A federal appeals court has ruled against the city of Duluth in its long-running contract dispute with the Fond du Lac Band over its downtown casino.
In 1986, Duluth and the Fond du Lac Band of Lake Superior Chippewa teamed up on the Fond du Luth casino, the first downtown tribal casino in the country. In 1994 they agreed Duluth would receive 19 percent of the casino's slot revenues, about $6 million a year.
For years those funds have been the main source of city income to repair streets. But in 2009, the band stopped paying, arguing the deal violated federal law requiring tribes to have the "sole proprietary interest" in their casinos. The lower court and now a three-judge panel of the 8th Circuit Court agree the deal is illegal.
Duluth Mayor Don Ness says at stake is more than $12 million the band withheld, plus millions in future revenues.
"The consequences to the residents and taxpayers of the city of Duluth are far reaching and devastating," Ness said.
Duluth plans to appeal the decision to the full 8th Circuit Court of Appeals.
Fond du Lac Chairwoman Karen Diver said Duluth has already profited from the deal.
"The city has been paid over $80 million to date. One would expect that that was more than adequate to pay for whatever it is they thought that they expected," Diver said.
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