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December 13, 2002
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Audit:
Tribal gaming revenue, profits up since 1997
By JR Ross, Associated
Press Writer
MADISON,
Wis. (AP) — Wisconsin’s 11 American Indian tribes made $428.3 million
in
profits last year from almost $970.9 million in net revenues at the
casinos
they operate around the state, an audit showed Wednesday.
The report
prompted several lawmakers to call for the state to demand more money
from the
tribes in exchange for extending the compacts that allow them to run
the
casinos. The compacts begin to expire in August 2003.
Gov.-elect
Jim Doyle wants to negotiate a bigger chunk of that money for the state
in
exchange for longer compacts, spokesman Thad Nation said. Doyle
believes the
$24 million the tribes paid last year was too low, Nation said.
“He believes
that payment should be increased,” Nation said. “Longer compacts are
good for
the tribes and good for Wisconsin because they’ll help spur more
investment in
Wisconsin by the tribe, more economic development.”
Tribal
profits were up $158.2 million from 1997 at the 24 casinos, an increase
of 58.6
percent, according to the Legislative Audit Bureau.
Profits are
the net revenue minus expenditures. Those expenditures include such
things as
systems to monitor electronic casino games and payments to private
agencies
that do background checks of companies selling goods and services to
the gaming
industry.
The Audit
Bureau report found that net revenues — the amount wagered minus the
amount
paid in winnings — were up 47.1 percent from 1997. But not all tribes
experienced
increases in net revenue.
The state is
prohibited from releasing the gaming revenue for each tribe.
Tom
Krajewski, a spokesman for the Forest County Potawatomi Community that
runs two
Wisconsin casinos, cautioned the state should not view the tribes’
profits as
an open pot of money to draw from as it tries to close a budget deficit
expected to be $2.6 billion for the two-year period that begins July 1.
Krajewski
said the tribe uses that money to finance a series of government
expenses like
water and sewer systems, nursing homes and economic development.
“Frankly,
this $428 million does some of the things that are necessary but not
everything
that is necessary,” he said.
Nation said
Doyle was open to longer compacts and expanding the kinds of games
tribes are
allowed to offer in exchange for the larger payments.
The audit
noted that Wisconsin receives 2.5 percent of gaming revenues, while
Michigan
receives 3.4 percent and New Mexico 3.1 percent. Iowa and Minnesota
receive
less than 1 percent. Connecticut receives 24.8 percent.
Krajewski
said the amount of money the state could get through the larger
payments would
be small compared to how much it could receive through negotiating
longer
compacts, allowing an expansion of the games the tribes can offer and
raising
betting limits, among other things.
He said the
tribes would likely invest more in their casinos and surrounding
amenities like
hotels if they had longer compacts, for example. He said that would
result in
increased income and sales taxes for the state.
Currently,
the compacts run five years, requiring the tribes to pay off any
projects they
undertake within that timeframe, Krajewski said. Extending them to 20
years or
30 years would allow for more long-term financing that he said would
likely
result in more development.
“What a shot
in the arm that would be,” he said.
The audit
also raised concerns about a “fairly limited number of financial audits
of
casinos.” It found not all casinos have been reviewed routinely and
on-site
compliance audits have never been conducted at any of the Ho-Chunk
nation
casinos.
The Ho-Chunk
nation accounts for 27.1 percent of the electronic gaming devices and
21.3
percent of the blackjack tables operated in Wisconsin.
“Gaming
staff indicate they were denied access to the records to complete their
reviews
in July 1998 and June 1999,” the audit said.
Ho-Chunk
spokesman Mark Butterfield said he was not familiar with the allegation
and
declined to comment.
———
On the Net:
Legislative
Audit Bureau: http://www.legis.state.wi.us/lab/
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