Las Vegas-based casino management company Gaughan Gaming lost its request for a temporary restraining order against the Tonkawa Indian Tribe of Oklahoma that suspended its license to operate two north-central Oklahoma-based casinos, reported the Associated Press. Still, U.S. District Judge Joe Heaton of Oklahoma City decided to keep the case in his court.
Since 2007, the Tonkawa Indian Tribe maintained a profitable partnership with the casino management company, reported the Las Vegas Business Press.
Gaughan Gaming managed the tribe’s two casinos, Tonkawa Indian Casino and Native Lights Casino, which netted more than $52 million in revenues since 2006. “Gaughan Gaming helped the tribe make an audited $52 million,” John Gaughan, operator of Gaughan Gaming, told the Las Vegas Review-Journal in March. “I had some concerns where this money was going and we started asking some hard, serious questions because of the tribe’s history with money. Those questions made the tribal government very uncomfortable.”
The relationship took a nose dive, and on September 28, 2010, the tribe evicted Gaughan employees from its casinos, reported the Associated Press.
On March 22, Gaughan Gaming filed a lawsuit in federal court alleging the tribal officials violated management agreements by barring them from the properties. The lawsuit seeks $30 million and to stop the Tonkawa Tribal Gaming Commission from suspending Gaughan’s gaming license.
Because Gaughan helped fund casino operations, the management company should receive 30 percent of the casinos’ net profits for its services, according to the agreement, reported the Las Vegas Business Press. “Prior to the tribe’s forced eviction of Gaughan Gaming, Gaughan Gaming handled every aspect of the casinos’ operations, including without limitation advertising, marketing, employee-customer relations and gameplay,” the petition states, reported the Las Vegas Review-Journal. “Each of these elements of the casinos’ operations ties directly to the casinos’ profitability and ultimately the net profits.”
The Tonkawa Tribe waived its sovereign immunity for the remaining claims, leaving jurisdiction in the federal judge’s hands. “We are pleased with important parts of today’s decision, even though Judge Heaton exercised caution and did not enjoin the Tonkawa Gaming Commission from proceeding with the hearing,” D. Michael McBride III, an attorney for Gaughan Gaming said in statement.