A few reports on Indian Casino Gambling in Minnesota

Federal Indian Gaming Regulatory Act
Tribal-State Compacts
Minnesota State Legislature - Bill Tracking


December 18, 1993
Tribal Casinos Wasted Millions, Auditors Say  
They overspent on management, machines.

August 21, 2001
State calls casino audits nonpublic;
Regulators fear that making the reports public would cause tribes to stop sending them to the state, threatening the integrity of gambling.


September 19, 2001
Casinos' finances likely to be made public;
The state attorney general's office says it's illegal to withhold the audit results.

September 21, 2001
4 Indian bands sue to keep audits private;
Casino operators say releasing finances would aid competitors

December 1, 2001
Tribes resist making casino audits public;
Prairie Island Dakota and Mille Lacs Chippewa say they contain trade secrets; the state says they're too old for that.

December 6, 2001
State regulators favor casinos, Hatch says

January 29, 2002
Indians emphasize sovereignty in data dispute

April 17, 2002

Judge: Casino audits are not public;
Indians had sought ruling, citing need to hide trade secrets

April 21, 2002
Tribes giving to GOP;
Casino wealth lets Indians broaden political donations

June 10, 2002

Reservation poverty falls by one-third;
Casinos have helped Minnesota tribes, but the picture still can't be called rosy, census figures show.

April 1, 2003
Prairie Island Indian Cmty. v. Minn. Dep't of Pub. Safety

January 27, 2004
Mille Lacs Band OKs release of older audits;
The organization had argued that casino data contained trade secrets.

November 15, 2003

Federal intervention wanted in tribal disputes;
Indians denied membership expected to sue government

March 7, 2004

Tribes betting on goodwill ads

March 28, 2004
GAMBLING IN MINNESOTA: A NEW DEAL?
Proposals are on the table;
Many state officials want tribes to share gambling revenue or face competition. The casino-owning tribes say no way.

April 20, 2004
Caesars ups its ante in bid for mall casino;
By a gambling giant's forecast, state tax coffers could get up to $253 million a year.

July 8, 2004
Report: State's Indian casinos had third-highest take in U.S.

September 23, 2004
St. Paul, Minn.-area tribe last reported $47 million in casino profits in 1997

September 25, 2004

Pawlenty ups the ante;
Report outlines state's argument for a share of tribal gambling revenue.

September 28, 2004
Gambling;
Time to try for a better deal

October 9, 2004

State, casinos at odds over gambling profits

October 22, 2004

Pawlenty wants tribes to pay $350 million;
Plan guarantees casino exclusivity in exchange for annual payment.

October 23, 2004
Casino plan is called begging;
Senate DFL leader: Pawlenty's request of $350 million from tribes is desperate.

October 26, 2004
Minnesota Governor Stars in Radio Tribal Casino Pleas




December 18, 1993
In the Saturday, December 18th [1993] Minneapolis Star Tribune, the headline on page one read,
Tribal Casinos Wasted Millions, Auditors Say  
They overspent on management, machines.





August 21, 2001

State calls casino audits nonpublic;
Regulators fear that making the reports public would cause tribes to stop sending them to the state, threatening the integrity of gambling
.


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

    After American Indian gambling interests balked at releasing casino audits, a Minnesota agency ordered the reports temporarily classified as nonpublic, which could lead to the Legislature debating the issue and perhaps sealing them permanently.

    The state's Department of Administration issued the order Sunday after being told that tribes probably would stop sending audits to the Public Safety Department if it released them to the public.

    Gambling compacts between the state and tribes require tribes to send audit figures to Public Safety upon request to comply with its supervision of gambling. Although tribal governments are exempt from Minnesota's public-records law, audits collected by state agencies are open to the public.

    The Administration Department issued an advisory opinion June 6 saying Red Lake Chippewa casino audits collected by Public Safety are public.

    Minnesota tribes and Public Safety objected, saying the compacts made the audits nonpublic "to the extent possible under state law." But Administration said that language didn't override the Minnesota Data Practices Act, the law governing public records, which says all data collected by a state agency is public.

    Public Safety Commissioner Charlie Weaver on June 27 asked the Administration Department to classify the casino audits temporarily as nonpublic to give the Legislature a chance to change the law and permanently seal the records.

    The state attorney general has power to approve or disapprove the temporary classification. If he approves it, and it's not rejected by courts, the Legislature has until the end of its 2003 session to act.

     Weaver sought the temporary nonpublic status on grounds that "release of the data to the public would have a detrimental effect on each tribe's willingness to provide audit information under the . . . compacts. As a result, Public Safety's ability to ensure the integrity of [casino] gaming in Minnesota would be threatened."

    Bill Lawrence, a Red Lake tribal member, frequent critic of tribal government and publisher of Native American Press/Ojibwe News, asked to see the Red Lake audits. He disputed the contention that releasing them to the public would jeopardize oversight by Public Safety.

    "They said [releasing the audits] would make it more difficult to monitor the casinos," Lawrence said Monday. "I'm amazed by that, because I don't think there's much monitoring going on."

    Lawrence and the Star Tribune also have asked separately for casino audits of Minnesota's 10 other tribes.

    Don Gemberling, director of the Administration Department's information policy analysis division, said Monday that some tribes apparently sent audits to Public Safety with the caveat that they not be made public.

    "We believe this material to be open," said Star Tribune editor Tim J. McGuire. "We will be looking at all possible appeals."

    The Public Safety Department doesn't collect annual audits from every tribe. Frank Ball, head of the gambling and alcohol enforcement division of Public Safety, said the most recent audit collected from Red Lake is for 1996-97, which doesn't reflect a major expansion of that tribe's casino. Ball said collecting audits hasn't been a high priority.

Pat Doyle is at pdoyle@startribune.com.



September 19, 2001

Casinos' finances likely to be made public;
The state attorney general's office says it's illegal to withhold the audit results.


by Robert Franklin; Staff Writer, Minneapolis Star Tribune

    Nearly two dozen audit reports from Minnesota Indian casinos will be made public within 10 days unless disclosure is stopped by a court order, a state official said Tuesday.

     The reports include information on revenue, prize payouts and margins, marketing, mix of games, capital improvements, salaries, contracts, loans, assets and bad checks.

     Indian leaders object to public disclosure of the audit reports, which they supplied privately to the state, saying the reports contain proprietary and competitive information.

     Officials from two state departments also tried to make the reports nonpublic, saying their release would make the monitoring of Indian gambling unworkable because tribes would withhold future audit reports from the state.

     The attorney general's office disagreed in a ruling released Monday. Tribes must supply the information by law or the casinos could be shut down, said Alan Gilbert, chief deputy attorney general and state solicitor general.

     He said the audit reports are public under the state Data Practices Act and nothing overrides that statute in the state-tribal compacts that authorize casino gambling.

     Kevin Smith, spokesman for the state Public Safety Department, said 23 audits in the department's possession will be made public no later than Sept. 28, after removal of security information, such as numbers of cameras focused on games and numbers of safety personnel.

     The release could be halted by a court challenge to the attorney general's ruling, and such a challenge seems likely from some or all of the 11 tribal bands that operate casinos in the state. "There's not too many other avenues," said John McCarthy, executive director of the Minnesota Indian Gaming Association.

     He said confidentiality was clearly the intent when state-tribal compacts were negotiated more than a decade ago.

     However, the attorney general's decision was called courageous Tuesday by Bill Lawrence, a Red Lake tribal member and publisher of Native American Press/Ojibwe News.

     "It's time we get a little view of what's going on in this $3-billion-a-year monopoly we have," said Lawrence, who had asked the state for the reports.

     The Star Tribune also asked for the reports.

     Indian governments that own the casinos are not subject to state data-practices or open-meeting laws, but must provide audit reports to the state upon request. The state collects reports sporadically.

     Whether the reports are public, once in the hands of the Public Safety Department, has been in dispute for months.

     David Fisher, state commissioner of administration, ruled that they are public. Charlie Weaver, commissioner of public safety, then asked Fisher to take a new look. Disclosure "would have a detrimental effect on each tribe's willingness to provide audit information," Weaver said.

     Fisher then agreed, and classified the reports as nonpublic until the 2002 or '03 Legislature could consider the issue.

     But, in a letter to Fisher dated Friday, that classification was rejected by Attorney General Mike Hatch's office, which must review the legality of such an order. If tribes were to withhold information from the state, "you apparently believed that the [Public Safety] department had no legal recourse to obtain such information," Gilbert wrote on the attorney general's behalf.

     That is not accurate, Gilbert said: "Indian gaming in Minnesota is completely dependent upon having in place tribal-state compacts and in complying with their terms." The state could go to court to enforce the compacts and conceivably could shut down gambling, he said Tuesday.

     The Data Practices Act makes most information public unless it is restricted by statute. Gilbert's letter said the act is governing, despite a provision of state-tribal blackjack compacts that says audits shall be nonpublic "to the extent possible under state law."

     _ Robert Franklin is at rfranklin@startribune.com.

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September 21, 2001

4 Indian bands sue to keep audits private;
Casino operators say releasing finances would aid competitors


by Robert Franklin; Staff Writer, Minneapolis Star Tribune

   Four Minnesota Indian bands filed lawsuits Thursday in an effort to keep the state from publicly disclosing audit reports of their casino gambling operations.

     Making the audits public would be unconstitutional and would give an unfair advantage to gambling competitors in nearby states, cost the bands money they need for tribal activities and result in job losses, the suits said.

