Casino gambling has been part of Michigan’s economic landscape since the 1980s, so it’s easy to take them for granted. However, they used to be illegal, and even tribal sovereignty wasn’t enough to open a casino in the state. But in 1981, one man laid the groundwork for Michigan’s tribal casinos. With a little ingenuity and a great deal of firm defiance, Fred Dakota became the grandfather of Michigan’s casinos.
And it all started with a few table games in his garage.
A Tribe Administrator’s Unseating
In 1980, Michigan endured a massive recession. Unemployment hit 16.8% and Native American tribes were in dire straits. During a tribal meeting among the Keweenaw Bay Indian Community, elder Helene Walsh suggested regulating casino gaming rules. Casino gambling was illegal in Michigan at the time, but the elders figured the tribal compacts gave them the independence to regulate gaming on their reservation. It would be a much-needed source of funds, so they put gaming rules together. The next spring, the rules were drafted and approved. The first bingo game followed shortly after.
State regulators bothered tribe administrator, Fred Dakota a little, but bingo eventually became a successful venture. But in 1982, Fred Dakota was voted out of the administrator position. That left him unemployed and looking for stable work again. After his experience with the Keweenaw Bay tribe, he decided to open his own casino.
In 1983, he got a license under the same rules whose implementation he oversaw. One $10,000 loan later, he put a casino together in his garage. His tiny casino called ‘The Pines’ opened on New Years Eve, 1983. It was a massive hit, and he moved to a larger location in a matter of months. In a year and a half, Fred Dakota went from unemployed to the owner of the first Indian casino in Michigan.
The Federal Lawsuit That Took Fred Dakota Down And Expanded Tribal Gaming
Despite his success, Fred Dakota ran into serious legal trouble. He claimed that tribal independence gave him the right to operate a casino. He’d received his license from the tribe, so he figured he was operating legally. However, the federal government disagreed. Casino gambling was still illegal in Michigan, and the federal government believed that the Keweenaw Bay couldn’t overrule state law–even if the casino adhered to tribal law.
Fred Dakota lost the lawsuit and had run out of money to fight it. The Pines closed and once again, Fred Dakota lost his position.
But the way he lost expanded tribal gaming across Michigan. The 6th Circuit viewed The Pines as a private commercial business rather than a true tribal one. The judge believed Fred Dakota’s casino lacked the “tribal benefit” that characterized tribal casinos. So, despite its tribal license, The Pines had to be shut down.
But in its place, new tribal casinos opened across Michigan. In the wake of these openings, the Supreme Court also ruled on two cases that solidified Native American rights to regulate gambling on their reservations. Shortly afterwards, Congress passed the Indian Gaming Regulatory Act to manage the new dynamics between states and tribes.
After a flurry of case law and congressional legislation, Michigan’s tribal casinos became the legal gaming halls that Michigan residents recognize today.
What About Detroit’s Three Commercial Casinos?
After tribal casinos got the state and federal okay, commercial casinos followed swiftly thereafter. In 1996, Michiganders voted for the Michigan Gaming Control and Revenue Act. It legalized commercial casinos in Detroit and passed with 51.5% of the vote.
Once the bill was passed, the Mayor had set up a committee to figure out how to get commercial casinos in Detroit. They came back with a report in 1997 that recommended:
- Grouping three casinos in Detroit’s Business District.
- Making Detroit residents at least 30% of the casinos’ staff.
- Do not allow temporary casinos.
These aren’t the only recommendations, but they are the ones that dictate how the 1996 bill should’ve been implemented. (The other two were getting development sites and setting up a Development Agreement to fund various Detroit initiatives.) Here’s how those three pivotal recommendations geared Michigan’s casinos toward providing short and long-term stability to Detroit.
Detroit’s Casino Cluster
Clustering the casinos together in the Business District seemed to have the 1980’s Michigan Recession in mind. At that time, most of Michigan’s population was concentrated in the Detroit tri-county area. Putting three commercial casinos in Detroit would’ve served most of Michigan’s population. Keeping the casinos together likely represented a strong desire to build a thriving business district near the biggest residential districts.
Detroit’s Staffing Requirements
The proportion of staff was likely a desire to keep Detroit’s employment rate high. This Committee’s report was only 17 years after Michigan’s 1980 Recession. That’s recent memory for an economic downturn.
Dennis Archer also succeeded Coleman Young, who’d served as Detroit Mayor for 20 years. Mayor Archer would’ve been searching for an economic initiative that would leave a positive mark on Detroit’s economy. This is evidenced by his desire to bump the 30% locals employment requirement up to 50%. That’s an aggressive focus on employing Detroit residents, and would’ve secured jobs for his constituency.
Detroit’s Advice Against Temporary Casinos
Avoiding temporary casinos would’ve ensured short-term stability for Detroit. It would’ve prevented licensing conflicts and temporary employment decreases.
There were only three casinos allowed per the 1996 bill, so temporary casinos would’ve caused confusion among bureaucrats and casino patrons. No one has to wonder whether a temporary casino can coexist with one of the permanent ones, and it doesn’t take customers away from the three approved casinos.
It also keeps employment numbers from arbitrarily decreasing during the transition. That keeps temp agencies from having to move employees from a temporary casino. It helped ensure the new casino employees would have stable jobs, especially in the wake of a measure that barely passed. Keeping employment numbers from decreasing also would’ve been advantageous to avoid for the next mayoral election.
Michigan’s Casinos Today
Today’s Michigan casino industry is a thriving landscape. Detroit has three commercial casinos (MGM Grand Detroit, MotorCity Casino, and Greektown Casino) and 26 tribal casinos. After the 2019 sports betting bill was signed into law, sportsbooks got to partner with Michigan’s casinos and bring sports betting to Michigan’s casino scene. Online sports betting could be coming late 2020 or early 2021, which will further expand Michigan’s gaming industry.
However, COVID-19 hit Michigan gaming hard. Michigan’s three commercial casinos lost at least four months of revenue in 2020. That’s four months of tax revenue the city lacks.
Michigan is in yet another economic downturn. But once the casinos can reopen safely, Michigan is well-poised to recover. Money may be tight at first, but Michigan’s casinos are vital pieces of Detroit’s and Michigan’s tribes’ economic infrastructure. They’ll help Michigan recover from the pandemic’s economic impacts in the long run.
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