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Gavin Clarkson and Jim Sebenius

Excerpted from: Gavin Clarkson and Jim Sebenius, Leveraging Tribal Sovereignty for Economic Opportunity: a Strategic Negotiations Perspective, 76 Missouri Law Review 1045-1112 (Fall, 2011) (501 Footnotes Omitted)

For Indian tribes throughout most of U.S. history, the people of the states where they are found are often their deadliest enemies. Recently, however, tribes and states have been able to find sufficient common ground in order to work cooperatively in certain areas, particularly as state budget deficits continue to worsen. In some instances, Congress has mandated such cooperation. In other instances, the cooperative activity has arisen between the parties themselves as a practical matter. In either situation, tribes and states often find themselves at the bargaining table.

The negotiation dynamics of tribal-state compacting, however, may be challenging. The parties have experienced centuries of animosity. The shadow of the law relevant to the substance of the negotiation is ill-defined or easily misunderstood, as is often the case with Indian law. Questions about the boundaries of Indian Country may be unsettled and subject to litigation. Finally, significant cultural differences obscure common ground that may facilitate a successful negotiation.

While the range of tribal-state compacts is large, Indian gaming has generated the greatest amount of attention in recent years. Although Indian tribes have conducted gaming operations since the 1970s, the advent of large-scale tribal casinos dramatically increased the economic impact of Indian gaming. Most of the tribes that launched successful casinos had a common rags-to-riches story, but the story of the Mashantucket Pequots is unique. Having been nearly annihilated more than 350 years earlier, the Pequots opened their Foxwoods casino in 1992 and negotiated a compact with the State of Connecticut that allowed the tribe to install slot machines in return for a share of the slot proceeds. With the increased revenue from slots, Foxwoods now generates more than $1 billion annually, with the state receiving significant revenues from the tribe.

Over the last two decades, the immense success of the Pequot gaming operation and the substantial revenue shared with the State of Connecticut have become almost mythical in nature, with other states often misunderstanding the lessons of the Foxwoods story. When state budgets faced unprecedented fiscal woes, many state officials erroneously assumed that the revenue sharing provisions of the Pequot compact were a tax that the state was entitled to impose; officials then sought to obtain Connecticut deals for their respective states. Other states mistakenly saw Foxwoods as a natural consequence of the Indian Gaming Regulatory Act (IGRA). The true story behind the Pequot gaming compact, however, is one of strategic negotiation and the leveraging of tribal sovereignty into economic opportunity. Not included in the myth is the fact that the tribe only agreed to share revenues with the state in return for a valuable de facto monopoly: the exclusive right to operate slot machines in Connecticut, which in turn satisfied the state's desire to limit the expansion of gaming.

The other danger of over-elevating the myth of the Foxwoods negotiations is to overlook the need for compacts outside the gaming context. Thus, in order to appreciate the lessons of Foxwoods, those negotiations must be placed in the context of Indian law. The very existence of the Indian gaming phenomenon arose out of a core tenet of Indian law: Indian tribes are sovereign governmental entities. In the case of Foxwoods, the revenue sharing provision was not a tax but was instead a voluntary, negotiated transfer between sovereigns.

Part II of this Article discusses the sovereign nature of tribal governments and reviews the history of tribal sovereignty, concluding with an examination of tribal-state compacting outside of the gaming context.

Part III examines the origins of Indian gaming, focusing on the development of the legal framework which governs tribal gaming activities and necessitates the negotiation of tribal-state gaming compacts. Given the need for tribal-state negotiations,

Part IV presents a framework for structuring and analyzing negotiations.

Part V applies that framework in the retelling of the first part of the Foxwoods story, the negotiations regarding the original gaming compact. The story of Foxwoods, however, has a second chapter involving the subsequent negotiations over installing slot machines at the casino, and Part VI uses the same analytic framework.

Part VII evaluates the change in the negotiation landscape in response to the Foxwoods negotiations and assesses the impact of technological changes on Indian gaming.

Part VIII concludes by arguing that, although the relative tribal-state positions may have changed, much of the fundamental negotiation dynamic remains the same, and thus many of the lessons of Foxwoods are applicable today.