Federal judge upholds state casino law; provisions on possible tribal casino survive challenge

By Mark Arsenault, Globe Staff

Advantages extended to a Native American tribe in the state’s new casino law are constitutional and will be allowed to stand, a federal judge has decided, dismissing a challenge to the law by a developer seeking to build a casino in New Bedford.

The developers, KG Urban Enterprises, filed their suit hours after Governor Deval Patrick signed the casino legislation into law in November. KG Urban had alleged that the casino act gives a federally-recognized Indian tribe “explicit, race-based” advantages, by delaying open bidding on development rights to a commercial casino southeast region of the state until at least August, to give a tribe — presumably the Mashpee Wampanoag — time to make progress toward winning federal approval for a tribal casino.

KG Urban had argued that “the Act’s racial set-aside provisions for Indian tribes” was likely to deny the developer the opportunity to ever bid on building a commercial casino in New Bedford. The company was seeking an injunction.

But US District Judge Nathaniel Gorton sided with the state, saying the new casino law conforms with the Indian Gaming Regulatory Act, known as IGRA, a federal statute under which tribes can build casinos in Indian land. IGRA outlines procedures for a tribe to negotiate the operating details of a tribal casino in a compact with their state governor.

The new state “Gaming Act does not create a separate tribal gaming regime in Massachusetts but rather establishes the procedures by which IGRA-authorized compacting may take place under Massachusetts law,” Gorton wrote. “Far from conflicting with IGRA [state law] advances the congressional directive that tribes and states negotiate compacts to govern gaming on tribal lands.”

The new state casino law passed last year divided the state into three regions, authorizing up to one casino in each region. The development rights will be awarded through open competition. A number of major companies have already stepped forward.