A federal investigation into the Catawba Nation’s casino project in Kings Mountain is a standard review of the tribe’s agreements and operations and is not focused on the relatives of politicians receiving money from casino vendors, the Catawba said in a statement.
The National Indian Gaming Commission spokesperson confirmed to WRAL News that there was an ongoing investigation but didn’t elaborate on the nature of the investigation or whether individuals or organizations were the targets of the probe.
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The Catawba said the NIGC “expressly told us that this was limited ‘to the requirements of the Indian Gaming Regulatory Act, including ensuring that the tribe maintains the sole proprietary interest in its gaming operations. Actions by the tribe’s vendors outside the confines of the IGRA are not within the scope of the agency’s jurisdiction.’”
The Wall Street Journal first reported the existence of an investigation. The newspaper reported that relatives of prominent South Carolina politicians, including the brother of U.S. Rep. Jim Clyburn, were small stakeholders in a company that provided slot machines to the casino and received regular payments from the proceeds of the machines.
Clyburn’s congressional office said he was unavailable for comment but that he was not involved in any investigation. Clyburn, who wrote legislation to secure the Catawba’s land in North Carolina, told the Journal that he didn’t care if his brother was making money off legislation he helped enact. “He gets to make a living. I don’t get his permission, and I don’t give him mine,” Clyburn told the Journal.
A high-profile Republican lawyer and a Democratic political operative also hold small stakes, indirectly, in a slot-machine leasing company, which gets 20 cents of every $1 in profits the casino generates from its slot machines, according to the Journal. They hold stakes in AGS of North Carolina, a company that has a 10.1% stake in King Mountain Equipment Supply, according to the Journal.
Several former local North Carolina politicians or their relatives also have stakes in King Mountain Equipment Supply, the Journal reported, citing documents it reviewed. The Journal didn’t name the North Carolina politicians but reported that it spoke with them. One said his wife invested and the other said he was given shares, according to the Journal.
The Indian Gaming Regulatory Act says that net revenues from any tribal gaming are not be used for purposes other than funding tribal government operations, providing for the general welfare of the tribe and its members, promoting tribal economic development, donations to charitable organizations or funding the operations of local government agencies. Contracts for supplies, services or concessions above $25,000 annually are subject to independent audits.
The act caps as a percentage of revenue the amount tribes can pay for management fees.
“The Catawba Nation continues to work closely with the National Indian Gaming Commission on its standard review of our casino project,” the tribe wrote in the statement.
There is no timeline for construction the planned $273-million facility.
The Catawba, a South Carolina-based tribe, sought for years to build a casino in South Carolina, but failed. In March 2020, the U.S. Department of Interior put into a trust 17 acres in North Carolina for the Catawba Nation. The tribe claims ancestral ties to the land, citing, in part, the names of Catawba County and Catawba College. In March 2021, North Carolina and the tribe signed a gaming compact, allowing for the construction of the casino and allowing the state to share in the revenues. In December, the Interior Department’s decision was codified into federal law after a Clyburn-sponsored bill was included as part of a huge budget agreement and signed into law by President Joe Biden.
The Catawba have opened a temporary casino in Kings Mountain, first with 500 slot machines but has grown to about 1,000. The casino plans to offer legal sports gambling this football season, becoming the third in-person sports betting facility in North Carolina. A bill to legalize online sports gambling failed in the state House by a single vote in June.
On July 1, the one-year anniversary of opening the temporary facility, the Catawba issued an update on the permanent casino. The tribe said that work was underway on two Catawba Nation-funded infrastructure projects needed for the resort: doubling the size of a bridge over I-85 near the casino entrance and new sewer lines. At that time the vice president of the tribe’s gaming authority said the “plans for the full casino and necessary agreements are undergoing a thorough review by the National Indian Gaming Commission.” He added that a timetable for construction “is anticipated” to be announced later in the year.