Native American Press/Ojibwe News

Legislative committee hears testimony on proposed state-owned casino

By Clara NiiSka - October 26, 2001
Should the State of Minnesota get into the casino-operations business? The Minnesota House of Representatives’ Government Operations & Veterans Affairs Policy (Gov Ops) Committee, chaired by Rep. Jim Rhodes (R-44B), held an “informational” hearing about that issue at St. Cloud City Hall on Thursday evening, October 18, 2001.

The proposed legislation:
At issue are six separate gambling-related bills referred to the Gov Ops committee during 2001, including:

HF2528, proposing an amendment to the Minnesota Constitution to allow the legislature to authorize one or more privately-operated casinos, “with the state’s share of net proceeds … dedicated to highway purposes and educational infrastructure.”

HF2441, changing several subdivisions of Minnesota Statutes 297A.259 and 349A to establish video lottery terminals in bars, with proceeds dedicated to state and local “infrastructure.” The bill also provides for local regulation, including the authority for counties and certain cities to prohibit state lottery operations within their own jurisdiction.

HF1689, authorizing the state lottery to lease space for and operate a casino in the main terminal of the Minneapolis-St. Paul International Airport, and providing that “the metropolitan airports commission shall not unreasonable refuse to lease space in the main terminal for this purpose.”

HF1267, authorizing the state lottery to offer games involving sports wagering and sports wagering pools, and authorizing sports bookmaking under licenses issued by the director of the state lottery, and requiring net proceeds to be deposited in the “Minnesota active recreation fund” which the bill would establish.

HF1036, authorizing the state lottery to construct or acquire and operate a casino in the Twin Cities metropolitan area. The bill also amends state law relating to designation of smoking areas to provide for smoking in the new casino, and dedicates 40% of the net proceeds of the casino to the environment and natural resources trust fund already funded by the state lottery, and the remainder to the “21st century economic development fund” established by the bill.

HF654, authorizing the director of the state lottery to establish a state-run gaming facility, establishing a state casino commission, and after the newly-built casino is paid for, providing that the profits be evenly split between the highway user tax distribution fund and a newly-established “account within the general fund to be reserved for one-time facilities construction projects.”

The testimony:
Witnesses Thursday night gave testimony ranging from strong support of a state-run casino, to vigorous opposition to gambling generally, expansion of gambling, or competition with Indian owned casinos. In his introductory comments, Gov Ops Committee chair Jim Rhodes (R-44B) encouraged witnesses to “speak on all sides of this issue,” and explained that the hearings were, “just the start of a process,” intended to “get feelings on both sides” and from throughout the community.

The first witness to testify was Indian gambling lobbyist John McCarthy, Executive Director of the Minnesota Indian Gaming Association (MIAC). MIAC is a lobbying group that, according to McCarthy’s testimony, “represents nine of the eleven federally recognized Tribes within the State of Minnesota.” (Red Lake and White Earth are not members of MIAC.) McCarthy stressed the “tremendous benefits” of Indian gambling operations on reservation economies, including approximately 10,400 jobs held by non-Indian casino employees at “a fair and decent wage” (averaging slightly less than $9 per hour, according to the statistics given by McCarthy). “With this success story, why would the state want to go into competition,” he asked.

Perhaps not unsurprisingly, the Indian gambling lobbyist did not touch certain issues persistently brought to the attention of Press/ON by former casino employees, including unfair labor practices and casino workers’ rights unenforceable in the face of Indian gambling enterprises’ attorneys vigorous defense of “tribal sovereignty.”

McCarthy spoke at some length about the “strong position against expanded gambling” which, he said, MIAC has taken since 1989. MIAC’s alleged non-expansion stance was questioned sharply by Rep. Tony Kielkucki, who pointed out that he had “seen massive expansion of gambling within the casinos themselves … almost every casino operation has expanded the size of its facility—to say ‘we have not expanded gambling’ is not the truth.” McCarthy countered that the accuracy of his testimony, “comes down to the terminology we are using,” specifically that the state-tribal gambling compacts geographically restrict Indian casino operations to reservations, and limit the types of ‘games’ (e.g., blackjack and video slot machines). McCarthy also pointed out that there has been only a 125% increase in the number of video slots during the past three years, and that he would describe this increase as “business growth” rather than “expansion of gambling.”

