Negotiations With Catawba Nation Over Casino in Kings Mountain Ongoing

As we head into 2021, the prospect of a brand new casino in North Carolina is coming ever closer to reality. Construction of the $273 million Catawba Nation Casino is ongoing at Kings Mountain, near Interstate 85.

Once completed, the 195,000 sq ft casino resort will house over 1300 slot machines, 54 table games, a massive hotel, restaurants, stores, and other entertainment venues. It will be called the Catawba Two Kings Casino resort.

If all goes according to plan, the casino is expected to open in spring or fall 2021. But it will be an introductory facility, housing slot machines, a restaurant, and other basic amenities, as the project is still to get full regulatory approval from the powers in Raleigh. The Catawba Nation representatives are busy negotiating a compact with the State Governor’s office.

What Is the “Compact” and Why Is it Important

Casinos owned and operated by Native American Tribes operate under quite delicate and complex agreements. Instead of one, there are three governments involved – tribal, State, and Federal. To avoid messy squabbles over jurisdiction, the Indian Gaming Regulatory Act of 1988 (IGRA) requires a Tribal Casino to operate under a Compact.

A compact is a sort of business arrangement between the tribe and the State Government. It is mandatory if the casino wants to provide a full “Vegas-style” experience, with slots, gaming tables, roulette, and more. They are all classified as Class III Gaming.

Class I and II, which involve social games and bingo-style games, do not require strict approval. The tribes can regulate these themselves. But Class III is a different ball-game, heavily regulated and controlled by States. They can collect taxes on Class III game revenues under the IGRA.

The bottom line is simple – if the Catawba Nation wants their big casino to legally deliver blackjack, slots, roulette, and the works, they need a compact. Responsible gaming is a very important concept in the gambling business – if you want to succeed you have to follow all applicable laws. For the Catawba Casino, that means a compact is essential.

The Historical Significance of the Catawba Casino

The southeastern region of the US is not exactly famous for its gambling options. Two of North Carolina’s neighbors – Tennessee and South Carolina, do not allow casino gambling in any form. And to the north, Virginia only legalized casino gambling recently in 2019.

Having a new casino in North Carolina is huge news, especially since the state only has a couple of other gaming destinations. Not surprisingly, both of these are owned by another Native American tribe – the Eastern Band of Cherokee Indians.

In fact, the Catawba Nation is not even formally based in North Carolina. They are a Federally-recognized Indian tribe in neighboring South Carolina. The approval of the Catawba casino project outside their home state had raised some eyebrows as well as strong protests from the Cherokees.

Why and How the Casino Project Came to NC

Even though South Carolina is the home of the Catawba Nation, there was no way for them to get the casino project approved there. In 1993, they signed a settlement agreement with the state, which prevents them from starting a casino as long as gambling is prohibited in South Carolina.

So they looked a few miles north of the state border, towards the city of Kings Mountain near Charlotte, NC. A casino application submitted to the Federal Government in 2013 finally received approval in 2020, with a bill in the Senate providing land to the tribe in North Carolina.

That bill was introduced jointly by Senators from both North and South Carolina, including Linsay Graham, Thom Tillis, and Richard Burr. The bill provided full federal support to the casino project. It was largely based on the historic claims of the Catawba Nation extending from South Carolina, into North Carolina.

The passing of the bill also meant that the Cherokee Nation would have no easy way to block the Catawba project. In an already tough economic situation, and the ramification of the Covid pandemic, their opposition, based on business interests, is not without its merits. After all, the Catawba are bringing a rival casino project to their home turf, despite not being a North Carolina tribe.

The Potential Impact of the Catawba Casino Project

Even as construction progresses at Kings Mountain, a case is underway across Federal courts. The Cherokee have sued the Catawba and the Department of Interior for bypassing the Congress transferring land to the Catawba.

But the Catawba defense is also quite interesting – they point to that 1993 agreement, which also gives them federal recognition and service rights outside their home state, in six North Carolina counties.

The lawsuit is expected to have its final filings by the end of January 2020. It is too early to tell if the Cherokee will be successful in blocking such a massive project. If the casino does end up getting full approval, it will set an interesting precedent in the Indian Casino gaming industry.

So far, all the casinos owned by Tribal authorities are located on tribal land, which is within the boundaries of their home state. The Catawba Casino would be the first of its kind allowing an outside tribe to operate a casino in another state.

We could get a situation where tribes apply for casino permits in states where gambling is restricted. But even if that happens, there is still the issue of Federal approval. The Catawba instance could very well be more of a one-off. Only time will tell.