ST. PAUL, Minn. – Pay up, or face the competition!
That is the gist of what Minnesota Gov. Tim Pawlenty has told Minnesota
gaming tribes. What the governor is asking is more of a demand, according
to tribal leaders. Pawlenty wants the tribes to pay the state $350 million
per year for exclusive gaming rights or he will open the state to gambling.
Pawlenty said the $350 million was equivalent to between 20 – 25 percent of
the after-expenses revenue that is bet annually in Minnesota.
Pawlenty sent the tribal leaders a letter requesting they meet with him to
discuss the revenue-sharing plan. Only two tribes attended the Oct. 27
meeting; the Leech Lake and White Earth Chippewa tribes.
Two tribes rejected the invitation and seven leaders noted that the date
was not convenient and suggested that a meeting before the next session of
the legislature could be worked out.
“We wrote a polite letter back and said the 27th does not work, that
Chairman [Stanley] Crooks would not be available and that we would work to
reschedule the meeting before the next legislative session,” said Willy
Hardacker, attorney for the Shakopee Mdewakanton Dakota Tribe.
He said the governor’s office responded with a letter that said the meeting
was important and that someone should be sent in place of the chairman.
“We responded this morning, [Oct. 27] and said the Shakopee Sioux Community
would not have a representative at the meeting,” Hardacker said.
Hardacker said, on behalf of the Shakopee Business Council, that they were
disappointed the governor continued to politicize the issue of putting a
debilitating tax on tribal organizations.
Pawlenty has used radio and television ads that support Republican
candidates to promote the gaming revenue issue.
“The fact that he is using the ads further indicates he has little desire
to have constructive discussions with tribal leaders,” Hardacker said.
An outspoken critic of the governor’s demand is Helen Blue-Redner,
chairwoman of the Upper Sioux Community. She argues that the governor knows
where the tribes stand on the revenue-sharing issue and adds that the
governor is trying to impose a “de facto tax” on the tribes. She asserts
that what he has proposed is not allowed under the Indian Gaming Regulatory
Act of 1988.
Eleven tribes in Minnesota own 18 casinos. The compacts were signed 15
years ago and have no expiration date. The tribal leaders maintain that
they have exclusivity. Pawlenty disagrees.
In the past few years rumblings about casino competition have echoed
throughout the halls of the legislature with a number of bills finding
their way to committees, some to the floor of the legislative branches, but
never acquiring enough support to end up on the governor’s desk. One such
proposal would create a racino, or a casino in a horse racetrack located
near Mystic Lake Casino, owned by the Shakopee Mdewakanton Community.
Every time the issue arises the tribes collectively stand by the same
argument that they will not change the original compacts.
Pawlenty’s Chief of Staff Dan McElroy met with Harrahs, MGM Grand, Caesars
Palace and Mandalay Bay on a recent trip to Las Vegas. There is much
interest in opening the Minnesota market to gambling, the governor’s office
insists.
McElroy said the governor was very serious about the proposal and that the
tribes must make the choice. He repeated the governor’s message that the
tribes do not have exclusivity for gaming.
The dollar figure may be off, by more than a slight amount, according to
John McCarthy, executive director of the Minnesota Indian Gaming
Association. He claims that if the state wants the $350 million per year it
would calculate to between 50 and 80 percent of the after-expense revenues.
The amount would vary by gaming operation.
Pawlenty argues that the $350 million would equal 25 percent, similar to
what other states, like New York and California receive from Indian gaming.
But the figures Pawlenty uses as gross revenues are not accurate. Actual
revenues are not available on a per-casino basis; only general revenues
from regions are available from the National Indian Gaming Commission, the
federal regulatory organization.
Those figures indicate that overall revenues from gaming across the country
total $16.7 billion. For the region that includes Minnesota, Wisconsin,
North and South Dakota, Nebraska and Iowa the total figure is $3.7 billion.
Pawlenty claims that total wagers for casino gambling in Minnesota amounts
to $10 billion annually. Those figures were calculated by the state lottery
commission.
“That’s laughable,” McCarthy said. “There isn’t that kind of money here.
McCarthy indicated the governor wasn’t serious about negotiating with the
tribes. He said this ploy was window dressing because Pawlenty wants to
bring Las Vegas to Minnesota.
Hardacker agrees with McCarthy. “We are viewing it as not trying to get
money from the tribes. They are creating an opportunity to expand gambling
in Minnesota.”
In order to open the state to gambling it would have to be approved by
referendum vote, and that couldn’t occur until 2006. The lottery commission
may have to run the casinos, and there is a question whether that is even
legal, Hardacker said.
Polls have shown that the people of Minnesota that least want gambling
expansion, including Las Vegas operations, is Pawlenty’s Republican support
base. That could make open gaming an uphill battle.
Opposition comes from the legislature also. Senate Majority Leader Dean
Johnson said it was a “desperate move to fix the budget problem.”
Pawlenty made promises to no-tax groups that he would not impose additional
or increase taxes and now Minnesota is in the midst of a budget crunch.
Johnson said the governor is trying to get the much-needed revenue from the
tribes instead.
“The governor has to realize the tribes are not going to give the kind of
money he wants, or any. His reaction is, we will expand gambling and bring
Las Vegas corporations to run Minnesota casinos.
“We are saying we won’t give you any money,” Hardacker said.