     The audit reports were to be released late next week under a decision of the state attorney general's office. However, the state agreed Thursday to a temporary restraining order that will withhold the reports for two weeks while courts consider the cases.

     The suits were filed against the state by the operators of the Mystic Lake, Treasure Island, Jackpot Junction and Grand Portage casinos. At least one other band, operators of the Grand Casinos at Mille Lacs and Hinckley, is expected to file suit today.

     Under state-tribal compacts, Minnesota's 11 Chippewa and Sioux Indian bands are required, upon request, to provide the state with casino audit reports that show information on revenue, prize payouts and margins, marketing, salaries, contracts, loans, assets, bad checks and other financial data. Those records are "extremely sensitive" proprietary information that includes trade secrets, the bands said.

     State collection of the data has been sporadic, however. The Department of Public Safety said Thursday that a revised count shows it has 65 annual audit reports going back to 1991. Only four are more recent than 1997, spokesman Kevin Smith said.

     Disclosure of the reports had been requested separately by Bill Lawrence, a Red Lake tribal member and publisher of Native American Press/Ojibwe News, and the Star Tribune. Lawrence has said that "it's time we get a little view of what's going on in this $3 billion-a-year monopoly we have."

     Alan Gilbert, chief deputy attorney general and the state's solicitor general, ruled last week that the audits are public under Minnesota's Data Practices Act. In doing so, he overruled positions taken by the state Public Safety and Administration departments.

     Gilbert's position was challenged Thursday in a suit filed in Ramsey County District Court by the Prairie Island Indian Community and in a joint suit filed in U.S. District Court in St. Paul by the Shakopee Mdewakanton Sioux, Grand Portage Chippewa and Lower Sioux communities.

The specifics

     Among the Indians' arguments:

     - Releasing the records would violate federally protected tribal sovereignty rights, state-tribal compacts that govern Indian gambling and a trade secrets exemption in the state Data Practices Act.

     - That the Data Practices Act is unconstitutional because the bands didn't have an opportunity to be heard on whether their own records should be made public.

     - The records are nonpublic under federal law, and that should have determined their status under the Data Practices Act.

     - Tribal and state officials have considered the records to be nonpublic, and the bands relied on those assurances from state regulators.

     Tadd Johnson, solicitor general of the Mille Lacs band, said it will file a suit today in Ramsey County District Court. The state is "trying to change something unilaterally that we agreed on when we signed the compacts," he said.

     The compacts say the audit reports shall be nonpublic "to the extent possible under state law." However, Gilbert said that does not supersede the Data Practices Act, which makes most government information public.

     His decision rejected efforts by the two other state departments to classify the records temporarily as nonpublic until their status can be considered by the Legislature in 2002 an 2003.

     The departments had said disclosing the records would make the bands less willing to provide audit information to the state. But Gilbert said that if the bands withheld the audits, they would violate the state-tribal compacts, which the state has the power to enforce.

     He also noted that, under two court decisions, Oregon and Washington open-records laws are not preempted by federal Indian gambling confidentiality rules.

     State officials said that they are assessing the suits filed Thursday in Minnesota and will comment later.

    _ Staff writer Curt Brown contribute to this report.
    _ Robert Franklin is at rfranklin@startribune.com.



December 1, 2001

Tribes resist making casino audits public;
Prairie Island Dakota and Mille Lacs Chippewa say they contain trade secrets; the state says they're too old for that.


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

   Indian tribes that own some of Minnesota's biggest casinos fought attempts Friday to require the state to release gambling audits to the public, amid a rare dispute between top state officials over what should be done.

     The Prairie Island Dakota and Mille Lacs Chippewa told a Ramsey County judge that the audits should not be released because they include trade secrets that could help competitors, including backers of a state-run casino. That claim is disputed by officials who say the audits are too old to have valuable trade secrets.

     But the audits would provide a more detailed account of the billion-dollar casino industry for the public.

    The Department of Public Safety, which collected casino audits to help regulate gambling, has long sided with the tribes in refusing to disclose the documents. But the Minnesota attorney general's office disagreed in September, saying the state Data Practices Act classifies the audits as public. The tribes then sued the Public Safety Department to prevent it from releasing the audits.

    On Friday, the department sent District Judge Louise Bjorkman a letter objecting to the attorney general's position of representing the department.

    "A conflict of interest exists in the department being represented by the Minnesota office of attorney general," wrote Laurie Beyer-Kropuenske, an attorney for the Public Safety Department. Bjorkman mentioned the letter in court but took no action.

    "We represent the state," Attorney General Mike Hatch countered in an interview Friday. "We are responsible for enforcing the laws of the state."

    Hatch said that longstanding policy prevents someone who is thinking of suing the state from "selecting the most friendly defendant" _ in this case, Public Safety _ and then working out a quick deal that is contrary to state law or not in the state's best interest.

    The state signed compacts with tribes in 1989 and 1991. The tribes agreed to send audits to Public Safety upon request; the department doesn't always ask for them. Prairie Island has sent audits to Public Safety with cover letters that noted its understanding that the audits were confidential, said its attorney, Julie Fishel.

    Over the years, "the state never objects, never questions that they will treat this information as nonpublic," Fishel said.

     Ruled public

     But in June, David Fisher, state commissioner of administration, ruled in a Red Lake Chippewa case that casino audits were public. Public Safety Commissioner Charlie Weaver objected to their release, saying that could cause tribes not to cooperate in the future with Public Safety. He asked Fisher to temporarily classify all casino audits nonpublic, giving the Legislature time to consider the issue. Fisher agreed.

     But in September the attorney general's office reversed that temporary classification. Alan Gilbert, chief deputy attorney general and state solicitor general, said the audit reports are public under the Data Practices Act and nothing overrides that statute in the state-tribal compacts.

     Since then, Fishel said, state legislators have inquired about obtaining the audits. "The state is looking at a state-run casino that would be a direct competitor of these tribes."

     But Assistant Attorney General John Garry told the judge Friday that the audits held by Public Safety from Prairie Island and Mille Lacs are from 1991-97. He said the tribes haven't shown that audits so old contain trade secrets that would help competitors open a state-run casino.

    "It's not enough to say it is [a trade secret]," Garry said. "You have to say how."

    He said some financial information about Grand Casino Mille Lacs and Grand Casino Hinckley was released by the U.S. Securities and Exchange Commission.

    Disclosure of the reports had been requested separately by Bill Lawrence, a Red Lake tribal member and publisher of Native American Press/Ojibwe News, and by the Star Tribune. Bjorkman on Friday allowed Lawrence to intervene in the case.

     _ Pat Doyle is at pdoyle@startribune.com.



December 6, 2001

State regulators favor casinos, Hatch says


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

   Citing e-mails in which state gambling regulators appeared eager to please tribal casinos, the Minnesota attorney general's office Wednesday criticized regulators working with American Indian tribes fighting to keep casino audits from the public.

     Chief Deputy Attorney General Alan Gilbert wrote a judge that the e-mails demonstrate that the Department of Public Safety, which regulates gambling, isn't representing state interests in a fight over whether to release the audits.

     After the Public Safety Department sided with the tribes in seeking to temporarily classify the audits as nonpublic, an official sent an e-mail to the head of its gambling enforcement division.

     In her e-mail, Laurie Beyer-Kropuenske told gambling enforcement director Frank Ball, "The tribes are really happy by how [the Department of Public Safety] has handled this issue. They think your division is fabulous!"

     And an official from a state agency that helps determine what government data are public warned his bosses about the political ramifications of an opinion that agency issued in June saying the casino audits are public.

     "Just wanted to be sure that you were aware that the larger issues associated with the opinion we issued . . . are becoming increasingly political," Don Gemberling wrote in a July 20 e-mail to Administration Commissioner David Fisher and Deputy Commissioner Kirsten Cecil.

     Gemberling said he was approached by a lobbyist for the Minnesota Indian Gaming Association who "wondered if there was some way to deal with the same issues about which we issued the opinion, but to produce a different result."

     On Aug. 19, Fisher granted a request by Public Safety Commissioner Charlie Weaver to classify the audits as temporarily nonpublic so the Legislature has a chance in 2002 or 2003 to change the law to make that nonpublic status permanent.

     Cecil said Wednesday that the decision to classify the audits as temporarily nonpublic was made on its merits. Public Safety had argued that releasing the audits would discourage tribes from cooperating with regulators.

     The e-mails were included in a letter Wednesday from Gilbert to Ramsey County District Judge Louise Bjorkman. She is hearing lawsuits by two tribes that want to prevent the state from releasing the casino audits to the public.

     Beyer-Kropuenske, Ball and Fisher did not return phone messages Wednesday seeking their reaction to the letter and the e-mails. Gemberling is out of state through Friday and couldn't be reached, his staff said. He did not return phone messages.

     Disclosure of the audits has been requested separately by Bill Lawrence, a Red Lake tribal member and publisher of the Native American Press/Ojibwe News, and by the Star Tribune. Some state legislators also have asked to see them.

     The Department of Public Safety, whose gambling enforcement division has collected casino audits as part of its oversight authority, is named along with the state as a defendant in the lawsuits.

     But Public Safety has sided with the tribes in keeping the audits from the public, while Attorney General Mike Hatch has ruled that the public can see them. Even though Hatch and Weaver are at odds, the attorney general's office is representing Public Safety in the lawsuits because it typically defends state departments against claims.

     Last week, Beyer-Kropuenske said Hatch had a conflict representing Public Safety because of their different views on releasing the audits. Gilbert countered that the attached e-mails show that Public Safety appeared "to be working with the plaintiffs."

