pardon, state court order, or operation of law. 3 (G) All management contracts entered into by the Tribe 4 regarding its gaming enterprise operated pursuant to this Compact 5 shall conform to all the requirements of IGRA, including 25 6 U.S.C. 2711, and tribal law. If the Tribe enters into a manage- 7 ment contract for the operation of any Class III gaming or compo- 8 nent thereof, the State shall be given 14 days' prior written 9 notice of such contract. 10 (H) All accounting records shall be kept on a double entry 11 system of accounting, maintaining detailed, supporting, subsid- 12 iary records. The Tribe shall maintain the following records for 13 not less than 3 years: 14 (1) Revenues, expenses, assets, liabilities and equity for 15 the location at which Class III gaming is conducted; 16 (2) Daily cash transactions for each Class III game at the 17 location at which gaming is conducted, including but not limited 18 to transactions relating to each gaming table bank, game drop box 19 and gaming room bank; 20 (3) All markers, IOUs, returned checks, hold checks or other 21 similar credit instruments; 22 (4) Individual and statistical game records (except card 23 games) to reflect statistical drop and statistical win; for elec- 24 tronic, computer, or other technologically assisted games, ana- 25 lytic reports which show the total amount of cash wagered and the 26 total amount of prizes won; 06365'98 98 1 (5) Contracts, correspondence and other transaction 2 documents relating to all vendors and contractors; 3 (6) Records of all tribal gaming enforcement activities; 4 (7) Audits prepared by or on behalf of the Tribe; and 5 (8) Personnel information on all Class III gaming employees 6 or agents, including rotation sheets, hours worked, employee pro- 7 files and background checks. 8 (I) No person under the age of 18 may participate in any 9 Class III game. 10 (J) The Tribe shall not conduct any Class III gaming outside 11 of eligible Indian lands. 12 (K) The rules of each Class III card game shall be posted in 13 a prominent place in each card room and must designate: 14 (1) The maximum rake-off percentage, time buy-in or other 15 fee charged; 16 (2) The number of raises allowed; 17 (3) The monetary limit of each raise; 18 (4) The amount of ante; and 19 (5) Other rules as may be necessary. 20 (L) Upon the request of the State, the Tribe will provide to 21 the State the background information compiled by the Tribe on all 22 consultants (except legal counsel), management personnel, suppli- 23 ers and employees required to be licensed under 25 CFR Part 556 24 or the Tribe's gaming ordinance to allow the State to verify the 25 Tribe's background information and to make an independent deter- 26 mination as to suitability of these individuals, consistent with 27 the standards set forth in 4(D) herein. 06365'98 99 1 (M) The regulatory requirements set forth in this section of 2 this Compact shall be administered and enforced as follows: 3 (1) The Tribe shall have responsibility to administer and 4 enforce the regulatory requirements. 5 (2) A representative authorized in writing by the Governor 6 of the State shall have the following right to inspect all tribal 7 Class III gaming facilities and all tribal records related to 8 Class III gaming, including those records set forth in 4(H) 9 herein, subject to the following conditions: 10 (a) With respect to public areas, at any time without prior 11 notice; 12 (b) With respect to private areas not accessible to the 13 public, at any time during normal business hours, with 12 hours 14 prior written notice; and 15 (c) With respect to inspection and copying of all tribal 16 records relating to Class III gaming, with 48 hours' prior writ- 17 ten notice, not including weekends. 18 (3) Except as otherwise provided by law or as also allowed 19 by the exceptions defined below, the State agrees to maintain in 20 confidence and never to disclose to any third party any financial 21 information, proprietary ideas, plans, methods, data, develop- 22 ment, inventions or other proprietary information regarding the 23 gambling enterprise of the Tribe, games conducted by the Tribe, 24 or the operation thereof which is provided to the State by the 25 Tribe without the prior written approval of a duly authorized 26 representative of the Tribe, provided that the information is 27 marked as confidential information when received by the State. 