MIGA has officially opposed off-reservation gambling enterprises in Minnesota since 1994, and at the hearings the lobbying organization was distributing literature as well as photocopies of a recent MIGA resolution “formally” opposing non-Indian casino operations.

Testimony in support of the present Indian gambling enterprise monopoly was also presented by the Grand Casino Association of Mille Lacs, including a speech in precise school-book Ojibwe by Mille Lacs Indian Princess Jada Grapp Staples, a statement by Mille Lacs Commissioner of Administration Sheldon Boyd, and testimony by an elder stressing the economic growth spurred by the Mille Lacs Band’s casinos. Before the casinos, she said, “people died without a doctor, families were broken up because there was no work on the reservation … now we have jobs on the reservation due to the casinos.” At Mille Lacs, “our lives have been greatly enriched by gambling … please do not allow a state-owned casino,” she told the Gov Ops Committee members.

The Prairie Island Community also presented emotional testimony in support of the status quo, including that of casino employee Mark Mobraten, who said that a state-operated casino in the Twin Cities would hurt business at Treasure Island. “What would happen to my job,” he asked the Gov Op Committee.

Red Lake tribal council chairman Bobby Whitefeather, accompanied by the tribal council’s Twin Cities urban liaison Roberta Van Wert, was second on the agenda to present testimony to the Gov Ops Committee. Whitefeather began his testimony in Chippewa, switching to English after a couple of minutes. He said that the Red Lake casinos have had only “marginal success due to limited market area,” and that there are presently 359 “of our members” and 200 “non-Indians” employed by the Red Lake gambling establishments. He added that there were 1,800 individuals “in my tribe” who were unemployed, that 20% of all native people in Minneapolis were unemployed, and that a quarter of all “the homeless” are native.

In his testimony, Whitefeather emphasized the “challenges that we face” at Red Lake, including the “drastic” affects of the September 11th tragedy. He told the Gov Ops Committee members that he represented 9,631 members, “with an additional 2000 citizens who are not members of the tribe to whom we are obligated to provide services also.” (2000 U.S. Census figures put the total population of Red Lake reservation at 5,162, including non-Indians.) According to Whitefeather, approximately 4,600 “members” live off-reservation, 80% in Minneapolis-St. Paul (Press/ON publisher Bill Lawrence estimates that seventy percent of all Red Lake enrollees live off-reservation, and that over 90% of Indians living in Minnesota do not presently benefit from Indian gambling operations in Minnesota).

Whitefeather testified to Red Lake tribal council’s expenditure of casino revenues for social services and “essential governmental functions,” specifically including subsidy of the Jourdain-Perpich nursing home—which tribal council treasurer Dan King and four tribal council representatives claim is “showing a profit” in their recent “Negative Rumors” flyer.

Whitefeather explained that it was “our position that the tribe-state casino initiative in partnership with the state of Minnesota will do several things, one of them is maybe to create an equitable opportunity for all … native people in the state of Minnesota, and also to address some issues that are existing in the metro area of Minneapolis-St. Paul.” He concluded, “all we ask is the opportunity to allow us to develop an economy, that’s all there is to it.”

Rep. Sondra Erickson (R-17A) asked Whitefeather why Red Lake was not a member of MIGA. Whitefeather explained that after four or five years, the “tribal council determined that Red lake interests were not served by MIGA.” She then asked “how much debt are you incurring” from recent expansions. Whitefeather responded that the debt from hotel construction and a “small” expansion of the casino totaled, “I believe about $33 million dollars”; he did not discuss the debt load from the indoor water park construction at the River Road casino.

White Earth secretary-treasurer Erma Vizenor, accompanied by tribal archivist and enrollment specialist Andrew Favorite, also testified that “our tribal council supports a partnership with the state to allow us an opportunity to expand our economic base.” There are about 24,000 members enrolled at White Earth reservation, Favorite testified, of whom 15 or 16 thousand live in the “greater metropolitan area” and 5-6 thousand live on or near White Earth reservation.

In an article on the legislative hearings, Star Tribune writer Pat Doyle quoted Dist. 6 Sen. Doug Johnson saying that he had gotten “unofficial approval” of the joint state-tribal idea from both Red Lake and White Earth leaders, “whose members represent almost 60 percent of Indians” in Minnesota.

