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Tribal Leader’s ‘80s Garage Casino Paved Way for Native American Casino Industry

Tribal Leader’s ‘80s Garage Casino Paved Way for Native American Casino Industry

Fred Dakota

expanded Native Americans’ authority to operate and regulate their own businesses when he opened a casino in a two-car garage on a Michigan reservation in 1983.

His low-budget, short-lived operation challenged a state ban on casinos that had effectively kept casinos off tribal property. Mr. Dakota said the state law couldn’t be applied to casinos on reservations owned by Native Americans.

The U.S. Congress would eventually agree, passing legislation later during the 1980s that sanctioned tribal casinos, clearing the way for the creation of a casino industry on reservations that now generates more than $30 billion of gross revenue annually, according to the federal government’s National Indian Gaming Commission.

“He was really the father of Indian casino gambling in the United States,” said Russell Magnaghi, a history professor emeritus at Northern Michigan University.

With a family of five children to care for, Mr. Dakota decided to open a casino after failing to get enough votes from the tribal council in 1982 to retain his paid position as chairman of the Keweenaw Bay Indian Community. A few years earlier the council had amended the tribe’s legal code to allow bingo games and casino gambling on the community’s reservation on the west side of Michigan’s Upper Peninsula.

Mr. Dakota, who died Sept. 13 at age 84, was the tribe’s first recipient of a casino license. He opened the business in his brother-in-law’s renovated garage on New Year’s Eve of 1983. He dealt blackjack with chips and cards he bought at a drugstore, while his wife handled bartending duties. His children and other relatives helped out as well.

The casino was popular, though some early patrons were apprehensive since casino gambling everywhere else in the state was illegal at the time, said Warren Swartz Jr., Mr. Dakota’s nephew and current president of the 3,600-member tribe.

“A lot of people were afraid they were going to get arrested,” Mr. Swartz said.

Mr. Swartz said Mr. Dakota told customers that state and federal authorities lacked jurisdiction over the casino, because the tribe licensed the business under its own laws and had sovereignty over its reservation from a treaty with the federal government dating to the 1850s. By the 1980s, casino gambling had become one of several flashpoints between state governments and tribes wanting more control over their operations and businesses.

“He took a firm step on tribal sovereignty,” said Mr. Magnaghi.

Mr. Dakota’s casino was so successful he began looking for a bigger location a few months after opening. He moved from the garage to a bigger building in Baraga, Mich., later in 1984 that he called The Pines casino. Federal authorities moved to shut down that business on grounds that Michigan prohibited casinos. Mr. Dakota continued to operate The Pines for several months before closing.

A federal judge later upheld Michigan’s ban on commercial casinos owned by for-profit companies and individuals, including Mr. Dakota. But the ruling noted the state had already allowed limited gambling operations by nonprofit groups. Michigan tribes, including Mr. Dakota’s own Keweenaw Bay Indian Community, quickly seized on their nonprofit status to push forward plans for tribal-owned casinos.

Fred Dakota, in an undated photo provided by his family.

Mr. Dakota was born in tiny Zeba, Mich., and lived in a log house with his mother and grandmother. When he was about five years old his grandmother died of tuberculosis. During a 2012 interview with Mr. Magnaghi, Mr. Dakota said after her death he was sent to a nearby orphanage where he lived for several years before reuniting with his mother and stepfather. He had a brother and two sisters. Mr. Dakota became involved in tribal government in the late 1960s, becoming tribal chairman in 1970.

He returned to the tribal council during the 1980s and eventually became chairman again, overseeing the tribe’s burgeoning casino operations in the Upper Peninsula. His leadership of the tribe became polarizing during the 1990s. Dissident members occupied the tribe’s headquarters for 18 months beginning in August 1995, protesting a decision by the tribal council to void the results of the 1994 council election and disqualify 200 voters for being ineligible. Mr. Dakota’s opponents denounced that move as an abuse of power.

Mr. Dakota relinquished the chairman’s job after a 1997 conviction on federal charges that he took kickbacks and committed tax fraud when he received money from a representative of a slot machine company that leased machines to the tribe. Mr. Dakota said the payments were for consulting work on a lottery game. He spent 30 months in prison. He was elected to the tribal council again in the early 2000s and served until 2018.

He is survived by his wife, two sons, three daughters and several grandchildren.

Write to Bob Tita at [email protected]

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