06365'98 100 1 Nothing contained in this 4(M)(3) shall be construed to 2 prohibit: 3 (a) The furnishing of any information to a law enforcement 4 or regulatory agency of the United States or State government 5 pursuant to a lawful request of such agency; 6 (b) The State from making known the names of persons, firms 7 or corporations conducting Class III gaming activities pursuant 8 to the terms of this Compact, locations at which such activities 9 are conducted or the dates on which such activities are con- 10 ducted; 11 (c) Publishing the terms of this Compact; 12 (d) Disclosing information as necessary to audit, investi- 13 gate, prosecute, or arbitrate violations of this Compact; 14 (e) Complying with any law, subpoena or court order. The 15 State shall immediately notify the Tribe of any request or demand 16 for the release of confidential information under this subsection 17 4(M)(3)(e) to allow the Tribe to initiate proceedings under 18 Section 7 of this Compact or other applicable law to resolve any 19 dispute regarding the State's intention to disclose such 20 information. 21 (4) The Tribe shall have the right to inspect State records 22 concerning all Class III gaming conducted by the Tribe consistent 23 with Michigan's Freedom of Information Act. 24 (5) The Tribe shall reimburse the State for the actual costs 25 the State incurs in carrying out any functions authorized by the 26 terms of this Compact, in an amount not to exceed $50,000.00 per 27 annum, adjusted annually in accordance with the consumer price 06365'98 101 1 index annual inflation index. All calculations of amounts due 2 shall be based upon a fiscal year beginning October 1, and ending 3 September 30, unless the parties select a different fiscal year. 4 Payments due the State shall be made no later than 60 days after 5 the beginning of each fiscal year. Payments due the State during 6 any partial fiscal year this Compact is in effect shall be 7 adjusted to reflect only that portion of the fiscal year. Within 8 60 days after each fiscal year in which this Compact is in 9 effect, the State shall submit to the Tribe an accounting of 10 actual costs incurred in carrying out any functions authorized by 11 the terms of this Compact. Any amount of said sums paid to the 12 State which are not expended by the State on said actual costs 13 shall be returned to the Tribe by the State within 60 days after 14 the fiscal year or treated as a pre-payment of the Tribe's obli- 15 gation during the subsequent fiscal year. 16 (6) In the event the State believes that the Tribe is not 17 administering and enforcing the regulatory requirements set forth 18 herein, it may invoke the procedures set forth in Section 7 of 19 this Compact. 20 (N) The Tribe shall comply with all applicable provisions of 21 the Bank Secrecy Act, P.L. 91-508, October 26, 1970, 31 22 U.S.C. 5311-5314. 23 SECTION 5. Employee Benefits. 24 The Tribe shall provide to any employee who is employed in 25 conjunction with the operation of any gaming establishment at 26 which Class III gaming activities are operated pursuant to this 27 compact, such benefits to which the employee would be entitled by 06365'98 102 1 virtue of the Michigan employment security act, 1936 (Ex Sess) PA 2 1, MCL 421.1 to 421.75, and the worker's disability compensation 3 act of 1969, 1969 PA 317, MCL 418.101 to 418.941, if his or her 4 employment services were provided to an employer engaged in a 5 business enterprise which is subject to, and covered by, the 6 respective Public Acts. 7 SECTION 6. Providers of Class III Gaming Equipment or 8 Supplies. 9 (A) No Class III games of chance, gaming equipment or sup- 10 plies may be purchased, leased or otherwise acquired by the Tribe 11 unless the Class III equipment or supplies meet the technical 12 equipment standards of either the State of Nevada or the State of 13 New Jersey. 14 (B) Prior to entering into any lease or purchase agreement, 15 the Tribe shall obtain sufficient information and identification 16 from the proposed seller or lessor and all persons holding any 17 direct or indirect financial interest in the lessor or the 18 lease/purchase agreement to permit the Tribe to conduct a back- 19 ground check on those persons. The Tribe shall not enter into 20 any lease or purchase agreement for Class III gaming equipment or 21 supplies with any person or entity if the lessor, seller, or any 22 manager or person holding direct or indirect financial interest 23 in the lessor/seller or the proposed lease/purchase agreement, is 24 determined to have participated in or have involvement with orga- 25 nized crime or has been convicted of or entered a plea of guilty 26 or no contest to a gambling-related offense, fraud or 27 misrepresentation, or has been convicted of or entered a plea of 06365'98 103 1 guilty or no contest to any other felony offense within the 2 immediately preceding 5 years, unless that person has been 3 pardoned. 4 (C) The seller, lessor, manufacturer, or distributor shall 5 provide, assemble and install all Class III games of change, 6 gaming equipment, and supplies in a manner approved and licensed 7 by the Tribe. 