      Tribal governments say the audits shouldn't be released to the public because they include trade secrets that would be valuable to competitors, including backers of a proposed casino sponsored or run by the state. The Prairie Island Dakota, owners of Treasure Island Casino, and the Mille Lacs Chippewa, owners of Grand Casino Mille Lacs and Grand Casino Hinckley, filed the suits.

     The attorney general's office said the audits collected from the two Indian bands are too old to be of value to competitors.

     Public Safety has worked closely with tribes to prevent release of the audits. In another e-mail, Beyer-Kropuenske thanked a law firm representing tribal interests for helping the department apply for temporary nonpublic status for the audits. "Your firm provided Public Safety with exactly the information and arguments we needed!" she wrote.

     In one e-mail to Fisher and Cecil, Gemberling described some of the pressure the department was under.

     "Two days ago I was visited by . . . one of the lobbyists for the Indian Gaming Association. [He] wanted us to know that this is a political 'big deal' for the tribes."

     Even though tribal officials wanted the audits classified as nonpublic, they "are reluctant to have the issues come before the Legislature," Gemberling wrote Fisher and Cecil on July 20.

     The e-mail also noted a radio news report about state Sen. Dick Day, R-Owatonna, a proponent of a state-sponsored casino, calling for release of the audits.

    _ Pat Doyle is at pdoyle@startribune.com.



January 29, 2002

Indians emphasize sovereignty in data dispute


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

     In their fight to stop the state from releasing casino audits to the public, Minnesota Indian tribes argued Monday that their governments exist outside the jurisdiction of the state's public disclosure law.

     The Mille Lacs band of Ojibwe and the Prairie Island Dakota cited a state law that says governments "located outside Minnesota" can prevent public release of audits they send the state. The tribes said they are outside Minnesota in a political sense, so the state can't release the audits without their permission. They have sued the state to prevent release.

     The bands own Grand Casino Mille Lacs near Garrison, Grand Casino Hinckley and Treasure Island Casino in Red Wing, three of the biggest gambling operations in Minnesota. They were required to send audits upon request to the Minnesota Department of Public Safety under state-tribal gambling compacts that give the agency authority to help regulate gambling and prevent casino crime.

     The bands say releasing the audits would divulge legally protected secrets to competitors at a time when there is talk of a state or privately run casino in the Twin Cities, perhaps to finance a sports stadium.

Ramsey County District Judge Louise Bjorkman    questioned Prairie Island attorney Julie Fishel Monday on whether the tribes qualified under Minnesota law to be treated like Wisconsin or other states when it came to disclosing audits collected by Minnesota.

    "When I think about it, at first blush, none of the reservations is outside Minnesota," Bjorkman said.

     "They're jurisdictional sovereigns," Fishel replied.

     Assistant Attorney General John Garry argued, "The plaintiffs are obviously not located outside Minnesota. If they were, they would not have entered into these compacts to begin with."

     The battle over the audits began last year when Bill Lawrence, a Red Lake tribal member and publisher of the Native American Press/Ojibwe News, asked for them. The Department of Administration in June issued an advisory opinion that the audits were public because they were collected by a state agency. The tribes then sued the Public Safety Department to prevent their release.

     Lawsuits are pending in federal court as well as in Ramsey County over the audits. The Star Tribune has filed a friend-of-the-court brief in Ramsey County supporting their release. Bjorkman is considering a ruling in that case.

     While Prairie Island and Mille Lacs say the audits contain trade secrets considered nonpublic under state law, Garry countered that the information is too old to be valuable to potential competitors. And he said some of the Mille Lacs data had been released to the U.S. Securities and Exchange Commission when its casinos were managed by a publicly traded firm.

    _ Pat Doyle is at pdoyle@startribune.com.



April 17, 2002

Judge: Casino audits are not public;
Indians had sought ruling, citing need to hide trade secrets


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

     A Ramsey County judge ruled Tuesday that the gambling audits of two Indian groups that own some of Minnesota's biggest casinos should not be made public.

     District Judge Louise Bjorkman ruled that the audits contain trade secrets that are not public under the Minnesota Data Practices Act. Bjorkman ordered the Minnesota Department of Public Safety, which collected the audits as part of its efforts to regulate gambling, not to release them.

     The Mille Lacs Band of Ojibwe and the Prairie Island Dakota Tribe sued the Department of Public Safety to prevent release of their casino audits after another state agency issued an opinion regarding another tribe that its casino audits were public.

     The Mille Lacs band owns Grand Casino Mille Lacs near Garrison and Grand Casino Hinckley, and the Prairie Island tribe owns Treasure Island Casino in Red Wing.

     There was no immediate reaction Tuesday from the state on whether it will appeal. "We're reviewing the decision," said Leslie Sandberg, spokeswoman for Minnesota Attorney General Mike Hatch, whose office represented the Department of Public Safety.

     The Mille Lacs band and the Prairie Island Dakota argued that releasing the audits would divulge legally protected secrets to potential competitors.

     In the Ramsey County case, Bjorkman granted summary judgment to the Indian groups, saying, "The number of requests for the data and nature of the requesting parties support the [Indians'] argument about the data's independent economic value."

     The battle over the audits began last year, when Bill Lawrence, a Red Lake band member and publisher of the Native American Press/Ojibwe News, asked for them. Lawrence argued that band members were being denied access to casino financial data.

     In June, the Department of Administration issued an advisory opinion that the Red Lake audits were public because they were collected by a state agency. The tribes then sued the Department of Public Safety to prevent their release. The Star Tribune filed a friend-of-the-court brief in Ramsey County supporting their release.

     In addition to arguing that the audits contained trade secrets, the Prairie Island and Mille Lacs groups said that they are sovereign governments exempt from state public-disclosure laws.

    _ Pat Doyle is at pdoyle@startribune.com.



April 21, 2002

Tribes giving to GOP;
Casino wealth lets Indians broaden political donations


by Greg Gordon; Staff Writer

   Washington, D.C. -- Until recently, it seemed that Democrats could count on lopsided financial support from all 11 of Minnesota's American Indian tribes.

   Of the tribes' $367,501 in donations to federal campaigns from 1993 through 2000, Republicans got less than $16,000.

   But unease in the Prairie Island Dakota Tribe about huge casks of nuclear waste literally sitting in its back yard has changed that. The Mdewakanton Dakota Community, which donated last year to Democratic U.S. Sen. Paul Wellstone, now is also a substantial contributor to his Republican opponent, who favors a plan to open a national disposal site for the waste.

   Last month, three tribal officers wrote a $25,000 check for a Minneapolis fundraiser for GOP senatorial hopeful Norm Coleman, then stood smiling for a picture with President Bush.

   The Prairie Island tribe's recent donations of $37,000 to Republicans show how Indians enriched by profitable casinos are beginning to flex political clout on both sides of the aisle, particularly on local issues.

   "Before, we never had the opportunity to spend this kind of money," said Audrey Kohnen, president of the Prairie Island Dakota. And, she said, the tribe has learned that "we have to be a part of the process to get our voice heard."

   She declined to discuss the tribe's profits from its Treasure Island Casino and two resorts in Red Wing. But she said that, while the tribe's campaign donations of more than $86,000 since Jan. 1, 2001, might seem "astronomical" compared to earlier sums, they probably seem like "pennies" to the tribe's 609 members.

   The southeastern Minnesota tribe wants the government to convert a remote Nevada mountain to a nuclear waste storage facility. Then, Kohnen says, the tribe's "nuclear neighbor" 600 yards from the reservation _ Xcel Energy's   power plant _ can ship the deadly radioactive waste to Nevada.

   Bush has authorized the Energy Department to seek a license for a waste disposal site at Nevada's Yucca Mountain, but Congress must override a veto by Nevada Gov. Kenny Guinn for the licensing process to go forward. Wellstone and other Senate Democrats, including Majority Leader Tom Daschle, D-S.D., are resisting, saying safety questions remain.

   Wellstone contends that shipping the waste across the country from 130 nuclear facilities would create safety and security risks that could put tens of millions of Americans in jeopardy.

   "These concerns must be addressed, but they haven't been," said Jim Farrell, his campaign spokesman.

   Kohnen said the tribe has tried on several occasions to sway Wellstone, arguing that nuclear waste has been transported safely for decades.

   "It's just a question of how many times can you beat a dead horse," she said. "He's been a senator for 12 years. Why does he bring [transportation] up now, when he could have worked to find a solution? . . . And he's never made an offer to come down and sit down and visit with us."

   She said Coleman was "very straightforward" in his support of the Yucca project.

   Farrell said that Wellstone raised the transportation issue long ago and that, while the parties disagree, he "is very accessible."

   "He went to Prairie Island last summer to meet with tribal leaders about this issue" and met with the tribe's vice president, Mason Pacini, last Tuesday, Farrell said. "We never decline an invitation to meet with the tribes.".

   The Prairie Island tribe gave $20,000 to the Democratic Senatorial Campaign Committee in February 2001 and the maximum $2,000 to Wellstone's campaign last June, according to an analysis of federal campaign reports by Dwight L. Morris and Associates.

   Kohnen said that she is a Republican, but that the five-member Tribal Council votes on all donations. In mid-December, the votes started going the other way. The tribe sent the National Republican Congressional Committee a $10,000 check, followed by the $25,000 check to the March 4 Coleman fundraiser _ a figure high enough for Kohnen and two other tribal officials to be photographed with Bush.

