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State and Tribes Settle Keno Dispute

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March 24, 2008

TRAVERSE CITY - The Little River Band of Ottawa Indians in Manistee and the Little Traverse Bay Bands of Odawa Indians in Petoskey have agreed to a settlement with state officials to end a three year dispute over the Michigan Lottery's Club Keno game.

The dispute began in October 2003 when the Michigan Lottery Bureau launched Club Keno, which the tribes protested as violations of their 1998 gaming compacts. The tribes said keno was a commercial casino game which was exclusive to Michigan Indian casinos and non-Indian casinos in Detroit. In protest the tribes withheld payment of 8% of their electronic gambling revenues as specified in their compacts. The state reacted with a lawsuit in federal court.

Since 2003 the Tribal payments owed to the state for electronic gambling have been held in escrow. $52 million has been deposited. $33 million was paid by the Little River Band and $19 million paid by the Little Traverse Bay Bands.

Last week a settlement was announced between the state and two northern Michigan tribes to reduce Michigan's share of tribal gambling money and to split $52 million in escrow.  Many expected the deal to allow the Little River Band of Ottawa Indians in Manistee to build a new casino in Muskegon, but there was no such provision.


  • Tribal payments to the state of electronic gambling revenues will be reduced from 8% to 6%.
  • The $52 million in electronic gambling revenue paid by the tribes and held in escrow since the dispute began in 2003 will be split. The state will get $26 million to be used for economic development efforts through the Michigan Strategic Fund.
  • The compacts will be amended for gambling "exclusivity" for the tribes. Instead of a statewide basis, exclusivity will be limited to a nine- to 10-county area near each tribe's casino.

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