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OPINION: Rebuttal to Osage Nation CEO Kimberly Pearson

In a February 9th editorial published by the Missouri Times, newly appointed Osage Nation CEO Kimberly Pearson penned an OpEd that Lake area business owners and residents should take note. In the very first sentence, Ms. Pearson uses the terms “baseless” and “discriminatory attacks” against her tribe’s people. She is referring to comments made at the February 7th Missouri Senate Emerging Issues Committee Hearing. The Senate Committee Hearing addressed Senate Joint Resolution 14 (SJR 14). The Bill, sponsored by Senator Justin Brown in the Senate, amends the state constitution to allow gaming on the Osage River (currently this activity is limited to the Missouri and Mississippi Rivers). The bill also adds a 14th gaming license specifically designated for the Osage River between Bagnell Dam and Jefferson City. There is strong support for this legislation in the Lake area business community, and we are grateful for Senator Brown’s support. Representative Jeff Knight of Lebanon is sponsoring similar legislation in the House, and we also thank him for his support.

Several of our members attended the February 7th Senate Committee Hearing, and it was streamed live for the public. Numerous speakers spoke both in favor and against the bill. Presumably Ms. Pearson is referring to comments made by Ron Leone, Esq., Executive Director Missouri Petroleum & Convenience Association (MPCA). Mr. Leone simply articulated facts. The Osage Nation will pay no state and local taxes which creates unfair competition and a non-level playing field on which non-tribal, in most cases legacy businesses, would have to compete. Ms. Pearson referred to Mr. Leone’s comments as “racist and false”, but in fact the claims were neither. For more than a decade, members of our group have studied and been a part of the effort to bring gaming to the Lake, and we can assure you Mr. Leone’s comments were spot on. One only has to look at the dozens of other state markets where tribal status has been granted to see the pressure placed on existing businesses. The result in most cases is carnage for the non-tribal legacy tax paying entities. The Missouri fuel tax will soon reach thirty cents per gallon. Imagine a tribal convenience store selling fuel thirty cents cheaper than the non-tribal tax paying entity in the same market. Even a casual observer should note this will be devastating to the tax paying entity. You don’t have to take our word for it – this is exactly what occurred in other states such as California and Washington. Therefore, Mr. Leone was correct when he stated tribal non-tax paying entities are not the types of unfair competition Lake area businesses and residents want. But Ms. Pearson boldly states that if you are for fair competition and a level business playing field you are indeed racist.

Ms. Pearson goes on to make other dubious claims. She states that the Osage Nation plans to bring a “World Class Entertainment District” to the Lake. She touts that once completed it will be a $60 million investment. While realizing that Ms. Pearson has only been on the job for a few weeks since her predecessor resigned over documented corruption and financial mismanagement of tribal funds. She surely understands that “$60 million” is a ridiculously paltry sum to build such a facility. It would take at least a half billion dollars to build the “casino/sports bar/restaurant/convention center” or “district” that she envisions. In reality, $60 million would bring to the Lake a rustic low-end casino similar to the hundreds that scatter the US landscape nationwide. Perhaps you have seen some. If not, we encourage you to visit such facilities and you will see that few if any qualify as “entertainment districts”. Other legitimate state regulated tax paying developers at the Lake have realistic and feasible plans to build a state regulated casino and convention center.

Another claim is that “on average 90 percent of the workers at similar facilities operated by Osage Nation are non-tribal members”. If true, Ms. Pearson should provide the non-public source documents to back up her claim. There is no way to verify this claim based on Osage Nation propriety data, but we assure you based on public industry data, this is not the case in most other tribal casino markets where

the majority of tribal casino employees are tribal members, often transported from other states. In any event, most Lake area residents do not generally oppose new employment opportunities for tribal members and non-tribal members alike. Most welcome new businesses and industries provided they abide by the same set of rules and are taxed the same as non-tribal businesses. Ms. Pearson goes on to describe all the taxes that Osage Nation employees would pay but conveniently omits that the Osage Nation itself would pay no state or local taxes. Zero. This includes real estate and sales taxes. Sales tax is a significant source of revenue for local municipalities. And unlike a state regulated casino, no real estate taxes will be generated by the tribal property so Lake area school districts will receive no benefit whatsoever from a tribal casino – except perhaps the occasional “donation” from the tribe. For those who have, have had, or will have children in the local school system – think about that. One must also wonder what her source is for the claim that tribal employees are paid “above market rates”? We find no such data to support this claim.

Regarding local infrastructure, Ms. Pearson states “Osage Nation enters into agreements with local agencies for law enforcement, fire, ambulance utilities.” These agreements are actually known as “compacts”, but she omits that such compacts are entirely voluntary and at the discretion of the tribe. But you should know, that historically in many cases, tribes simply forego such agreements and handle such services internally, often with very poor results. We assure you in no instance do such “compacts” with state and local governments equate to the lost local and state tax revenue a state regulated tax paying entity would pay. Not even close, anywhere.

Ms. Pearson’s claims that the same criminal code exists on tribal properties as elsewhere is misleading. It is true that some crimes can be prosecuted, typically at the federal level, under some circumstances. However, the reality is that this seldom occurs. Remember, once a tribe is granted sovereignty, the tribal property becomes a “sovereign nation” and technically not even part of the United States. As you might imagine, the legal challenges are abundant.

Finally, Ms. Pearson refers to her tribe’s “significant philanthropic contributions to local law enforcement and other first responders, local charities, youth programs and community improvement projects”. In 2022, the Osage Nation did indeed make such contributions to the tune of around $100K. That may sound generous, but the Isle of Capri casino in Boonville generated almost $20 million in direct gaming local and state tax revenue in the same period. Stated differently, in just three days the Boonville property generated an equal amount of tax revenue as the amount contributed by the Osage Nation in an entire year. A state regulated casino scaled by models to the Lake’s demographics would be somewhat larger than the Boonville property, generating on average, more direct state and local tax revenue per day than the total amount Osage Nation contributed in all of 2022. And this does not count sales and real estate taxes that a state regulated entity would pay and of which the Osage Nation would also be exempt. In 2022, the 13 state regulated casinos in the state of Missouri generated nearly two billion dollars in revenue, of which a half billion was direct state and local tax revenue. That equates to more than 1.3 million dollars per day. The same 13 Missouri casinos as a group generate more in state and local tax revenue annually than the other 160,000 Missouri businesses combined. It is the state’s fifth largest revenue source. Perhaps Ms. Pearson can wow us with some similar “contributions” either already made or to be made by her tribe.

So Ms. Pearson listen up. The Lake area businesses and citizens aren’t racist or even opposed to the Osage Nation coming to Lake of the Ozarks to build a casino or any other economic entity for that

matter. We welcome you like any other similar business group. But please pledge up front a compact with state and local officials that at least equals the amounts that other state regulated / tax paying entities pay. This will create a level playing field and fair competition. Anything else is an insult to the Lake area businesses and citizens alike.

A final thought: At the conclusion of her OpEd, Ms. Pearson arrogantly assures us the Osage Nation is going to do exactly what they say they are going to do – build a tribal casino at the Lake. This seems to imply they have all the necessary approvals, which is not the case. While it seems likely the Osage Nation will be able to prove their ancestral background in the Lake area (few doubt that) it seems far more unlikely that Governor Mike Parson will sign off on granting the Osage Nation “sovereignty”. This is a crucial final step that at this point seems out of reach. Why would Governor Parson want his final legacy to be creating an environment that is totally unfair to local Lake area businesses? Many of our group and the same constituents who elected Mike Parson Governor. Twice. The Governor almost certainly knows a state regulated casino is a far better option for the Lake area and local businesses.