   The check went to a joint fundraising committee set up by the Coleman campaign and GOP committees. Coleman got the first $2,000, the state Republican Party the next $5,000 and the National Republican Senatorial Committee the remaining $18,000.    While donations to party committees cannot be earmarked for a specific candidate, the state GOP and national committees have already begun airing ads on Coleman's behalf.

   Data compiled by the Washington-based Center for Responsive Politics suggests Republicans also are making inroads with other tribes with casinos as they become an increasingly rich mine for political fundraisers.

   In the 1995-1996 election cycle, tribes across the country with gambling operations gave 86 percent of their $1.9 million in campaign contributions to Democrats. But last year, Republicans got 36 percent of the $634,625 donated.

   Frank LaMere, head of the Democratic National Committee's Native American Caucus, acknowledged that tribes have begun to donate to "several political parties.

   "I think that tribes in recent years have been able to buy into the political process because of the success of their economic ventures," he said, "and they are choosing to invest in candidates who will probably support them on their local issues."

   But LaMere, a member of the Winnebago Tribe of Nebraska, said Democrats "have always been there for us" and "the jury is still out" on Republicans.

     _ Greg Gordon is at ggordon@mcclatchydc.com.



June 10, 2002

Reservation poverty falls by one-third;
Casinos have helped Minnesota tribes, but the picture still can't be called rosy, census figures show.


by Pat Doyle; Terry Collins; Staff Writers, Minneapolis Star Tribune

     Unemployment and poverty rates on Minnesota Indian reservations dropped by a third during the 1990s, according to the latest figures from the Census Bureau.

     Some signs of prosperity fueled by casino expansion have been visible: big homes with three or more vehicles on an exclusive reservation in the Twin Cities area. And places that once saw population declines saw their numbers grow again.

     But despite gains, serious problems persist on reservations in outstate Minnesota. Poverty and jobless rates remain in the double digits. A large share of reservation residents are neither working nor looking for work, so they are not counted among the unemployed. Many casino jobs are taken by non-Indians even though tribes practice Indian preference in hiring.

     Still, tribal officials cite the latest census figures as proof that casinos have done more to improve living standards on reservations than decades of other economic development.

     "We have made significant progress, but of course we have a lot more work to do," said Bobby Whitefeather, chairman of the Red Lake band of Chippewa.

      On the reservations of Minnesota's seven Chippewa and four Sioux bands, the total unemployment rate dropped from 17 percent in 1990 to 11 percent in 2000.

Statewide, unemployment declined from 5 percent to 4 percent.

     The percentage of reservation families living in poverty declined from 28 percent in 1989 to 19 percent in 1999. Statewide, the poverty rate dropped from 7 percent to 5 percent.

     On the Shakopee Mdewakanton, Prairie Island Dakota and Lower Sioux reservations, median household incomes in 1999 exceeded the $47,100 statewide median income. In 1989, only the Shakopee Mdewakanton reservation had a higher median household income than the state.

     The Shakopee Mdewakanton and Prairie Island Dakota reservations are home to Mystic Lake Casino and Treasure Island Casino, respectively. They benefit greatly from their proximity to the Twin Cities. The Shakopee, Prairie Island and Lower Sioux, owners of Jackpot Junction Casino in Morton, also share profits with several hundred tribal members.

     The larger tribes in northern Minnesota don't fare as well. Their casinos are generally smaller than those near the Twin Cities, and they share little or none of the profits directly with members.

     On the Fond du Lac reservation near Cloquet, the Black Bear Casino along Interstate Hwy. 35 has contributed greatly to a drop in unemployment from 17 percent to 9 percent.

     "The unemployment rate of 8, 9 percent, we're proud of that," said Gary Harms, tribal planning director. "Because that's the lowest it's ever been."

     There are still jobs available for unemployed tribal members who want them. About 50 percent of the casino positions are held by non-Indians, despite a preference for filling the positions with Indians, Harms said.

     "There are some jobs that band members are not attracted to," he said. "Whether it's minimum wage or positions that deal with internal management in the casino, there are those who are not attracted to that type of work."

     Try telling that to James Couture, 29, a Fond du Lac member who has worked at the casino since it opened in 1991. In that time, he has seen the casino grow from being inside a tin shed on a gravel pit to an expansive "palace" with a hotel and a planned golf course, all 20 minutes southwest of Duluth.

     Couture also has risen through the organization over the years; he's gone from being a blackjack dealer to a floor supervisor to table-games manager who oversees 80 people.

     "I sit back sometimes and think about how far we've come," he said. "I've seen a lot of my friends come and go, and come and go again. I plan to be here and help this place grow."

    Tribal member Chris Reynolds, 27, has worked at the casino for nine years. He shares Couture's vision of community and points to how casino funds have not only provided jobs, but also helped the community at large.

     "It's more than just bringing money into the area," said Reynolds, a blackjack dealer. "This has brought people of all types together. Now we have to find more ways to keep people employed, able to buy homes for their families and allow their kids to get a good education."

     Mary Durfee, 45, a manager at a check-cashing station inside the casino, said she admires how band members such as Couture and Reynolds are taking pride in their reservation.

     "I remember when we had only 100 employees working on the reservation," said Durfee, who was a tribal accountant for 16 years.   Now it's among the largest employers in Carlton County, she said. "Today, I feel very proud of where we're at. I have a lot more confidence in our future."

     Red Lake, about 300 miles northwest of the Twin Cities, illustrates some of the progress tribes have experienced, as well as the challenges they continue to face in reducing unemployment and poverty.

     The median household income on the Red Lake Reservation, which is virtually closed to nonmembers, was $22,800 in 1999. While far behind the state figure, it was 43 percent higher than the median income on the reservation in 1989, when adjusted for inflation.

     During the past decade the Red Lake labor force _ those working or looking for work _ increased by 52 percent. Whitefeather said the rise reflects members moving back to the reservation in hopes of finding work. That was a big reason that the number of people 16 and older increased from 2,236 in 1990 to 2,977 in 2000.

     But the jobs at the tribe's three small casinos barely kept pace with the population gains. Red Lake's unemployment rate stayed roughly the same, at about 24 percent.

     "We've created more employment, although we have not created enough employment," Whitefeather said.

     Part of the problem facing Red Lake is that it has a large membership and a more remote location than more prosperous tribes. Nevertheless, it reduced its family poverty rate from 48 percent in 1989 to 39 percent in 99.

      Many Red Lake residents remain outside the labor force. The census showed that 41 percent of residents 16 and older weren't working or looking for work. Statewide, the figure is 29 percent.

     Similarly, on all Minnesota reservations, 40 percent of residents 16 and older are outside the labor force. The large population that remains outside the labor force complicates calculating unemployment on reservations.

     The census doesn't distinguish between Indians and non-Indians living on or near reservations, but the U.S. Bureau of Indian Affairs (BIA) surveys only the employment status of Indians living on reservations. And the BIA's unemployment estimates include Indians who are "available for work" but are not working or looking for work. The BIA's 1999 survey, conducted by tribes, generally reported higher figures than the census: 13 percent unemployment at Fond du Lac and 59 percent at Red Lake.

     "It's so hard to track," said Harms, of the Fond du Lac reservation. "You've got people moving in, people moving out, people who you can't get ahold of."

     The BIA survey also includes a category for people who are "employed but below poverty guidelines" _ the working poor. The results vary widely from reservation to reservation. Fond du Lac reported no working poor in 1999. Leech Lake, which has 5,272 working-age people, reported that 70 percent of those employed on its reservation were poor.

     But if census figures understate joblessness on some reservations, they also appear to understate wealth on others.

     Shakopee Mdewakanton members, whose leaders have kept the extent of their wealth an official secret, reported that their median household income in 1999 was $55,000. But that figure is at odds with the accounts of some tribal members who said in interviews that the tribe in recent years has distributed profit-sharing checks that topped $900,000 per member annually.

     The census also showed that 30 homes on the Shakopee reservation were valued between $300,000 and $1 million. Fifty-eight percent of the reservation households had three or more vehicles, about three times the percentage statewide, the census reported.

    _ Pat Doyle is at pdoyle@startribune.com.
   _ Terry Collins is at tcollins@startribune.com.



April 1, 2003

Prairie Island Indian Cmty. v. Minn. Dep't of Pub. Safety

C9-02-1012, C0-02-1013, C7-02-1025, C2-02-1028
COURT OF APPEALS OF MINNESOTA , 658 N.W.2d 876
2003 Minnesota Court of Appeals, April 1, 2003, Filed,
Review denied by, Request denied by Prairie Island Indian Cmty. v. Minn. Dep't of Pub. Safety, 2003 Minn. (Minn., June 25, 2003)

FindLaw Archives



January 27, 2004

Mille Lacs Band OKs release of older audits;
The organization had argued that casino data contained trade secrets.


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

     The Mille Lacs Band of Chippewa has agreed to release old audits of its casino operations but continues to resist disclosing more recent financial statements.

     The Mille Lacs Band sued in 2001 to prevent the Minnesota Department of Public Safety from releasing casino audits from the early and mid-1990s. The agency collected the audits as part of its regulatory role over gambling, and newspapers requested the information. The band argued that the information contained trade secrets that could aid its competitors.

     A Ramsey County district judge found the audits to be trade secrets, but the state Court of Appeals last year reversed that ruling and sent the case back to the lower court for reconsideration.

     Mille Lacs decided this month to withdraw from the lawsuit and drop its claim that audits from 1991 through 1995 remain trade secrets.