8 SECTION 7. Dispute Resolution. 9 (A) In the event either party believes that the other party 10 has failed to comply with or has otherwise breached any provision 11 of this Compact, such party may invoke the following procedure: 12 (1) The party asserting noncompliance shall serve written 13 notice on the other party. The notice shall identify the spe- 14 cific Compact provision alleged to have been violated and shall 15 specify the factual and legal basis for the alleged 16 noncompliance. The notice shall specifically identify the type 17 of game or games, their location, and the date and time of the 18 alleged noncompliance. Representatives of the State and Tribe 19 shall thereafter meet within 30 days in an effort to resolve the 20 dispute. 21 (2) In the event an allegation by the State is not resolved 22 to the satisfaction of the State within 90 days after service of 23 the notice set forth in section 7(A)(1), the party may serve upon 24 the office of the tribal Chairperson a notice to cease conduct of 25 the particular game(s) or activities alleged by the State to be 26 in noncompliance. Upon receipt of such notice, the Tribe may 27 elect to stop the game(s) or activities specified in the notice 06365'98 104 1 or invoke arbitration and continue the game(s) or activities 2 pending the results of arbitration. The Tribe shall act upon one 3 of the foregoing options within 30 days of receipt of notice from 4 the State. Any arbitration under this authority shall be con- 5 ducted under the Commercial Arbitration rules of the American 6 Arbitration Association except that the arbitrators shall be 7 attorneys who are licensed members of the State Bar of Michigan, 8 or of the bar of another state, in good standing, and will be 9 selected by the State picking 1 arbitrator, the Tribe a second 10 arbitrator, and the 2 so chosen shall pick a third arbitrator. 11 If the third arbitrator is not chosen in this manner within 10 12 days after the second arbitrator is picked, the third arbitrator 13 will be chosen in accordance with the rules of the American 14 Arbitration Association. In the event an allegation by the Tribe 15 is not resolved to the satisfaction of the Tribe within 90 days 16 after service of the notice set forth in Section 7(A)(1), the 17 Tribe may invoke arbitration as specified above. 18 (3) All parties shall bear their own costs of arbitration 19 and attorney fees. 20 (B) Nothing in Section 7(A) shall be construed to waive, 21 limit or restrict any remedy which is otherwise available to 22 either party to enforce or resolve disputes concerning the provi- 23 sions of this Compact. Nothing in this Compact shall be deemed a 24 waiver of the Tribe's sovereign immunity. Nothing in this 25 Compact shall be deemed a waiver of the State's sovereign 26 immunity. 06365'98 105 1 SECTION 8. Notice to Patrons. 2 In the facility of the Tribe where Class III gaming is 3 conducted the Tribe shall post in a prominent position a Notice 4 to patrons at least 2 feet by 3 feet in dimension with the fol- 5 lowing language: 6 NOTICE 7 THIS FACILITY IS REGULATED BY ONE OR MORE OF THE FOLLOWING: THE 8 NATIONAL INDIAN GAMING COMMISSION, BUREAU OF INDIAN AFFAIRS OF 9 THE U.S. DEPARTMENT OF THE INTERIOR AND THE GOVERNMENT OF THE 10 (Indian tribe)_________________________. 11 THIS FACILITY IS NOT REGULATED BY THE STATE OF MICHIGAN. 12 SECTION 9. Gaming Outside of Eligible Indian Lands. 13 An application to take land in trust for gaming purposes 14 outside of eligible Indian lands, as defined in Section 2(B) of 15 this Compact, shall not be submitted to the Secretary of the 16 Interior in the absence of a prior written agreement between the 17 Tribe and the State's other federally recognized Indian Tribes 18 that provides for each of the other Tribes to share in the reve- 19 nue of any gaming facility that is the subject of the application 20 to take lands in trust for gaming purposes outside of eligible 21 Indian lands. 22 SECTION 10. Regulation of the Sale of Alcoholic Beverages. 23 (A) The Tribe hereby adopts and applies to its Class III 24 gaming establishment as tribal law those State laws, relating to 25 the sale and regulation of alcoholic beverages encompassing the 26 following areas: sale to a minor; sale to a visibly intoxicated 27 individual; sale of adulterated or misbranded liquor; hours of 06365'98 106 1 operation; and similar substantive provisions. Said tribal laws, 2 which are defined by reference to the substantive areas of State 3 laws referred to above, shall apply to the tribal Class III 4 gaming establishment in the same manner and to the same extent as 5 such laws apply elsewhere in the State to off-reservation 6 transactions. 