The tribe that runs the Fond-du-Luth Casino in downtown Duluth owes the city $10.4 million in back payments, a U.S. District Court judge ruled this week in a protracted dispute over gambling revenues.
But the fight isn't over, yet.
In 2009, the Fond du Lac Band of Lake Superior Chippewa stopped paying the city "rent," a slice of the casino's gross revenue, as outlined in long-standing agreements. The opinion Tuesday ordered the band to pay Duluth the money it withheld from 2009 to 2011, leaving the amount of interest and some revenues to be sorted out at a later trial. (City attorney Gunnar Johnson said that by his count, the band owes about $12.4 million.)
City leaders applauded the ruling, saying it will restore millions they had been counting on for street repairs. The city received about $6 million from the casino annually.
"The casino was established in our downtown ONLY because of the common agreement between the band and the city, and that agreement should be honored," Mayor Don Ness wrote on Facebook. "Had we not defended our rights, this $12 million would have been lost."
This week's ruling "really wasn't a surprise to us," because the same judge had issued a similar opinion before, said Karen Diver, chairwoman of the Fond du Lac band. The band's leaders have not yet met with legal counsel, she added, but "it could be appealed."
The band has paid the city about $75 million under a 1994 contract, according to Judge Susan Richard Nelson's 23-page opinion. But it has also "benefited substantially" from those agreements, she wrote, earning $175 million in net profit from 1994 to 2009.
"And since the band stopped payments in 2009, it has profited more than $20 million while receiving the city's services for free," Nelson said.