Monday, January 30, 2006

DOYLE GIVES TRIBES SWEETHEART DEAL "IN PERPETUITY"


7 more tribes sign gaming compacts
Casino deals would be permanent
By STEVE SCHULTZE
sschultze@journalsentinel.com
Last Updated: April 25, 2003

Madison - Gov. Jim Doyle and leaders of seven tribes completed permanent gambling agreements Friday that would abolish most limits on casinos - something state and tribal officials say will mean $105 million in payments to the state over two years and various tribal expansions.
The deals mirror most provisions of the gaming compact approved earlier this month for the Forest County Potawatomi tribe, which operates one of the state's largest casinos, in Milwaukee.

The casinos, now limited to slot machines and blackjack, would be permitted to add roulette, craps, poker and virtually any other table game, and to offer betting on televised horse or dog races. The old $200 limit on blackjack bets is gone. And the new gambling agreements have no set duration, a key point for the tribes' ability to secure long-term financing for expansions. The old compacts expired after five years. The new terms require approval by the U.S. Bureau of Indian Affairs, which has 45 days to review them. The bureau approved the Potawatomi compact earlier this month.

"These compacts are good news for the tribes and the communities" near casinos, Marc Marotta, secretary of the state Administration Department, said at a Madison news conference.

He also called the deals "very welcome news for Wisconsin taxpayers" because of the gambling payments the state would receive.

The seven tribes signing new agreements with Doyle were the Oneida, Ho-Chunk and Menominee and the Bad River, Sokaogon (Mole Lake), Lac Courte Oreilles and Red Cliff Chippewa bands.

The Oneida released a statement Friday, saying the new agreement was prompted by "the need to create a stable and competitive gaming industry." The tribe also called for an end to "political and media attacks."

GOP blasts deals

Friday's gambling compact signings immediately provoked Republican legislators, who said Doyle could have gotten more money with stricter limits.

"It's such a huge expansion for such a small payback," said state Sen. Bob Welch (R-Redgranite). "The outrage continues."

Doyle's administration now expects to get more than $200 million total over the next two-year budget period, from all 11 Wisconsin tribes, Marotta said. That's down some from the original $237 million estimate from Doyle, perhaps in part because of the political opposition to the deals that's boiled over in the Legislature, Marotta said.

"It hurt our momentum significantly, so we may come up a little short," he said.

Republicans, who control both houses of the Legislature, have battled with Doyle over gambling since February, including filing a lawsuit and passing two bills to give themselves a say in the deals. Doyle vetoed both measures.

Doyle, during a visit to Racine on Friday, scoffed at the idea that the agreements, while falling short of his goal, amounted to a shortfall - something his Republican critics charged.

"It's $210 million more that we didn't have before," Doyle said. "It's a lot of additional revenue that is important to the state."

The Democratic governor added that he will later propose a way to make up the difference.

With the new agreements, "Wisconsin is receiving more (tribal gaming) money by far than any other state" except Connecticut, Doyle added. Connecticut will get an estimated $400 million next year from two tribes.

Ho-Chunk, Oneida to pay most

Of the seven new deals signed Friday, the Ho-Chunk and Oneida tribes would pay the vast majority in "revenue sharing" payments to the state. The Ho-Chunk would pay $60 million over the next two years and the Oneida $40 million.

By comparison, the Potawatomi tribe previously agreed to pay the state $84 million over the 2003-'05 state budget period.

The other five tribes whose gambling deals were signed Friday taken together would pay about $5 million over the next two years, Marotta said. He didn't provide a breakdown but said most of those have relatively small incomes from their casinos.

In future years, Marotta estimated, that gambling revenue to the state from all tribes would amount to about $100 million a year. Formulas for payments change in subsequent years to a percentage of the "net win" from casinos, the total amount bet minus prize payouts.

Those percentages vary from tribe to tribe. The Oneida, for example, would pay from 4.5% to 6% of net win from 2006 and beyond. The Ho-Chunk would pay from 6% to 8% of net win starting in 2006.

Tribes with smaller casinos would have lower rates for state payments: nothing if casino revenue is less than $5 million; 1.75% if revenue is $5 million to $35 million; 3% if revenue is $35 million to $80 million; and 4.5% if revenue exceeds $80 million a year.

Some tribes may pay relatively little over the next two years, to give them a chance to expand their operations, Marotta said.

Welch, using his own calculations, said annual casino revenue would likely amount to just $50 million after 2005. He based his estimate on $1 billion in gross casino revenue, which is what the combined figure was in 2001.

Marotta said his figure was higher because it was assuming casino revenue would grow by 10% a year on average. The open-ended compacts and lifting of game restrictions are expected to boost attendance and revenue, he said.

The Ho-Chunk compact provides an avenue for the possibility of converting its DeJope facility in Madison to a full-fledged casino: a positive vote in a Dane County referendum before Dec. 1. Doyle, however, still would have the option of not agreeing to the Madison casino.

Madison Mayor Dave Cieslewicz and Dane County Executive Kathleen Falk, in a statement, were skeptical about the prospects for a Madison casino. DeJope now operates with electronic machines that resemble slot machines but technically are considered a version of bingo.

Gambling agreements with the Lac du Flambeau and St. Croix Chippewa and the Stockbridge-Munsee (Mohegan) tribes are expected to be signed next week, Marotta said.

As the new deals were announced Friday, Attorney General Peg Lautenschlager went to federal court asking that a lawsuit filed by Republican legislative leaders be heard in U.S. District Court instead of by the state Supreme Court.

The Republicans want the state's highest court to rule that Doyle's deal with the Potawatomi is unconstitutional. They claim it impermissibly expands the scope of gambling and violates the separation-of-powers doctrine.

But Lautenschlager, representing the Doyle administration, contends the suit raises questions of federal law set forth in the Indian Gaming Regulatory Act. Doyle said moving the suit to federal court would speed a decision.

"No matter what the state Supreme Court would have done, it would have ended up in federal court," Doyle said, adding that similar cases across the country have gone to federal court.

But Gard and Welch disagreed, saying the suit raises legitimate questions of Wisconsin law better decided in a state courtroom.

"They're very concerned about what a state court would decide," Gard said, noting that the Doyle administration seems bent on striking deals quickly. "They are clearly racing to the finish line and trying to get ahead of any court decision."

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