7 (B) The Tribe, for resale at its Class III gaming establish- 8 ment, shall purchase spirits from the Michigan liquor control 9 commission, and beer and wine from distributors licensed by the 10 Michigan liquor control commission, at the same price and on the 11 same basis that such beverages are purchased by Class C 12 licensees. 13 SECTION 11. Effective Date. 14 This Compact shall be effective immediately upon: 15 (A) Endorsement by the tribal chairperson and concurrence in 16 that endorsement by resolution of the Tribal Council; 17 (B) Endorsement by the Governor of the State and concurrence 18 in that endorsement or legislation of the Michigan Legislature; 19 (C) Approval by the Secretary of the Interior of the United 20 States; and 21 (D) Publication in the Federal Register. 22 SECTION 12. Binding Effect, Duration, and Severability. 23 (A) This Compact shall be binding upon the State and the 24 Tribe for a term of 20 years from the date it becomes effective 25 unless modified or terminated by written agreement of both 26 parties. 06365'98 107 1 (B) At least 1 year prior to the expiration of 20 years 2 after the Compact becomes effective, and thereafter at least 1 3 year prior to the expiration of such subsequent 5-year period, 4 either party may serve written notice on the other of its right 5 to renegotiate this Compact. The parties agree that 25 6 U.S.C. 2710(d)(3) through (8), or any successor provisions of 7 law, apply to successor compacts. 8 (C) In the event that either party gives written notice to 9 the other of its right to renegotiate this Compact pursuant to 10 subsection (B), the Tribe may, pursuant to the procedures of 11 IGRA, request the State to enter into negotiations for a succes- 12 sor compact governing the conduct of Class III gaming 13 activities. If the parties are unable to conclude a successor 14 compact, this Compact shall remain in full force and effect pend- 15 ing exhaustion of the administrative and judicial remedies set 16 forth in IGRA and/or any other applicable federal law. 17 (D) The Tribe may operate Class III gaming only while this 18 Compact or any renegotiated compact is in effect. 19 (E) In the event that any section or provision of this 20 Compact is disapproved by the Secretary of the Interior of the 21 United States or is held invalid by any court of competent juris- 22 diction, it is the intent of the parties that the remaining sec- 23 tions or provisions of this Compact, and any amendments thereto, 24 shall continue in full force and effect. This severability pro- 25 vision does not apply to Sections 17 and 18 of this Compact. 26 SECTION 13. Notice to Parties. 06365'98 108 1 Unless otherwise indicated, all notices, payments, requests, 2 reports, information or demand which any party hereto may desire 3 or may be required to give to the other party hereto, shall be in 4 writing and shall be personally delivered or sent by first-class, 5 certified or registered United States Mail, postage prepaid, 6 return receipt requested, and sent to the other party at its 7 address appearing below or such other address as any party shall 8 hereinafter inform the other party hereto by written notice given 9 as aforesaid: 10 Notice to the Tribe shall be sent to: 11 Chairperson 12 ______________________________ 13 Tribe 14 ______________________________ 15 Tribe address 16 Notice to the State shall be sent to: 17 Governor's Office Office of Attorney 18 General 19 State of Michigan Treasury Building 20 P.O. Box 30013 First Floor 21 Lansing, MI 48909 Lansing, MI 48922 22 23 Every notice, payment, request, report, information or 24 demand so given shall be deemed effective upon receipt, or if 25 mailed, upon receipt or the expiration of the third day following 26 the day of mailing, whichever occurs first, except that any 27 notice of change of address shall be effective only upon receipt 28 by the party to whom said notice is addressed. 29 SECTION 14. Entire Agreement. 06365'98 109 1 This Compact is the entire agreement between the parties and 2 supersedes all prior agreements, whether written or oral, with 3 respect to the subject matter hereof. Neither this Compact nor 4 any provision herein may be changed, waived, discharged, or ter- 5 minated orally, but only by an instrument in writing signed by 6 the Tribe and the State. 7 SECTION 15. Filing of Compact with Secretary of State. 8 Upon the effective date of this Compact, a certified copy 9 shall be filed by the Governor with the Michigan Secretary of 10 State and a copy shall be transmitted to each house of the 11 Michigan State Legislature and the Michigan Attorney General. 12 Any subsequent amendment or modification of this Compact shall be 13 filed with the Michigan Secretary of State. 