Mary Jeone, testifying as a private citizen, spoke in favor of a state-controlled casino. “The tribal casinos must have competition,” told the Gov Ops Committee—with competition, the “abuses would end” at the tribal casinos. She said, “you hear about the economic boon … [but] seldom hear about the problems” and “additional casino-related costs” associated with the casinos, including state-funded law enforcement. She also stressed the “loss of employees’ rights” and “civil rights abuses associated with tribal casinos,” including loss of “freedom of speech” and constitutional guarantees of equal protection, and “blatant nepotism.” She explained that her support of a state-controlled casino was because, “expansion of gambling has been taken out of the citizens of Minnesota’s hands,” and that competition under state control was better than continuation of the tribal casinos’ monopoly. But, she asked the committee members, “If gambling isn’t good for the government of Minnesota, why is it good for tribal government?”

Testimony in opposition to state involvement in casino gambling—and in some instances to gambling in general—was presented by a number of other witnesses, including Bishop Olson of the Southwestern Lutheran Synod, and David Strom of the Taxpayers League of Minnesota. Strom emphatically urged the Gov Ops Committee, “to reject this terrible idea” of a state-run casino, which, he continued, would be “simply incompatible with good government practices.”

Philip Kelly, administrator of Project Turnabout, a private nonprofit organization in Granite Falls that provides residential treatment for compulsive gamblers, testified about the social, human and economic costs of compulsive gambling as being a part of the “downside of gambling.” Kelly said that more casinos would lead to more compulsive gambling, and pointed out that thirty days residential treatment for compulsive gamblers cost about $4,200—with a success rate of only about sixty percent of those entering treatment.

After the hearings ended, MIAC lobbyist McCarthy told Press/ON that, in his understanding, the proposals for a state-operated casino would not “go anywhere.” Gov Ops Committee chair Jim Rhodes expressed much the same sentiment—that it was unlikely that the Legislature would enact any bill authorizing a state-run casino during the next legislative session.

Rep. Sondra Erickson, whose district includes Mille Lacs, agreed to be interviewed by Press/ON. “Until the bills have been debated we will never know the pros and cons,” she told this writer. “On Thursday,” at the hearings in St. Cloud before the Gov Ops Committee, there was “a lot of opinion presented,” she continued—but we need to look art the facts.

Erickson also said that she wanted to ensure that the Legislature’s consideration of the gambling bills went beyond the lobbyists who, all too often, provide much of the ‘citizens’ input on upcoming legislation. “I want the debate to be between the members of the committee and the people who are directly involved, on the reservation or trust land,” she said. “I feel that I would want to be able to ask questions of the Corporate Commission or casino managers … it is important that we debate it, and that we hear testimony from the casino managers, from the folks that live on the reservation and work at the casinos, and from those who live off of the reservation and feel that they do not benefit – and from those who do benefit – from Indian gaming.”

“Another concern,” Erickson continued, “is that the audits be made public. I hope that the courts will rule in favor” of releasing the casino audits. “I think that it is important that the tribal members find out what the revenue is, and how it is spend, disbursed, invested.” She added that the casino audits were also important to the Legislature’s consideration of the several gambling bills currently pending.

Press/ON asked Erickson about legislators doubting that the gambling bills would be heard by the Senate. She said that whether or not any of the bills made it into the Senate would be determined in large part by whether or not Senate Majority Leader Roger Moe “helps the people” from the two reservations in his district. “He says that he will stand up for the people he represents,” but what he does will depend on “how much pressure Roger Moe feels.” She explained the difficult position in which Moe might find himself, particularly since he had been named “honorary chief of the Red Lake tribe.”

Erickson reflected on the contentious issue of state-run casinos. “If gambling is not OK for the state, why is it OK for tribal government,” she mused.

Press/ON also asked Rep. Erickson about her controversial appointment to the Minnesota Indian Affairs Council (MIAC). She said that she had received an invitation to the next meeting, and, “I plan to attend … so that I can understand the issues from their perspective. I also have some issues [affecting my constituents (Erickson’s district includes Mille Lacs) that the MIAC] should consider.