Compacts | Litigation

Pojoaque Pueblo disputes state's 'illegal tax' on gaming revenues

Wednesday, May 11, 2016

The Buffalo Thunder Resort at Pojoaque Pueblo in New Mexico. Photo from Facebook

Revenue sharing is a given in the Indian gaming industry but one New Mexico tribe won't give into the state's demands for a cut.

Leaders of Pojoaque Pueblo have refused to sign a new Class III gaming compact that calls for the revenue sharing rate to increase from 8 percent to 10.5 percent. Nearly every other tribe in the state has agreed but Gov. Joseph Talachy explains why his people won't.

“I don’t care what anybody says about revenue sharing. It’s an illegal tax," Talachy tells The Santa Fe Reporter. “Why do we fight? Because my stores of maize are being depleted already, and now if I give that up, that means the well-being of my people ultimately gets negatively impacted.”

The Indian Gaming Regulatory Act bars states from directly taxing tribal revenues. Yet revenue sharing has become common as a way to pay for the costs of regulation and to address the impacts of tribal casinos.

The Bureau of Indian Affairs, however, has determined that a state must provide "meaningful concessions" -- such as exclusivity -- in order to justify taking a cut of a tribe's proceeds.

In the case of New Mexico, the BIA has raised questions. Former assistant secretary Kevin Washburn, who left the Obama administration in December to rejoin the University of New Mexico School of Law, said he was "troubled by the apparent increase in revenue sharing rates" when the compact showed up on his desk last summer.

Still, he allowed the agreement to take effect after tribes said they were satisfied with the provisions. New Mexico is now home to 15 tribes with "deemed approved" compacts, the most of any state.

Pojoaque Pueblo continues to operate the Buffalo Thunder Resort and the Cities of Gold while litigation plays out in federal court. The 10th Circuit Court of Appeals heard arguments in one case last September but a decision hasn't been issued. A second case is pending.

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Ante Up (The Santa Fe Reporter 5/11)