14 SECTION 16. Amendment. 15 This Compact may be amended by mutual agreement between the 16 Tribe and the State as follows: 17 (A) The Tribe or the State may propose amendments to the 18 Compact by providing the other party with written notice of the 19 proposed amendment as follows: 20 (i) The Tribe shall propose amendments pursuant to the 21 notice provisions of this Compact by submitting the proposed 22 amendments to the Governor who shall act for the State. 23 (ii) The State, acting through the Governor, shall propose 24 amendments by submitting the proposed amendments to the Tribe 25 pursuant to the notice provisions of this Compact. 26 (B) The party receiving the proposed amendment shall advise 27 the requesting party within 30 days as follows: 06365'98 110 1 (i) That the receiving party agrees to the proposed 2 amendment; or 3 (ii) That the receiving party rejects the proposed amendment 4 as submitted and agrees to meet concerning the subject of the 5 proposed amendment. 6 (C) Any amendment agreed to between the parties shall be 7 submitted to the Secretary of the Interior for approval pursuant 8 to the provisions of the IGRA. 9 (D) Upon the effective date of the amendment, a certified 10 copy shall be filed by the Governor with the Michigan Secretary 11 of State and a copy shall be transmitted to each house of the 12 Michigan Legislature and the Michigan Attorney General. 13 SECTION 17. Tribal Payments to State for Economic Benefits 14 of Exclusivity. 15 (A) The State and the Tribe have determined that it is in 16 the interests of the people of the State and the members of the 17 Tribe to maximize the economic benefits of Class III gaming for 18 the Tribe and to minimize the adverse effects of Class III gaming 19 by providing a mechanism to reduce the proliferation of Class III 20 gaming enterprises in the State in exchange for the Tribe provid- 21 ing important revenue to the State. 22 (B) So long as there is a binding Class III Compact in 23 effect between the State and Tribe and no change in State law is 24 enacted which is intended to permit or permits the operation of 25 electronic games of chance or commercial casino games by any 26 other person (except a person operating such games in the City of 27 Detroit pursuant to the Michigan gaming control and revenue act, 06365'98 111 1 Initiated Law of 1996, MCL 432.201 to 432.226) and no other 2 person (except a federally-recognized Indian Tribe operating pur- 3 suant to a valid Compact under IGRA or a person operating in the 4 City of Detroit pursuant to the Michigan gaming control and reve- 5 nue act, Initiated Law of 1996, MCL 432.201 to 432.226) within 6 the State lawfully operates electronic games of chance or commer- 7 cial casino games, the Tribe shall make payments to the State as 8 provided in Subsection (C). 9 (C) From and after the effective date of this Compact (as 10 determined pursuant to Section 11 of this Compact), and so long 11 as the conditions set forth in Subsection (B) remain in effect, 12 the Tribe will make semi-annual payments to the State as 13 follows: 14 (i) Payment to the Michigan Strategic Fund, or its successor 15 as determined by State law, in amount equal to 8% of the net win 16 at the casino derived from all Class III electronic games of 17 chance, as those games are defined in this Compact. 18 (ii) As used in this subsection, "net win" means the total 19 amount wagered on each electronic game of chance, minus the total 20 amount paid to players for winning wagers at such machines. 21 (iii) For purposes of these payments, all calculations of 22 amounts due shall be based upon a fiscal year beginning October 1 23 and ending September 30 of the following calendar year, unless 24 the parties agree on a different fiscal year, and all payments 25 due the State pursuant to the terms of this Section shall be paid 26 no later than 60 days after October 1 and March 31 of each year. 27 Any payments due and owing from the Tribe in the year this 06365'98 112 1 Compact is approved, or the final year the Compact is in force, 2 shall reflect the actual net win but only for the portion of the 3 year the Compact is in effect. 4 (D) The operation of electronic games of chance by persons 5 or entities other than federally-recognized Indian tribes pursu- 6 ant to a valid Compact under IGRA shall not violate the tribe's 7 exclusive right to operate such machines so long as such 8 machines: 9 (i) Reward a player only with the right to replay the device 10 at no additional costs; 11 (ii) Do not permit the accumulation of more than 15 replays 12 at any 1 time; 13 (iii) Allow the accumulated free replays to be discharged 14 only by activating the device for 1 additional play for each 15 accumulated free replay; and 16 (iv) Make no permanent record, directly or indirectly, of 17 the free replays awarded. 