     "The band made the decision to terminate this lawsuit in light of the growing age of the information, the cost of continuing to fight and the fact that some more recent financial data from the casinos has been reported," said Wally Hilke, an attorney representing the band.

     But Mille Lacs ''contends that its post-1995 casino audits are trade secrets . . . and it does not consent to the disclosure of any such audits that the state of Minnesota may come to possess," according to a court document.

     It was unclear Monday whether the Public Safety Department has Mille Lacs audits from more recent years. The agency has said it doesn't collect annual audits from every tribe and has argued that releasing data to the public could keep tribes from providing it. While gambling compacts required tribes to make certain casino audits available to the state upon request, the tribes say they understood the data wouldn't be released to the public.

     The most recent audit released Monday, for the 12 months ending Oct. 1, 1995, showed revenues of $178 million from Grand Casino Hinckley and Grand Casino Mille Lacs.

     Tribal members and other sources have reported more recent information. In 1998, when the casinos were managed by a publicly traded firm, its government filings showed revenues of $196 million in 1997.

     The Mille Lacs Band and the Prairie Island Dakota, owners of Treasure Island Casino in Red Wing, sued the Public Safety Department after Bill Lawrence, a Red Lake tribal member and publisher of Native American Press/Ojibwe News, and the Star Tribune separately asked the agency to release the audits. Prairie Island remains a plaintiff.

Pat Doyle is at pdoyle@startribune.com.



November 15, 2003

Federal intervention wanted in tribal disputes;
Indians denied membership expected to sue government


by Pat Doyle; Staff Writer, Minneapolis Star Tribune

     Some American Indians have renewed calls for the federal government to intervene in tribal membership disputes involving the wealthiest Minnesota tribes and their distribution of casino profits.

    Indians who claim that they were wrongly denied benefits associated with the Shakopee Mdewakanton Dakota, Prairie Island Dakota and the Lower Sioux are expected to sue the U.S. government Monday to demand that it intervene.

    They say the Interior Department hasn't fulfilled its responsibility as a guardian to Indian tribes and people.

     Erick Kaardahl, an attorney representing the challengers, said Friday that the rosters of the three Dakota communities could swell from 1,000 to 5,000 if membership rules were changed.

     He said the suit will be filed Monday in the U.S. Court of Federal Claims in Washington, D.C.

    Officials of the Shakopee Mdewakanton, Prairie Island Dakota and Lower Sioux were unavailable for comment Friday. Over the years they have defended their decisions as in the best interest of their communities.

    The Shakopee Mdewakanton own Mystic Lake Casino in Prior Lake, the Prairie Island Dakota own Treasure Island Casino in Red Wing and the Lower Sioux own Jackpot Junction near Morton.

    Membership means money: A few hundred Shakopee Mdewakanton members each received nearly $1 million annually in the late 1990s. As once-destitute tribes became prosperous, more people applied for membership.

    Previous attempts to overturn membership rules have failed. The government and courts have given tribes considerable discretion to define themselves, and tribes can invoke sovereign immunity from suits.

    Meanwhile, another group of Indians released a statement Friday accusing the Interior Department of allowing casino profits to be illegally controlled by a few tribal leaders. The allegations were contained in an amended petition filed in September in a lawsuit over 1990 membership disputes.

    The Shakopee Mdewakanton adopted a looser standard that they say is based on descendants. . A federal appeals court in 1996 said the tribe had authority to do so.

    To some Indians, the decisions can seem arbitrary.

Pat Doyle is at pdoyle@startribune.com.



March 7, 2004

Tribes betting on goodwill ads


by Mark Brunswick; Staff Writer, Minneapolis Star Tribune

     The images are wholesome and comforting: Members of the Miesville volunteer fire department stand waving next to a sparkling new tanker truck. Kids bathed in sunlight walk by a tepee exhibit during a tour of the Goodhue County Historical Society. A smiling woman sits on an examination table at a new health clinic, with medical staff attending.

     It's all part of a $200,000 television ad campaign sponsored by the Prairie Island Indian Community, operators of Treasure Island Resort and Casino near Red Wing.

     It's no coincidence that the spots are airing now, during one of the hottest debates in years over expanding gambling in Minnesota. That prospect threatens the Indian monopoly on casino gambling in a $1 billion-a-year marketplace.

     More than ever, the tribes that run casinos are under scrutiny about their contributions to the larger community.

     Particularly pointed questions have been raised about two of the most profitable casinos in the state: Mystic Lake, run by the Shakopee Mdewakanton Sioux Community near Prior Lake, and Treasure Island near Red Wing.

     The object of the campaign, said tribal leaders and their advertising agency, is to counter public perceptions that Indian tribes that operate casinos don't do enough good with their profits.

     The ad campaign features three 30-second spots that have been running in the 14-county metro-area media market for three months, ending this month.

     "It's not surprising that more people don't know the good things that the tribes do because no one has told them," said Jake Reint, a spokesman for Prairie Island and a representative of Weber Shandwick Worldwide, the advertising agency that produced the ads.

     One 30-second spot shows images of the Miesville firefighters, the Goodhue County Historical Society, and hockey players at the Red Wing High School ice arena, with dollar figures on the screen to show donations the tribe has made to the organizations. Another ad features images of new roads and the health clinic at Prairie Island, and touts gambling's role in making the tribe more self-sufficient. A third warns of the dangers of addictive gambling and offers a telephone number to find help.

     The narrator drives home the point: "Working together. Making a difference in Minnesota's economy."

     One of the ads points to more than $11 million in charitable donations over the past 10 years from Prairie Island, including $1.5 million to the ice arena and $50,000 for Toys for Tots. Another speaks of $81 million a year in state and federal income taxes generated by casino workers statewide and an additional $180 million a year generated by vendors to the casinos.

     The figures, which come from a study financed by the tribes, are often used by the trade association that represents nine of the 11 gambling tribes in Minnesota to make their case that the tribes make significant contributions. With more than 13,000 employees, tribal casinos rank as the 11th-largest employers in the state, slightly behind Wells Fargo Bank of Minnesota. The Minnesota Indian Gaming Association, the state trade group, said that since tribal gaming operations began in Minnesota, tribal governments and casinos have contributed more than $62 million in donations, gifts and sponsorships to benefit local, state and national organizations and other government jurisdictions.

     But one frequent critic of Mystic Lake and Treasure Island sees the TV ads as an effort to blur the inequities in Indian gambling that have arisen between the tribes with lucrative Twin Cities-area casinos and those with less profitable gambling operations in other parts of the state.

     "To me, the ads are not very persuasive, and people know they are just an effort made by two small, wealthy tribes to maintain the status quo," said Bill Lawrence, a Red Lake tribal member and publisher of Native American Press/

Ojibwe News. "About 600 Indian people or less are getting 75 to 80 percent of the benefits of gambling, and they want to maintain that."

     Elsewhere in the country, tribes have launched extensive and expensive media campaigns to counter the image of tribes rolling in money. The efforts often are coordinated during debates about expanding gambling beyond the tribes or when the tribes themselves want to expand.

     In neighboring Wisconsin, the Ho-Chunk nation was expected to spend $1.3 million supporting an expansion of its gaming operations, including $140,000 for a 23-day TV advertising blitz.

     First Americans for a Better California, a coalition of two Southern California tribes, paid more than $1.5 million for recall-related TV advertising when candidate Arnold Schwarzenegger proposed that tribes pay more of what he deemed their fair share of gambling profits to the state.

     In New York state, the Seneca Nation of Indians mounted a statewide advertising campaign against a proposed state policy to end tribes' tax-free sales of cigarettes and gasoline to non-Indians. The ads featured patriotic music and images of schoolchildren, a teacher and a Vietnam veteran.

     David Schwartz, coordinator of the University of Las Vegas-Nevada's Gaming Studies Research Center, said non-tribal commercial casinos have succeeded because most people can find out how much money is coming in and where it is going.

     "Indian gaming is a little bit of a harder path for public acceptance because it is not so transparent," Schwartz said.

     The lack of transparency to the general public may be a result of the sovereign nature of Indian nations. Lawrence, of the Native American Press/

Ojibwe News, and the Star Tribune have sought the casino records of two Minnesota tribes, arguing that the records should be public to help check on potential corruption and because the businesses are state-approved monopolies. That legal battle continues.

     As profits have risen, many tribes have become especially reluctant to open their books.

     "We consider these trade secrets, business secrets," said Gordon Adams, a tribal representative for the Bois Forte Band of Chippewa from northern Minnesota, who said tribal members are given an accounting of casino revenues. "We don't need to show our cards to people; why should we? Why should Target open up their books; why should Sears?"

     During the legislative debate, Rep. Sondra Erickson, R-Princeton, a supporter of state-sanctioned competition for the tribal casinos, has been one of the most aggressive in questioning the closed nature of tribal gambling businesses and suggests that it is a reason for skepticism about not only how much money is coming in but how it is spent. Her district includes Grand Casino Mille Lacs. Erickson, who has seen the ads, said she is concerned that the tribes take care of their own needs first and thinks they should be more forthcoming about their revenues.

     "I wish they could, or would, sit down with us and say, 'Here's what we spend on education. Here's what we're doing in health. Here's what we've done in infrastructure,' like we do in state government or city government or in township government," she said. "I think they could make great strides among all of us if they could be open. Then maybe they wouldn't need that kind of advertising campaign."

     Mark Brunswick is at mbrunswick@startribune.com.



