Fred Dakota Founded Native American Casinos —In a U.P. Garage

Eventually, a $1,000-night was not such a big deal. Brad recalls closing up in the middle of the night and carrying out lock-boxes with $10,000 in them. “I’d just take them to Dad’s house—it was a different time,” he says.

So, how was it that the state police didn’t raid the place and shut it right down? Here’s Fred Dakota’s reasoning for why he was legal. The state of Michigan already allowed casino gambling for something called Millionaire Nights. Nonprofit groups were allowed to hold Millionaire Nights three times a year, and customers could take part in limited gambling. With state policy allowing gambling in certain situations, it was certifying the activity as legal but regulated, like, say, distributing alcohol—it’s legal to do it, but you have to abide by certain rules. And since Indian reservations had the right to regulate legal activities, and since the tribe had written regulations for casino gambling, and since Dakota had a casino license based on those regulations, he was legal. This line of reasoning was ultimately rejected by the courts on various grounds, but Dakota ran with it.

Dakota’s garage quickly became too packed, standing room only. Within a few months he knew he needed a bigger place, so he leased some land from the tribe in Baraga, right along U.S. 41, and hired the tribal construction company to build a 3,200-square-foot casino, intending to open July 4, 1984.

“I had everything bought,” he says. “Maybe 15 blackjack tables. I had a regular length craps table. And I had about 26 employees.”

But the tribal council was not in full support of the new casino, and when it came time to move in, the tribal police visited the casino and told Dakota he couldn’t operate a casino there because his license was only valid in Zeba. He couldn’t appeal the decision until the next tribal council meeting, which was a month away. Staying true to form,Dakota told the tribe, “I’m moving in anyway.”

He opened up July 4 as planned in defiance of the tribal council, and the tribe called the U.S. Attorney General’s office. It took a year for the case to be decided, and Dakota continued to operate the casino in the meantime. The judge ruled that the casino violated Michigan’s gambling laws, and he made a point to say Michigan’s laws stipulated that gambling can only be performed by non-profit organizations, not private individuals or corporations.

That decision shut down Fred Dakota’s Pines casino 18 months after he started it in the Zeba garage. He appealed and lost again in the Cincinnati federal appeals court, and he would have taken the case to the U.S. Supreme Court, but by then, all the money he’d made in the casino had been spent on legal fees.

“Ironically, had he been able to afford another appeal he may have prevailed,” says Joseph O’Leary, a former KeweenawBay tribal attorney and now county prosecutor. “Barely a year later, essentially the same legal reasoning he relied on waslegitimized by the Supreme Court, which upheld the authority of the Cabazon Band of Mission Indians in California to regulate gambling activities that were not criminally prohibited by state law.”

The impact of the Dakota decision did, however, go far beyond shutting down The Pines. Michigan tribes were quick to seize on language in the ruling that stated gambling is legal only for non-profit organizations. Tribes are, after all, nonprofit organizations.

Within a matter of weeks, the Bay Mills Tribe introduced casino gambling, and shortly after that the Grand Traverse Band expanded its bingo operation to include casino gambling. Each expansion pushed the bounds of Indian gaming and had implications nationwide. There were still uncertain years ahead, with government attempts to reign in Indian gamblingat various casinos around the nation, and tribes really didn’t have solid footing for gambling until Congress passed the Indian Gaming Regulatory Act in 1988.

Article Comments

  • Della Jestila

    Wonderful Fred I remember it all and you are a most intelligent individual with foresight and commitment… Best to you