18 SECTION 18. Tribal Payments to Local Governments. 19 (A) From and after the effective date of this Compact (as 20 determined pursuant to Section 11 of this Compact), the Tribe 21 will make semi-annual payments to the treasurer for the county 22 described in paragraph (ii)(1) of this subsection 18(A) to be 23 held by said treasurer for and on behalf of the local revenue 24 sharing board described below, as follows: 25 (i) Payment in the aggregate amount equal to 2% of the net 26 win at each casino derived from all Class III electronic games of 27 chance, as those games are defined in this Compact. The county 06365'98 113 1 treasurer shall disburse the payments received as specified by 2 lawful vote of the local revenue sharing board. 3 (ii) It is the State's intent, in this and its other 4 Compacts with federally recognized tribes, that the payments to 5 local governments provided for in this section provide financial 6 resources to those political subdivisions of the State which 7 actually experience increased operating costs associated with the 8 operation of the Class III gaming facility. To this end, a local 9 revenue sharing board shall be created by those local governments 10 in the vicinity of the Class III gaming facility to receive and 11 disburse the semi-annual payments from the Tribe as described 12 below. Representatives of local governments in the vicinity of 13 the Class III gaming facility shall be appointed by their respec- 14 tive elected body and shall serve at the pleasure of such elected 15 body. The local revenue sharing board shall consist of represen- 16 tatives from each of the following jurisdictions: 17 (1) One representative from the county in which the Class 18 III gaming facility is located; 19 (2) One representative from the village, city, or township 20 in which the Class III gaming facility is located; 21 (3) One representative from a third local unit of government 22 determined by the representatives identified in sub-paragraphs 23 (1) and (2), above, to be most impacted by the Class III gaming 24 facility. 25 The procedures for the functioning of the local revenue 26 sharing board, guidelines for establishments of criteria or a 27 formula for the distribution of revenues, and all other matters 06365'98 114 1 not specified in this Compact, shall be determined by the local 2 revenue sharing board. Decisions of the local revenue sharing 3 board concerning the distribution of revenues shall require the 4 unanimous vote of the 3 representatives. The local revenue shar- 5 ing board's sole function shall be to determine and make alloca- 6 tions of the tribal payments for the purposes described and 7 subject to the limitations in subparagraphs (iii) to (v) below. 8 (iii) Of the payments made to local units of government, not 9 less than 1/8 of the aggregate payment described in subparagraph 10 (i) shall be paid to local public safety organizations for public 11 safety purposes. 12 (iv) Out of the aggregate payments to local units of govern- 13 ment, each local unit of government shall receive no less than an 14 amount equivalent to its share of ad valorem property taxes that 15 would otherwise be attributed to the Class III Gaming Facility if 16 that site were subject to such taxation. 17 (v) Out of the aggregate payments to local units of govern- 18 ment, after deducting the payment provided in subparagraphs (iii) 19 and (iv), the Board shall allocate an additional portion of such 20 payments to local units of government to offset the actual costs 21 incurred by such local units of government as a result of the 22 development of a Class III gaming facility in the vicinity. The 23 balance of such payments remaining after reimbursement of such 24 actual costs may be utilized for any other lawful local govern- 25 ment purposes. 06365'98 115 1 (vi) As used in this subsection, "net win" means the total 2 amount wagered on each electronic game of chance, minus the total 3 amount paid to players for winning wagers at such machines. 4 (vii) For purposes of these payments, all calculations of 5 amounts due shall be based upon a fiscal year beginning October 1 6 and ending September 30 of the following calendar year, unless 7 the parties agree on a different fiscal year, and all payments 8 due the local units of government pursuant to the terms of this 9 Section shall be paid no later than 60 days after October 1 and 10 March 31 of each year. Any payments due and owing from the Tribe 11 in the year this Compact is approved, or the final year the 12 Compact is in force, shall reflect the actual net win only for 13 the portion of the year the Compact is in effect. 06365'98 Final page. LBO