Catawba casino violated gaming laws, report finds
The Catawba Two Kings Casino in Kings Mountain violated gaming laws and faces the potential for high fines and even the possibility of the facility's closure, according to a report from the National Indian Gaming Commission on Wednesday.
The commission, which oversees regulatory compliance and integrity for tribal gaming operations, said an investigation uncovered multiple violations of the Indian Gaming Regulatory Act. In issuing a notice of violation, the commission said that the Catawba Indian Nation allowed an outside company, developer Sky Boat, to partially manage the expansion of the Two Kings Casino without an approved management contract. The casino also failed to submit a contract for approval as required.
The law mandates that tribal casinos be run primarily for the benefit of members, not outside managers or other entities.
"Based on an exhaustive investigation and analysis of the circumstances, we issued a Notice of Violation to both enforce regulatory compliance and ensure the Nation is the primary beneficiary of its gaming revenue. We do not take this enforcement action lightly, but do so to preserve the integrity of the industry and protect the valuable tool Indian Gaming represents for many Tribes as codified in the Indian Gaming Regulatory Act,” commission Chairman E. Sequoyah Simermeyer said in a statement.
The notice requires the casino and Sky Boat to suspend payments and their lease and management agreements, which the commission alleges amounted to handing over control of the Indian casino to an outside entity. Sky Boat and the casino have 30 days to file an appeal.
The Catawba Nation, Sky Boat and associated executives could be on the hook for up to $57,527 per day in fines going forward for each violation. The gaming commission could also issue a "temporary closure order," which would shut the casino down.
Representatives from Sky Boat did not immediately return messages seeking comment Wednesday. Catawba Nation Chief William Harris said the tribe would resolve the situation.
"The Catawba Nation is committed to resolving the issues cited by the National Indian Gaming Commission regarding the lease agreements for our casino resort project with Sky Boat Partners. The issues don’t involve current casino operations," said Harris, in a statement.
A long road to slots
The Catawba Nation's attempts to open a casino go back more than a decade. The group's reservation is in South Carolina, near Rock Hill. That state doesn't allow gaming. North Carolina is friendlier to gambling operations, and the Catawbas secured a site in Kings Mountain, off Interstate 85.
Winning federal approval for the project took years, and the Catawbas had to fend off a lawsuit from the Eastern Band of Cherokee Indians, who own and operate the Harrah's casino in western North Carolina.
In July 2020, the first phase of the project finally broke ground. When complete, the casino is expected to be a $273 million facility with 2,600 permanent jobs.
“Today is truly about righting a historical wrong, and creating a brighter future for us all,” said Chief Harris at the time. “These same lands that provided so much for us in the past will now provide again, and not just for Catawbas, but also for the working people of North Carolina.”
So far, a temporary, modular facility has opened on the 17-acre site, about 35 miles west of Charlotte. There are 1,000 slots in operation. Two Kings opened a 24-hour sports book in September, the state's second such location.
Sports betting in North Carolina is already sparse with only two locations to legally place a sports bet. If operations were to close at the Two Kings Casino, it would leave a hole in sports betting in the state. The Harrah’s Casino in Cherokee, North Carolina, is the only other site to make legal bets on sports.
The casino has been the subject of additional controversy. In July, the Wall Street Journal published a story that showed politicians and their relatives were benefitting financially from ownership stakes in a company that supplied slot machines and profited from Two Kings. Those included John Clyburn, the brother of U.S. Rep. John Clyburn and Michael Haley, husband of former South Carolina Gov. Nikki Haley.
Those involved denied any wrongdoing or quid pro quo.