March 28, 2004

GAMBLING IN MINNESOTA: A NEW DEAL?
Proposals are on the table;
Many state officials want tribes to share gambling revenue or face competition. The casino-owning tribes say no way.


by Mark Brunswick; Staff Writer, Minneapolis Star Tribune

     You won't hear a constant bling-bling-bling, and there will be no flashing lights. Beverages won't be complimentary. You can't win the car on display, and Engelbert Humperdinck won't be appearing nightly in the lounge on the weekends.

     But the hottest place to lay down a bet in the next couple of weeks may be in the hallowed halls of the Minnesota State Capitol, where some of the most significant changes in gambling in years may be forthcoming.

     It's crunch time at the Capitol, and gambling is on the table. This is the biggest challenge to the Indian casino-gambling monopoly in Minnesota in the 15 years since compacts between the tribes and the state were signed. It includes the lure of a portion of the state's $1 billion-plus annual gambling market as a way to ease state budget woes.

     Shuffled in the deck is the unknown of how much money the tribes, all sovereign nations with closed books, are making in the industry. There are also centuries-old racial tensions about what Indians may still be owed and what injustices need still to be remedied.

     High stakes players include Gov. Tim Pawlenty, who has been meeting with the state's casino-owning Indian tribes to broker a deal for a possible contribution from them to the state in exchange for a continued monopoly. Also at the table is the Senate, which is holding its cards close to the vest about which, if any, gambling proposal it will support. Sen. Jim Vickerman, DFL-Tracy, chairman of the Senate's new Veterans and Gaming Committee, said the omnibus gambling bill he will present deals only with charitable gambling, leaving a host of other gambling proposals up in the air - and many of them as possible bargaining chips for a larger budget deal.

     "I'm not so sure how much more gambling we need," Vickerman, a longtime supporter of the current situation, said last week.

     The tribes themselves are divided. The poorest and most populous among them, two northern tribes at White Earth and Red Lake, want the state to help set up a metro-area casino that will give them entree into the lucrative metro gambling market. It is a proposal the other tribes are opposing, fearful of their market share being threatened.

     Added into the mix is the possibility of an expansion of gambling to include non-Indians. The Canterbury Park horse racing track in Shakopee wants the right to install slot machines for a "racino." Backers of a proposed harness-racing track that would be put in Anoka County are waiting to see how that plan works and whether they, too, can get in the game.

     Gambling industry behemoth Caesars Entertainment Inc. is bankrolling market studies behind a proposal to have a state-run casino at the Mall of America or a similar high-profile metro location.

     With the suicide earlier this year of the longtime executive director of the Minnesota State Lottery under a cloud of a critical legislative audit, uncertainty about the administration of the lottery also is a factor that might contribute to the success or failure of some of the proposals.

     Building trades unions, which stand to gain jobs in construction of new casinos, are also becoming a factor in the debate.

     Handicapping the prospects of any of the proposals is a day-to-day proposition. The Daily Racing Form can only be so much help in determining which proposals are long shots and which might be mudders.

     The following, though, is a roundup of the proposals and their chances as the legislative session hits the final stretch:

     Racino

     The Canterbury racino proposal might have the most legs of any gambling measure. It already passed the House last year, and House leaders have earmarked $30 million from revenues from the racino as a partial answer to reduce a $160 million projected deficit for 2004-05.

     Canterbury has one of the most aggressive stables of lobbyists at the Capitol, and one former Canterbury lobbyist, Cristine Almeida, is now the chief of staff for the DFL Senate majority. Senate Minority Leader Dick Day, R-Owatonna, is the longtime author of the racino idea, providing an unusual undercurrent of potential bipartisanship.

     For those interested in the easiest route to expanding gambling beyond the Indian monopoly, Canterbury also is the favorite because the track already exists.

     Northern tribes

     The bill, sponsored in the House by Rep. Bill Haas, R-Champlin, and in the Senate by Sen. Sandy Pappas, DFL-St.Paul, would allow the Red Lake and White Earth tribes of northern Minnesota to operate a metro-area casino and lease slot machines from the state lottery. In return, the state would get 20 percent of the gross revenues, an estimated $89 million a year. Each tribe would get about $65 million a year.

     Haas admits that he faces a challenge in an upcoming hearing in the House Ways and Means Committee. But he said he thinks that the measure could pass if it gets to the Republican-controlled House floor. House Speaker Steve Sviggum, R-Kenyon, supports the bill, but the Canterbury racino remains the main focus of the caucus.

     If there is some effort to bring the northern tribes into the mix of the gambling market, many think the Haas proposal might represent a vehicle for compromise, particularly if the other gambling tribes agree to participate.

     Mall of America

     The elephant in the room is Caesars Entertainment and the Mall of America proposal. Caesars recently contracted with a high-profile lobbying firm and has the money and wherewithal if it so desires to launch a last-minute media campaign to support its effort.

     Under a plan proposed by Rep. Lynda Boudreau, R-Faribault, a new gambling corporation would be established that would sell a license for a huge gambling emporium near the Mall of America. The facility would have 5,000 slots and 150 gaming tables, generating $250 million a year for the state, much of it going to fund higher education scholarships.

     Even though it potentially represents the largest revenue generator for the state, Boudreau jokingly describes her bill as "resting" and acknowledges that her caucus' focus on the racino makes prospects for her bill dim - at least for this year. Further clouding its prospects is that it has no Senate sponsor (Sen. Bill Belanger, R-Bloomington, has vowed to fight it vigorously), and other Bloomington legislators have introduced bills designed to block it.

     But in a legislative world where anything is possible until the last gavel is hammered, the Mall of America proposal could find itself attached to other legislation in the form of an amendment.

     "I never said I would do that," Boudreau said last week. "But I never said I wouldn't do that, either."

     Stadiums

     Rep. Tom Hackbarth, R-Cedar, proposed one privately owned casino in the metro area to help finance three new stadiums. The proposal would allow Minnesotans to vote on a constitutional change to permit private non-Indian casinos in the state. His plan would sell a gambling license for $450 million, and the money would be used to guarantee the issuance and retirement of revenue bonds. No state money would directly finance the stadiums.

     Hackbarth's proposal, like Boudreau's, would use the state lottery to administer its operations, raising questions about its short-term viability. A bill to finance stadiums also has to wait while it is determined who will get a stadium and when.

     Harness track

     A pared-down bill that would help out a proposed harness-racing track in Anoka County remains in the paddock. The bill, sponsored by Rep. Jim Abeler, R-Anoka, was stripped of a request for a constitutional amendment for casinos at horse tracks and for a proposed "racino" to make it more palatable. But after some financial amendments about its costs were attached, Abeler said he parked the bill instead of subjecting it to possible defeat. Given heavyweight opposition from the gaming tribes and Canterbury, Abeler said he was actually happy to just get the bill out of one committee.

     "Harness racing is a nice, family thing. County fairs, that sort of stuff. Three hundred jobs," Abeler said. "But when you go up against the big guys, it's tough to have a chance."

     Mark Brunswick is at mbrunswick@startribune.com.

GLOSSARY OF GAMBLING-RELATED TERMS

     Compacts: Agreements between states and Indian tribes under which the tribes operate casinos on reservations or other lands held in trust for the tribes by the federal government. Authorized in federal law, compacts differ greatly from state to state, with some states, unlike Minnesota, sharing in significant casino profits.
[Tribal-State compacts are indexed online at: http://www.dps.state.mn.us/alcgamb/gamindia.html]

     Expiration date: The date on which a state-tribal compact expires and must be renegotiated. Some states' compacts have time limits and others do not. Minnesota's do not.

     Revenue: It's meaning can be confusing, especially when applied to gambling operations. Revenue can refer to the total amount wagered, or the smaller amount left over after winners are paid. "Profit" would be the even smaller remainder after winners are paid and operating expenses are covered.

     Video slots: Video gambling machines that typically mimic the operation of mechanical or "reel" slot machines. Some video gaming machines also pay poker, blackjack or other games.

The issue

     - Backed by Republicans in the Legislature, Gov. Tim Pawlenty says Minnesota's Indian tribes must share more of their casino profits with state government or the state will authorize new casinos to compete with them.

     - Minnesota's tribal casinos pay only about $150,000 annually to the state. In neighboring Wisconsin, casino-owning tribes are paying the state some $118 million this year.

     - Minnesota tribes point out that their casinos have created thousands of jobs, added economic vitality to their communities and brought the first glimpse of well-being to long-impoverished Indian reservations. All of that is endangered, they say, by state efforts to change the rules of the game.

Minnesota's Indian casinos

Minnesota's 11 Indian Reservations operate 18 casinos, all governed by compacts negotiated with the state in 1989-91 that can only be renegotiated if both parties agree. The most profitable operations are the four nearest the Twin Cities.

Grand Casino, Hinckley
Grand Casino, Mille Lacs
Little Six Casino and Mystic Lake Casino Hotel, Prior Lake
Treasure Island Resort Casino, Red Wing
Palace Bingo & Casino, Cass Lake
Fond-du-Luth Casino, Duluth
Black Bear Casino Hotel, Carlton
Grand Portage Lodge & Casino, Grand Portage
Prairie's Edge Casino Resort, Granite Falls
Shooting Star Casino Hotel, Mahnomen
Jackpot Junction Casino Hotel, Morton
Seven Clans Red Lake Casino and Bingo
Seven Clans Thief River Falls Casino
Fortune Bay Casino, Tower
Northern Lights Casino, Walker
Seven Clans Warroad Casino
White Oak Casino, Deer River

Sources: Minnesota Gaming Directory, Minnesota Indian Casino Directory, ESRI

.

