All of a sudden, Wisconsin is getting some action with casinos

As we rightfully cast our eyes toward what kind of chicanery Republicans might do before Tony Evers takes office as Governor in January, this bit of news came as a surprise to me this week.

Gov. Scott Walker and the Forest County Potawatomi have signed off on an agreement that puts Wisconsin on the hook for up to $250 million if the tribe were to suffer losses from a competitor’s casino being built.

Indian gaming deals being signed 6 weeks before Walker leaves office? This seems worthy of a deeper look.

Here’s a quick recap of how Indian gaming interacts with Wisconsin’s budgeting (the Legislative Fiscal Bureau’s Informational Paper on Indian gaming will give you a lot more). Wisconsin basically gets a cut of the various tribal casinos’ “win total” – profit from the games they have. A certain amount of that money is designated for duties such as oversight of the state’s casinos, tribal-related state programs such as health care, workforce development, transportation, and higher education aid for tribal members, and certain UW programming in and around tribal lands.

The rest of it goes into the state’s General Fund (about $27.7 million in Fiscal Year 2018), and what Walker signed dealt with how much money would have to be paid back to other tribes in case a rival new casino opened in an existing casino’s “territory”.

You may remember that Walker rejected a proposed Menominee casino near Kenosha in 2015, which was a pathetic pander to Iowa fundies as Scotty was gearing up for his disaster of a presidential campaign. That veto was done despite an OK from the Obama Administration and the Bureau of Indian Affairs, and despite Menominee tribal members walking 155 miles to Madison in the winter of 2015 to ask Walker to approve the project.

Maybe the new Governor will be more likely to listen.

When he vetoed the Menominee casino, Walker hid behind the provision requiring compensation to the Potawatomi if the Kenosha project was built. The issue dates back to when Jim Doyle approved of compact changes in 2003, which cleared the way for more gaming at Potawatomi's casino in Milwaukee, and how it allowed for a radius of protection from similar gaming competition.

The state originally agreed to liability for losses at tribal casinos because it guaranteed, through tribal gaming compacts, geographic exclusivity for casinos in exchange for payments from tribes, also known as revenue sharing. The state uses some of that money for regulation of the casino industry....

Though that plan was approved by the federal government in 2013, Walker rejected it in 2015, blaming Doyle for the 2005 compact that made the state liable for losses at the Potawatomi’s Milwaukee casino.

So this is where the agreement that Walker and the Potawatomi signed yesterday comes in, as it gives a fixed dollar amount for repayment to the tribe if projects like the Kenosha casino happen.

Doyle had originally approved a 50-mile zone of exclusivity for the Potawatomi’s Milwaukee casino in 2003, but it was rejected by the Bureau of Indian Affairs. In response, the state had then agreed to help make up for losses if a casino were ever approved between 30 and 50 miles away from the location.

But under that arrangement, the state and tribe would need to enter into arbitration where a panel would decide the state’s liability.

Department of Administration Secretary Ellen Nowak said in a statement the new agreement provides more stability for the state and tribe because the state would be locked into $250 million in liability for losses without an arbitration tribunal having to weigh in.

The flip side of this is that if I’m reading this right, Walker’s new agreement means that the state would HAVE to pay up to $250 million if a Kenosha casino were to be built, as it would fall into the 30-50 mile zone. It sure seems to be a good way to tie the hands of Gov Evers if a Kenosha casino was going to be shoved through in the coming weeks or months.

Interestingly, a Beloit casino is outside of that 50-mile range from Milwaukee, and the plans for a Ho-Chunk casino and resort in that town advanced earlier this month on a couple of fronts. The Bureau of Indian Affairs signed off on a draft Environmental Impact Statement for the Beloit Ho-Chunk casino on November 9, there will be a public hearing on the project in 2 weeks, and the end of the 45-day comment period will come on Christmas Eve.

On the governmental side, Gov-elect Evers has said he would sign onto an agreement with the Ho-Chunk for the Beloit casino and resort, and theoretically, that one could be breaking ground in just over a year.

Ho-Chunk South?

By the way, current state compacts do not allow for sports gambling to be part of any Indian casinos in Wisconsin, so any new projects would be limited to table games, slots, video poker, bingo, and so forth. The compacts would have to be reopened for sports betting or other forms of gaming to be allowed at tribal casinos, and I have seen nothing indicating that's coming down the pike. (Illinois may be a different story, although a lot of details still need to be worked out in Springfield).

It sure does look like there may be some new casino action in Wisconsin in the near future, especially in the southern end of the state, and with it will be the jobs and related issues that’ll have to be dealt with. Keep an eye on it going forward.