March 7, 1995 in Nation/World

Tribe Hoping To Take Lottery Nationwide But Legal Challenges Likely Will Determine Outcome

Christine Bedell And Rich Roesler S Staff writer
 

The Coeur d’Alene Tribe introduced plans for a nationwide Indian lottery Monday which officials said would raise $400 million in the next three years, create 300 jobs and give its people new hope.

It also may raise legal challenges, said representatives of established lotteries.

Tribal gaming director Dave Matheson said the National Indian Lottery would be owned and operated by the tribe on its reservation at Worley, Idaho. The tribe would receive 70 percent of the proceeds, with 30 percent going to its lottery management partner, Unistar Entertainment Inc.

The lottery would “instill hope in our people again,” Matheson told representatives of the national media at a news conference. The revenue it would generate is key to preserving what many have lost: their cultural identity, educational opportunities and economic development, he said.

“Today, we look to the lottery as a tool to regain parts of that strength, to regain that self-sufficiency and to regain that identity,” Matheson said. “It’s what we want to pass down to our youth.”

That message was not lost on 17-year-old Joseph Stensgar, son of tribal Chairman Ernest Stensgar, who went to Washington, D.C., to share his culture with a national audience.

In front of television cameras and a crowd of reporters at the National Press Club, Joseph and a handful of other tribal members donned beaded sheepskin costumes, leather moccasins and headdresses to perform a traditional Coeur d’Alene dance ritual.

As five tribal members stood in one corner, pounding on large wooden drums, the dancers streamed in front of the crowd.

Joseph also talked to reporters about the problems facing young people on the reservation. He said he has seen friends drop out of school and abuse drugs because they feel the reservation offers little hope for the future.

The lottery money would help change that, he said, leading to construction of recreation centers, programs that foster cultural development and the education they need to enter college.

“This will give us opportunities that are our parents and grandparents didn’t have,” Joseph said. “It gives us a lot to look forward to.”

Several lottery experts, however, predicted that the tribe’s lottery plan will be challenged in court.

“I think it probably may turn out to be illegal,” said Charles Strutt, executive director of the Multi-State Lottery Association, in West Des Moines, Iowa. “Everyone’s attorneys are looking into it.”

The non-profit association runs Powerball, a joint lottery owned and operated by 17 states and Washington, D.C. It is now the closest thing to a national lottery.

Critics question whether the tribe can do business without negotiating agreements with the 36 states in which its lottery would be available.

“The Indian tribes are a sovereign nation and that gives them a lot of leeway on reservation land,” Strutt said. “But just like an American citizen going to China, you’ve got to abide by the local laws.”

Bill Bergman, executive director of the North American Association of State and Provincial Lotteries, agreed.

“I see some potential problems,” Bergman said. “Where is the transaction happening? Is it happening on the reservation, or in Washington, D.C., where I’m giving them my credit card number?”

Bergman said 15 states specifically prohibit use of credit cards for gambling. About 19 states prohibit the use of a telephone for gambling. As early as last week, Bergman said, he heard that several attorneys general are reviewing the lottery to see if they should challenge it.

The tribal lottery would likely weaken the market for state lottery tickets, making states more likely to fight it, said Matt Connor, senior writer for Gaming and Wagering Business Magazine, in New York City.

“This is like a foreign entity coming into the state and selling lottery tickets,” Connor said. “The states won’t like it.”

In a statement handed out Monday, Matheson indicated the tribe anticipates challenges.

“We expect opposition from competitors,” Matheson wrote. “But that opposition will be purely competitive in motive. We have cleared every legal hurdle and gained every approval necessary from the federal government to conduct and operate this lottery.”

The approvals from the U.S. Secretary of the Interior and National Indian Gaming Commission “clearly provide for the interstate sale of lottery tickets,” Matheson wrote. Federal communication and mail restrictions are waived if a tribe has an approved compact, he wrote.

The tribe is following the lead of many states by turning to lotteries to make up budget shortfalls, Ernest Stensgar said at the news conference.

“Our income is so small that we can’t address all of our needs,” Stensgar said. “With gaming dollars, we feel we can create programs that will help our elderly, bring us jobs and improve our schools.”

MEMO: Cut in the Spokane edition.

This sidebar ran with story: LARGEST LOTTERY Plans call for the National Indian Lottery to be available in 36 states where lotteries are legal and in the District of Columbia, which would make it the largest lottery in U.S. history. Players would be able to order tickets with a credit card by calling an 800 telephone number that would operate 24 hours a day. Tickets would be mailed out the next day. Minimum purchase would be $5, for five separate $1 tickets. Participants would choose six out of 49 numbers with the option of applying them all on one game or on games up to 52 weeks in advance. At least 50 percent of ticket sales would go toward prizes, Coeur d’Alene tribal gaming director Dave Matheson said. All cash prizes would be awarded in lump sums. Matheson said the Coeur d’Alene Tribe is leaving open the possibility that other tribes would help manage the lottery and share in its profits.

Cut in the Spokane edition.

This sidebar ran with story: LARGEST LOTTERY Plans call for the National Indian Lottery to be available in 36 states where lotteries are legal and in the District of Columbia, which would make it the largest lottery in U.S. history. Players would be able to order tickets with a credit card by calling an 800 telephone number that would operate 24 hours a day. Tickets would be mailed out the next day. Minimum purchase would be $5, for five separate $1 tickets. Participants would choose six out of 49 numbers with the option of applying them all on one game or on games up to 52 weeks in advance. At least 50 percent of ticket sales would go toward prizes, Coeur d’Alene tribal gaming director Dave Matheson said. All cash prizes would be awarded in lump sums. Matheson said the Coeur d’Alene Tribe is leaving open the possibility that other tribes would help manage the lottery and share in its profits.


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