The long path to a new casino for the Menominee Tribe of Wisconsin came to an abrupt end last week when Governor Scott Walker refused to approve the 0 million facility that had already been given the green light by the Department of Interior. The tribe has been attempting to build the casino for years at the site of the former Dairyland Greyhound Park, and had reached an agreement with Hard Rock International, owned by Florida’s Seminole Tribe, to brand and operate the facility.
The Forest County Potawatomi have been opposed to the casino, fearful that it would siphon off much of the business at its Milwaukee casino, which it recently expanded to include a large hotel. The Menominee Tribe had pledged to cover any losses suffered by the Potawatomi, who negotiated a compact with Walker that outlined how that would happen, only to see the Indian Affairs division of the Interior Department reject the company.
And just last week, the state of Wisconsin and the Menominee Tribe agreed to a new gambling compact regarding a possible Kenosha casino. The new agreement would have required the Menominees to pay the state 7.5 percent of its winnings from the new casino for 25 years, which could have amounted to $1 billion. In addition, if the rival Ho-Chunk Nation and Forest County Potawatomi’s casino payments fell below $37.5 million in a fiscal year, the Menominee would have covered the difference.
In a letter to Assistant Secretary of Indian Affairs Kevin Washburn, Walker stated the compact was negotiated “in an effort to help define the potential economic and fiscal impact of the proposed Kenosha casino.” He added the compact “in no way indicates whether I support or oppose Menominee’s proposal for a casino in Kenosha, Wisconsin.”
Menominee Chairwoman Laurie Boivin said the proposed payments would have more than covered any losses the Potawatomi and the Ho-Chunk tribes experience at their casinos due to the Menominee’s proposed Kenosha casino.
“Governor Walker now has a clear path to approve the Kenosha project and reap the benefits of $1 billion in revenue share for the state budget,” she said after signing the deal.
At that time Walker said, “Bottom line, we’re still trying to work with all the interested parties to get to a point where the state doesn’t lose out on $100 million or more because of the compacts of Jim Doyle. And that’s still our biggest stumbling block.”
Walker was referring to the compact signed under former Governor Jim Doyle’s administration, which said the state is responsible for reimbursing tribes for revenues lost as a result of the opening of competing casinos. The Potawatomi also contended that the Doyle compact required the state to refund hundreds of millions in back payments if the new casino goes through. The tribe already has withheld $25 million from the state out of concern Wisconsin could end up owing them.
The new Menominee compact came less than a month after the BIA rejected the Forest County Potawatomi compact agreement. Kevin Washburn, assistant secretary of Indian Affairs in the U.S. Department of the Interior, said the new language shifted the cost of any impact on the Potawatomi to the Menominee in an attempt to preserve the Potawatomi’s “monopoly profits.”
On January 22 the Potawatomi filed a lawsuit against the BIA, contending the agency incorrectly interpreted the language. The tribe also said the decision deprived it of its right to freely negotiate compacts with the state and limits Walker ability to set the terms for approving the new casino. “The 2014 Compact Amendment is carefully crafted to create no contractual duty upon Menominee or any entity other than Potawatomi and the state of Wisconsin,” the lawsuit said.
Potawatomi Attorney General Jeff Crawford said, “Good government requires clear rules, and we think the BIA violated those rules. This amendment would have clarified how the provisions of our gaming compact will be enforced. The federal government’s decision only creates more questions and uncertainty for the Kenosha casino project.” The BIA has 60 days to file a response.
Chair of the Menominee Kenosha Gaming Authority Gary Besaw said about the compact, “The concern that taxpayers are on the hook is off the table now. If there are holes in the budget, the state is not on the hook and, in fact, budget holes will be addressed by the Menominee. We believe that any of the issues that were a concern to the governor have all been addressed with the new compact. We believe the governor is in a much better spot to approve this knowing what the Menominee has committed to. This is how we help the governor get to that win-win-win.”
Still, state Department of Administration Secretary Mike Huebsch wrote in a memo to Walker that the compact will not protect the state if the Potawatomi decide to challenge the new casino in court. Huebsch said a judge could find that the state is responsible for reimbursing the Potawatomi for losses associated with the Kenosha casino, and also could rule that approving the Kenosha facility violates provisions in the Potawatomi’s compact that guarantee the tribe the exclusive right to offer gambling within a 50-mile radius of its Milwaukee casino. In that case, he wrote, the Potawatomi would likely stop making payments to the state and Wisconsin might have to refund payments to the tribe.
“If the Potawatomi are successful in their litigation against the state, the state may be required to pay Potawatomi hundreds of millions of dollars that will not be offset by payments to the state by the Menominee,” Huebsch wrote.
Approving the Kenosha casino would also have had ramifications beyond finances for Walker, who is expected to launch a bid for the presidency. Walker has been informed by conservatives in Iowa, which holds the nation’s first caucus, that allowing the casino would harm his campaign, even though Walker spent part of his childhood there.
Tom Coates, executive director of Consumer Credit of Des Moines, sent Walker a petition against gambling expansion signed by 600 Republicans, including Iowa U.S. Senator Joni Ernst and both Republican National Committee members from Iowa, Steve Scheffler and Tamara Scott. Coates wrote, “As you are contemplating a presidential bid, I sincerely hope you will consider a ‘No Expanding Gaming’ policy’.”
Influential Iowa conservative Bob Vander Plaats, president and chief executive officer of the Family Leader, also told Walker, “The increased societal problems of divorce, bankruptcy, debt, depression and suicide, and the additional cost to local governments to handle these problems and the crimes associated with gambling, far outweigh any perceived advantages that may be provided by expanded gambling.”
However, Walker said his casino decision would not be influenced by his potential campaign. “If it was based purely on politics, I could have made that decision a long time ago. I’ve taken the full amount of time and I’ve actually removed the political decision, whether it’s politics here in Wisconsin or politics anywhere else, to make sure the decision here is really based on what’s in the best interests of the hardworking taxpayers of Wisconsin,” said Walker, who recently hired a campaign manager and said the party needs a “fresh face” as its 2016 nominee.
Chuck Laudner, a former executive director of the Iowa Republican Party, noted racetracks and riverboat casinos are well established in that state, but the issue of gambling cannot be ignored. “Six hundred people putting their name on a letter shows you how serious they are about an issue,” Laudner said.
The political ramifications hit home, however, right in Wisconsin when Assembly Minority Leader Peter Barca, a Kenosha Democrat, issued a statement criticizing Walker, claiming the decision would cost the state thousands of jobs and millions of tourists.
“This is an economic mistake of colossal proportions,” Barca said. “The fact that Governor Walker couldn’t bring people together and find a way to get to ‘yes’ is a painful failure of leadership that hurts the hopes of thousands of citizens.”
After the decision, Menominee Chairwoman Boivin expressed disappoint, saying Walker missed the chance to improve the lives of 9,000 tribal members. She blamed the Potawatomi and the possible White House bid for the defeat.
Hard Rock International Chairman Jim Allen called the decision “terribly sad news” for the tribe.
