A recent federal court ruling stating that Osage County is not an Indian reservation may have profound implications for at least three of the Osage Nation's casinos, including its largest casino in Tulsa.

Three of the tribe's Million Dollar Elm casinos sit on land that is not in trust with the U.S. government or under federal restricted status, meaning the casinos could fall under the jurisdiction of state law, which prohibits gambling.

According to the Osage County Assessor's Office, the Million Dollar Elm casinos in Tulsa, 951 W. 36th St. North; Skiatook, 6455 W. Rogers Blvd.; and Ponca City, 73 N. City View Road, are owned by the tribe, which pays property tax on the land, but the land was never put in trust or under restricted status with the federal government — a necessary component for tribal gaming operations to occur in states where gambling is illegal.

The tribe operates seven casinos in Osage County, the largest of which is the Tulsa casino. Its casinos in Sand Springs, Hominy and Pawhuska all sit on land owned by the tribe and in trust status, according to the County Assessor's Office. The tribe's Bartlesville casino sits on land owned by an individual and is subject to property tax, according to the assessor's office, but the land has restricted status and the casino is in compliance with the Indian Gaming Regulatory Act, tribal officials said.

The three casinos in question have been operating under a 2005 National Indian Gaming Commission determination that the Osage Nation reservation was still in existence, meaning the tribe could operate casinos within the boundaries of the reservation.

 However, according to a decision handed down in January 2009 by a federal judge in Tulsa and a March decision by the 10th U.S. Circuit Court of Appeals in Denver, the Osage reservation was "disestablished by Congress."

The appeals court ruling stated that the 2005 NIGC determination, a gaming compact with the state of Oklahoma for Class III games at its casinos, and other evidence submitted by the Osages was too far removed from Congress' intent to disestablish the reservation in 1906 when it passed the Osage Allotment Act, which put mineral rights on the former reservation in trust with the federal government and allotted parcels of the reservation land to individual tribal members.

"The legislative history and the negotiation process make clear that all the parties at the table understood that the Osage reservation would be disestablished by the Osage Allotment Act, and uncontested facts in the record provide further evidence of a contemporaneous understanding that the reservation had been dissolved," the ruling stated.

The tribe filed the lawsuit in 2001 against the Oklahoma Tax Commission, and asserted that federal law prohibits states from taxing income of tribal members who live and earn income in what the law defines as Indian Country. Since the appeals court ruling, the tribe has filed a request for the 10th U.S. Circuit Court of Appeals to rehear the case.

The NIGC is aware of the situation and is awaiting further developments, said Shawn Pensoneau, spokesman for the NIGC.

"The NIGC is going to continue to regulate the Osage Indian gaming properties until the tribe exhausts all of its legal potential," Pensoneau said. "When the tribe exhausts all of its legal potential, then we will reassess it at that time."

Under the tribe's gaming compact with the state, tribal gaming can only occur on land authorized for gaming under the Indian Gaming Regulatory Act, said State Treasurer Scott Meacham.

Meacham said he has not been approached about the situation but will look at the case, and that the state would likely wait for an NIGC determination on the matter before taking any action.

The Oklahoma Office of State Finance's Gaming Compliance Unit, which monitors state-tribal gaming compacts and revenue, will also wait for a ruling on the land status by the NIGC and U.S. Bureau of Indian Affairs, said Derek Campbell, gaming compliance lead at the Office of State Finance.

"The compacts allow gaming on Indian lands as defined by IGRA," Campbell said. "Since land determinations and enforcement of IGRA falls under the NIGC and ultimately the BIA we will monitor their response, before determining a course of action."

Osage Nation Principal Chief Jim Gray could not be reached for comment.

However, the some tribal leaders say the prospects of winning the case before the appeals court or the U.S. Supreme Court are slim, and that the tribe should have tried earlier to put the land in trust, a process that often takes years.

"Those three are our highest grossing casinos. It would pretty well devastate us. I estimate it would take half to three-quarters of our net income. Once those appeals run out, it's illegal to game on that property," said Kugee Supernaw, Osage Nation congressman. "This land could have been put in trust a long time ago. It was probably an error in judgment someone made several years ago. They should have pursued it instead of assuming we were going to win the tax case."

Supernaw said the tribe should begin trying to get the land in trust as soon as possible, and that he thought the prospect of further appeals succeeding was not good.

"We want to hope for the best, but prepare for the worst. I think we need to face up to the fact we might be facing a worst-case-scenario and prepare for it so it doesn't just devastate us," Supernaw said. "It would be great if they ruled we have a reservation, but the likelihood of that happening is not very good, I don't think."

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