Minnesota's gambling 'deals'


                                         Net annual receipts       Direct revenue to state

Charitable gaming (2003)    $254 million                 $56 million

State Lottery (2003)            $148 million                $79 million

Canterbury Park (2002)       $35 million                  $0.25 million

Indian casinos (2000)           $850 million*              $0.15 million

.

Source: Gambling Control Board, Minnesota State Lottery, Minnesota Racing Commission, House Research.
*Estimate from the "fedgazette" (March 2003), published by the Federal Reserve Bank of Minneapolis. Net receipts is the total amount wagered with a gambling sector, less payouts to winners, but before expenses.



April 20, 2004

Caesars ups its ante in bid for mall casino;
By a gambling giant's forecast, state tax coffers could get up to $253 million a year.


by Mark Brunswick; Staff Writer, Minneapolis Star Tribune

     The two-color flier recently began appearing in the mail in Bloomington, with a picture of a pair of dice and the "Monopoly Is Fun ... When It's A Board Game." It complains that Minnesota is losing millions in tax revenue because of the state's Indian gambling monopoly.

     The small print indicates the flier was prepared and paid for by the Minnesota Entertainment Development Corp. But the real money behind the literature has a better known name: Caesars Entertainment Inc.

      That would be Caesars, as in $4.5 billion in annual net revenue, 29 properties in five countries on four continents, 29,000 hotel rooms, 2 million square feet of casino space and 54,000 employees.

     The gambling industry behemoth is making a high-priced and high-profile push for a proposal to construct a casino near the Mall of America in Bloomington.

     Caesars, which has since severed its ties with the small lobbying firm that produced the "monopoly" mailing, has hired a top-notch local lobbying firm with more legislative horsepower. It has conducted its own polling in Bloomington to determine how residents might feel about a casino in their back yard - and how they feel about elected officials who might get in the way.

     What had appeared to be a potential logjam of gambling proposals in the Legislature showed signs of a break-up in recent weeks when Senate Majority Leader Dean Johnson, DFL-Willmar, signalled that some members of his caucus were pushing for several gambling proposals to be heard.

     While cautioning that gambling would not be part of any budget solution, Senate Taxes Committee Chairman Larry Pogemiller, DFL-Minneapolis, also said he would hold a hearing on all the gambling proposals within the next two weeks.

     That slight opening has rejuvenated Caesars' effort for its Mall of America plan more than any of the other gambling proposals. The mall idea would require a constitutional amendment to be realized. Caesars has projected it would bring in at least $1.1 billion in annual revenue and generate $213-$253 million a year in state gambling taxes alone.

     Last week, corporate officials made the rounds at the State Capitol, in the process generating a whisper campaign in the corridors over who had seen "the Caesars people," with noticeable attention paid to the bling bling on their ring fingers and wrists. The group met with legislative leaders in the House and Senate and representatives from the governor's office.

     The renewed effort comes as one of the year's gambling proposals faces a crucial committee vote today. The House Ways and Means Committee is scheduled to vote on a plan for the state to become a partner in a metro-area casino with two struggling northern Minnesota tribes. The plan would allow the two tribes, Red Lake and White Earth, to tap into the lucrative metro gambling market. In return, the state would get 20 percent of the gross revenues, an estimated $89 million a year.

     While the prospects for a favorable vote in committee remain iffy, the tribes - the largest Indian nations in the state but among the poorest - have launched a public relations effort, with a TV ad campaign designed to show that not all tribes have benefitted equally from Indian casinos.

     Other gambling proposals remain on the table. One bill in the Senate would allow the Canterbury Park horse racing track in Shakopee to install slot machines, known as a "racino." The House already has passed such a measure. Another bill would allow a card room at a proposed harness racing track in Anoka County.

     But by far the most vigorous push behind any gambling proposal now is coming from Caesars. The Caesars proposal would generate the most revenue for the state.

     While supporters say the proposal is not site specific, there is little doubt that the Mall of America is the preferred site. A schematic drawing prepared by Caesars shows what it thinks is a possibility: a 160,000-square-foot multi-story combination casino and hotel just north of the mall, with 5,000 slot machines and 150 gaming tables. Its exterior would be a combination of Romanesque columns and rotundas interspersed with gabled roofs and a porte-cochere and water garden.

     The site would be developed, owned, operated and managed by Caesars in connection with a state authority created to license gambling activities.

     A study widely circulated at the Capitol by the accounting firm Ernst & Young trumpets the benefits of the mall site, which annually generates more visitors than Las Vegas, New York City or Atlantic City.

     "The location and demographics of the region, coupled with the extraordinary visitation statistics generated by the mall would allow this facility to not only compete with Native American casinos located throughout the State of Minnesota and surrounding jurisdictions, but would certainly grow the market and project it into becoming one of the significant gaming destinations in the country," the report concludes.

     Bloomington-area legislators and the city's leadership oppose the idea of a casino next to the mall - or at least they support the idea of letting Bloomington voters decide in a referendum. The site already has an approved project with a development contract in place for the next phase of construction at the mall. Bloomington officials say the city has spent more than $127 million in recent years providing infrastructure for developing property near the site.

     But they recognize the influence that Caesars' money can bring and the difficulties they may face in opposing it.

     "I think people in Bloomington need to know this will be money that will be exported out of Minnesota," said Rep. Ann Lenczewski, DFL-Bloomington. "But I certainly don't have the money to run a campaign to challenge them on what they claim. The resources at their disposal are enormous to make their case, whether what they say is true or not."

     Caesars officials said the firm does not go where it is not wanted, but acknowledged that they are hoping to conduct an education effort to show the value of their proposal. They point to an estimated 5,200 construction jobs and more than 2,200 full-time jobs once the facility were built, numbers that could have building trades and service industry unions salivating in support.

     "Our company has a long history of going to places where people want us to come," said Robert Stewart, vice president of communications for Caesars. "But the idea has to stand on its merits. We're talking about making the case with facts that are supportive. Our best prospect is to present the facts in a dispassionate way."

     Mark Brunswick is at mbrunswick@startribune.com.



July 8, 2004

Report: State's Indian casinos had third-highest take in U.S.


by Mark Brunswick; Staff Writer, Minneapolis Star Tribune

     Minnesota's Indian casinos raked in more than $1.3 billion in revenues last year, the third-largest total in the country, according to a new report.

     The state's gaming tribes trailed only California's and Connecticut's in revenues, part of a $16.2 billion national Indian gaming industry, according to a study by the Los Angeles-based Analysis Group.

     Wisconsin was fifth-highest in revenues.

     The top five states, including Minnesota, accounted for 61 percent of total gaming revenue, the report said. Indian gaming grew more than eight times faster than commercial casinos.

     Despite the large numbers, revenues for Minnesota's 19 casinos run by 11 gaming tribes grew by only 1.1 percent in 2003 over 2002, the report said. Tribal casino revenues nationally rose 12.1 percent last year. Wisconsin Indian gaming grew by 7.5 percent last year, according to the report.

     Alan Meister, an economist who wrote the report, attributed the sluggish growth in Minnesota to a gambling market that faces competition from commercial gambling in other states but said there appeared to be areas for growth. Most of the growth in Indian gaming elsewhere was from tribes building new and larger resort complexes.

     Growth may also be affected by the uncertainty over the future of gambling in the state, exacerbated by off-again, on-again talks between the tribes and the state over compacts that allow Indian tribes a continued monopoly on casino gambling, Meister said.

     "Gaming in that region has always been fairly strong," Meister said. "The tribes there are not expanding their gaming options very much."

     Indian gaming is likely to remain a hot topic in Minnesota, and the report could fuel the debate, particularly over payments that tribes make to states. Gov. Tim Pawlenty and others have argued that Minnesota's tribes need to step up with additional funds to ensure a continued monopoly or face the possibility of an expansion of non-Indian gaming.

     Minnesota's gaming compacts, which have no end date, require only $150,000 a year in contributions from the tribes to the state, all for gambling enforcement. Nationally, tribes paid $759 million in revenue sharing with states.

     Meister said some of his figures, representing 356 gaming facilities operated by 222 tribes, were obtained from public records, from tribes and from other sources with the understanding that he not reveal individual casino figures, and from computer modeling. Gaming revenue refers to money earned from gambling that includes bingo, slots and card games such as blackjack.

     Debating the numbers

     But John McCarthy, executive director of the Minnesota Indian Gaming Association, which represents nine of the 11 gaming tribes, disputed the report's numbers because Minnesota's gaming tribes do not open their books to release revenue figures. He said the report's figures for Minnesota revenues were likely overestimated, putting the figure closer to an estimated $700 million to $800 million a year in revenues.

     "It's got to be very anecdotal because he doesn't have revenue figures. Nobody has given them to him," McCarthy said.

     The report does not break down revenues for individual tribes or casinos, which are believed to vary widely in Minnesota.

     Mark Brunswick is at mbrunswick@startribune.com.

Tribal casinos: the big five states

Indian casinos in just five states account for about 60 percent of the total revenue collected by tribal gaming nationwide, according to a new report. Revenue refers to the total amount wagered, minus payouts to winners.

.

