KANSAS CITY, KAN. ? A seven-year legal battle over a proposed tribal casino in downtown Kansas City, Kan., continues to rage in the courts.

The latest development involves an appeal by the state of a federal agency’s decision that was favorable to the tribe.

The Wyandotte Tribe left Kansas more than a century ago for its reservation in Oklahoma. Since the early 1990s, Kansas officials have blocked the tribe’s efforts to build a casino on or near its historic burial grounds across the street from City Hall.

Now the state is back in federal court in Kansas City, Kan., challenging an Interior Department ruling handed down in June but not released until this week. The department reaffirmed its earlier decision that land adjacent to the cemetery purchased by the tribe seven years ago is de facto reservation land eligible for tribal gambling.

The state argues that the decision was “legally wrong” and “turned a blind eye and deaf ear to the obvious facts” in the case.

The state said the decision also disrespected sacred tribal burial grounds, and in the long run could financially harm Kansas’ four indigenous tribes that operate legitimate reservation casinos in northeastern Kansas. Those tribes also are plaintiffs in the state’s new case.

Wyandotte Chief Leaford Bearskin referred questions to the tribe’s Oklahoma lawyer, who did not return a call.

Issues in the case have been argued in court for years, decisions appealed and the issues reargued. Now the cycle is starting again.

Keith Wallace, president of the Oklahoma tribe’s Wyandotte Gaming Enterprises entity, said the state’s latest legal move was expected.

Temporary pool hall

Until the matter is finally settled, Wallace said, the tribe may convert its proposed casino into a temporary pool hall and tavern.

“We’re considering it,” Wallace said in an interview earlier this week inside the empty casino building.

“Everything’s going out and nothing is coming in,” he said of the facility’s revenues. “We could put a bar and some pool tables in here and make a little money for the tribe.”

Outside, a work crew was busy this week removing trees and preparing an area for a parking lot.

The structure is occupied by a half dozen linked mobile building units that create an interior expanse of less than 4,000 square feet.

Wallace said the structure was ready for final decorating and installation of gambling equipment.

Last year the tribe moved several slot machines onto the premises, but removed them when state officials launched an investigation.

The trailers would serve as an interim casino while a dilapidated, former Masonic temple next door was remodeled as a permanent casino and restaurant.

Cemetery plot

The buildings are adjacent to the tribe’s historic Huron Cemetery, which dates to the 1840s and may contain as many as 400 human remains.

Tribal officials several years ago proposed moving those graves and building a casino on the grounds, or erecting a casino on pilings in the air rights above the cemetery.

Republican Sen. Sam Brownback of Kansas challenged those plans and won passage of federal legislation barring any commercial use of the cemetery grounds.

The tribe purchased the old Masonic building in 1996 and petitioned state and federal authorities to approve it for casino gambling under terms of the 1988 Indian Gaming Regulatory Act.

Federal agencies appear agreeable, but the state and Kansas’ four reservation tribes in rural Brown and Jackson counties sued and have been in court ever since.

Additional plans

Wallace said the tribe would not give up its fight to open a casino in Wyandotte County, including other plans for a casino and resort hotel near Kansas Speedway.

That project could move forward in a deal dependent on state and congressional approval in exchange for the tribe’s dismissal of a pending lawsuit that claims historic land rights to nearly 2,000 acres in the Fairfax Industrial District in Kansas City, Kan., including the site of a General Motors auto assembly plant.

Sticking point

The latest legal development turns on an obscure side issue that appeared to be resolved last year.

In 1984, the federal government paid the tribe $100,000 in long-delayed compensation for lands in Ohio that it ceded to the United States when the tribe moved to Kansas in the 19th century.

The tribe contended it used that money 12 years later to buy the Masonic building, which, under law, automatically placed the site in Interior Department trust.

That federal trust status, now reaffirmed, makes the land eligible under federal Indian gaming law for Class II gambling activities, which includes bingo and electronic pull-tab games that look and play like slot machines.

Unless overturned, the Interior Department ruling also removes one of several remaining obstacles to full-scale, Class III gambling, which permits traditional slots and table games such as craps and blackjack.

The issue is money. The state contends tribal bookkeeping over the years and a recent audit could not verify that funds used to purchase the land and building were the same $100,000 in federal compensation that qualified the site for automatic trust status.

If other tribal funds were used, the state argues, trust status and Class II gambling authority is not automatic under federal law.

Instead, the casino project would be subject to other requirements, including state approval, federal environmental impact reviews and state oversight on any remodeling of the ornate Masonic building, which is listed on the National Register of Historic Places.

Past revisited

The Interior Department’s latest decision reaffirmed its initial ruling in 1996 that use of the funds and trust status were proper.

State officials contend that the land and building cost at least $160,000 and maybe in excess of $300,000, while other records show the tribe spent at least $25,000 of the original $100,000 years ago to buy land near Wichita. Other records show some of the Masonic building purchase was financed through a loan.

The Interior Department ruling did not explain how officials arrived at their conclusions.

It only noted that the tribe was permitted to use interest and investment earnings derived from the original $100,000 toward the purchase.

The state’s appeal, in the form of a new lawsuit, puts the case back on track for another trial on the same issues and makes likely another appeal to the 10th Circuit by whichever side loses.