Potawatomi Casino Cigarettes

Anthony Bertino, marketing director for the Prairie Band Potawatomi Nation's casino, stands in front of cigarettes sold at the tribe's Nation Station store near Mayetta on Wednesday. The tribe has signed a compact with the state dealing with cigarette sales.

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TOPEKA — A sign advertising “discount smokes” outside of The Nation Station convenience store on a reservation in northeast Kansas draws Prairie Band Potawatomi Nation members and visitors looking for cheap cigarettes. Inside is a wall lined with Native American-manufactured cigarettes such as Seneca, the store’s best-selling brand at $3.77 per pack.

The tribe prides itself on its autonomy in selling tobacco products without the state of Kansas’ intervention.

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“We use terms like self-determination and sovereignty in Indian Country and that’s really what’s important to a lot of tribes, including my own tribe,” tribal chairwoman Liana Onnen said. “It’s that ability to self-govern and to self-determine how we’re going to handle our taxing and our business.”

But come July 1, the Prairie Band Potawatomi Nation and the Iowa Tribe of Kansas and Nebraska must share their accounting with the state under tribal-state compacts that passed unanimously in the Kansas Legislature and were signed by Gov. Sam Brownback on Wednesday. The compacts will prevent the state from losing $60 million in annual tobacco payments, much of which funds children’s programs such as early childhood development and reading comprehension.

The compacts enforce provisions in the 1998 Master Settlement Agreement, which gives Kansas and 45 other states payments from four major cigarette companies to compensate for health care costs caused by smoking-related illnesses. Under the agreement, cigarette companies that were not part of the settlement agreed to contribute to a so-called escrow fund that would offset the costs of tobacco payments for participating manufacturers.

But in 2003, the four cigarette companies argued that the states weren’t keeping up with their end of the bargain by “diligently enforcing” accounting for all cigarette sales and collecting escrow from non-participating manufacturers, which Kansas Attorney General Derek Schmidt said put annual tobacco payments at risk.

“If a non-participating manufacturer ships a load of cigarettes into Kansas … once that truck reaches the reservation it’s now subject to tribal sovereign authority and the state’s ability to account for those cigarettes was really very limited,” Schmidt said.

Kansas settled the dispute in 2012, and in turn, promised to crack down on online cigarette sales and account for tobacco sales on tribal lands.

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While the state is still negotiating compacts with the Kickapoo Tribe and the Sac and Fox Nation, tobacco companies that sell to the two convenience stores operated by the Prairie Band Potawatomi Nation will begin contributing to the escrow fund on July 1 and cigarettes sold on the reservation also will need to be included in a directory approved by the attorney general’s office. As a symbol of the compact, cigarettes sold on tribal lands will now feature a joint state-tribal stamp for accounting purposes.

The tribe was already enforcing a tribal tax and auditing sales, but now will have to share their reports with the state, Onnen said.

“We’re tribal citizens but we’re also citizens of the State of Kansas,” said Onnen, whose tribe’s reservation is near Mayetta, about 20 miles north of Topeka. “In the spirit of good neighbors, our goal was to help the state meet its requirements.”

Her tribe also will get a small tobacco payment from the Master Settlement Agreement, which Onnen said will likely go toward the tribe’s general fund or to health center operations.

What’s most important is that the tribe will continue selling its much sought-after discounted cigarettes, Prairie Band Casino and Resort spokesman Anthony Bertino said.

“People come to eat, they come for entertainment, they come for golf,” Bertino said. “While they’re here, this is an additional amenity for them.”