2003 revenue, in billions


California           $4.2
Connecticut        $2.0
Minnesota          $1.4
Arizona              $1.2
Wisconsin          $1.0

Sources: Analysis Group, Indian Gaming Industry Report



September 23, 2004

St. Paul, Minn.-area tribe last reported $47 million in casino profits in 1997


By Patrick Sweeney, St. Paul Pioneer Press, St. Paul, Minn.
Knight Ridder/Tribune Business News

The Treasure Island casino near Red Wing earned about $46 million in profits in 1997, according to financial statements released Wednesday by the Minnesota Public Safety Department.

That was the last year in which the Indian tribe that owns the casino supplied audits to the state.

At present, state gambling investigators look at annual audits for Indian casinos. But the state does not request copies, and tribes no longer send copies to the Public Safety Department.

Treasure Island audits for 1997 and five previous years were made public after a judge last week approved a negotiated settlement of a three-year lawsuit over public access to financial data held by the state.

Financial statements for the two casinos operated by the Mille Lacs band of Ojibwe in Hinckley and Onamia were released earlier this year.

No similar financial statements from the Mystic Lake casino in Prior Lake, Minnesota's biggest Indian casino, have yet been made public.

Frank Ball, director of the state's gambling enforcement unit, said he believed that if his inspectors sought copies of current audits the tribes would refuse to provide them and also might deny inspectors the right to examine them.

According to the most-recent Treasure Island audit released Wednesday, the casino near Red Wing had $107 million in net revenue in 1997. After operating expenses, the casino transferred $46.5 million in profits to the Prairie Island Dakota Community, the tribe that owns the casino.

In earlier years, similar annual profit figures ranged between $33 million and $43.7 million.

In 1997, Treasure Island had 1,480 slot machines, 50 blackjack tables, a 550-seat bingo hall and a 240-room hotel.

Jake Reint, a spokesman for the tribe, refused Wednesday to release any more current financial data on the casino.

The most recent Mille Lacs audits in the state's possession covered 1995. They showed the Hinckley casino had about $23 million in net income, after expenses, on $98 million in net revenue. The Lake Mille Lacs casino had about $15.4 million in net income on $76 million in net revenue.

In 1995, the income figures were depressed because the Mille Lacs tribe was paying 40 percent of net revenues to a management company that built and operated the casinos. The company no longer operates the casinos.

The legal battle over public access to Indian casinos' financial statements began in 2001 when Bill Lawrence, publisher of the Native American Press/Ojibwe News newspaper, demanded access to data the tribes had given the state.

The Prairie Island and Mille Lacs tribes filed suit to keep the documents confidential.

In April, the Minnesota Court of Appeals sided with Lawrence. In the settlement last week, Lawrence and the state agreed to keep confidential a few numbers that the tribes said were trade secrets.

http://www.hotel-online.com/News/2004_Sep_23/k.SPC.1096049481.html



September 25, 2004

Pawlenty ups the ante;
Report outlines state's argument for a share of tribal gambling revenue.


by Patricia Lopez; Staff Writer, Minneapolis Star Tribune

     Signaling his most serious intention yet for the state to cash in on Indian gambling revenue, Gov. Tim Pawlenty on Friday released a report that says casino gambling is now a $10 billion-a-year industry in Minnesota and yet the state barely shares in the take.

     "That needs to change," Pawlenty said in a letter sent to all four legislative leaders Friday.

     The report was prepared by Mike Vekich, outgoing acting director of the Minnesota Lottery, who noted that Minnesota's is the nation's third-largest tribal casino industry - only California's and Connecticut's are larger - and is the only one of the three not to directly share its profits with the state.

     Connecticut tribes make the largest payments, according to the report - 25 percent of revenue from machine games. In return, Connecticut guarantees the tribes exclusivity over such video gambling.

     California is still negotiating some of its compacts, but there, too, tribes will share with the state as much as 25 percent, depending on the size of their operation, the report said.

     In what appears to lay the groundwork for next year's legislative session, the report sets out the state's options on gambling revenue, including a state-tribal cooperative casino that could yield $97 million a year for the state and video lottery terminals that could result in a whopping $400 million annually.

     The report divided the state's tribes. Those with the state's most lucrative casinos remain adamantly opposed to what they see as an attempt to force money from them, while those still seeking a larger cut of the action were hopeful that their proposal may provide middle ground.

     John McCarthy of the Minnesota Indian Gaming Association, which represents nine of the state's 11 tribes, disputed the report's numbers and said the report itself "is just another way of threatening the tribes with a gun to the head." McCarthy said the state has continually asked the tribes for the total amount wagered and the tribes have never given it. "Yet now they claim to know it's $10 billion," McCarthy said. "That's very interesting. I'm not privy to the number, but with my knowledge of the industry, I would say it's about half that."

     Vekich said that figure was an interpolation of numbers from the 2004 Indian Gaming Industry Report. "It's an estimate," Vekich said. "We're not privy to all the data for tribal gaming, but my staff thinks it's a good estimate."

     Ron Valiant, executive director of the White Earth Band of Ojibwe, said he hopes the report will renew interest in his tribe's proposal for an urban casino that would be owned by the state and the White Earth, Red Lake and Leech Lake bands. That proposal gathered a little momentum in the last legislative session and then stalled. Valiant said it would yield about $100 million annually to the state. Also, $130 million would be divided among the three tribes that together, he said, represent 85 percent of the state's Indian population.

     "We'll do revenue sharing," Valiant said. "We'll do a partnership with the state. If the governor wants a compromise, we've got a great one."

     Vekich lists that option as the state-tribal cooperative casino, which at $97 million would yield nearly twice what a "racino" - slots at Canterbury Park - would bring in. But it's slightly less than the yield of a state-owned casino, which Vekich said could bring $115 million a year.

     Not lost on either Valiant or McCarthy is that the last option listed by Vekich - video lottery terminals - is the most lucrative of all and the forte of the state lottery director that Pawlenty just appointed. Clint Harris, who takes over the Minnesota Lottery next month, is now the director of the South Dakota Lottery, which gets 95 percent of its take from video gambling.

     "Video lottery is just doublespeak for slots in bars," McCarthy said. "I don't think Minnesotans want to see slots in every neighborhood bar. I think most Minnesotans think we have enough gambling." McCarthy said tribal leaders last met with members of Pawlenty's staff a week ago. "There's still never been a dollar figure mentioned," he said. "The tribes have made it clear they will not do direct revenue sharing on the one economic deal they have. That's like going down to the soup kitchen and asking the hungry man for half his cup of soup."

     House Majority Leader Steve Sviggum, R-Kenyon, said that he continues to prefer the racino at Canterbury Park but that "citizens are continuing to warm to the need for competitiveness and fairness." Sviggum said he would not want the state to be in the position of operating a casino with the tribes. "I don't think we'd ever want to do that," he said.

     Senate Minority Leader Dick Day, R-Owatonna, who championed the racino in the last session, said that Indian gambling "is big business, and we're one of the states that gave it all away when we negotiated way back when. We didn't realize what we were doing at the time."

     House Minority Leader Matt Entenza, DFL-St. Paul, was dismissive of the report, saying, "Like every other report or task force Pawlenty produces, it restates things and doesn't do anything new."

     Patricia Lopez is at plopez@startribune.com


Minnesota gambling, today...and tomorrow

Direct state revenue from gambling is now comparatively modest, but could increase if the state tapped new forms of gambling.

Gambling type                Total wagered      State revenue

State Lottery                  $387 million           $101 million

Charitable gambling       $1.4 billion            $57 million

Horse racing                   $81 million            $269,000

Tribal casinos                $10 billion             $0

    .

     Gambling expansion options

                                                     Estimated annual state revenue

    Additional tribal casinos:            $0
    State-tribal cooperative casino:  $97 million
    Canterbury Park racino:            $50 million
    State-owned casino:                  $115 million
    Commercial casino:                   $300 million
    Video lottery terminals:              $400 million

         - Source: Minnesota State Lottery report



September 28, 2004

Gambling;
Time to try for a better deal


Minneapolis Star Tribune

     Publicly, the heat got hotter last week for Minnesota's casino-running Native American tribes. Armed with new figures showing that the state nets only a 1.5 percent return from Minnesota's $10 billion gambling industry, Gov. Tim Pawlenty used his weekly radio program to renew his call for "a better deal."      In private talks with the tribes, too, pressure from the administration for new gaming compacts has been rising for some time, and for understandable reason. This state is still in money trouble, and Pawlenty is still preaching "no new taxes." To make that vow stick with the 2005 Legislature, he likely needs to come up with a sizeable chunk of new revenue from a nontax source. Gambling could be that source - through revenue-sharing agreements with the tribes, or several other options, all of which involve ending the tribes' monopoly on casinos.

     A new report prepared by the state lottery noted that among the five states with the largest tribal casino revenues, Minnesota is the only one that does not collect revenue-sharing payments from the tribes.

     The report also described other gambling options. A "racino" at Canterbury Park, an option popular with the Legislature's GOP leaders, would bring the state $50 million a year, it said. That's small fry compared with the yearly take that could come from a state-owned or joint state-tribal casino (both in the $100 million range), a commercial casino ($300 million) or video slot machines in bars ($400 million).

     But those options involve the proliferation of venues for an activity that has a decided downside for society. Gambling may be a winner for the state budget, but it invites a compulsion that can do great harm to individuals, sap economic productivity and add to society's social welfare and criminal justice costs. Those costs are difficult to tally, but they are surely substantial enough to give good stewards of this state pause. If the state can derive more benefit from existing casinos, without giving people more places and more encouragement to gamble, it should.

     That notion is not unique to Minnesota. Several other states recently have entered into new revenue-sharing arrangements with tribal casinos, in exchange for a guaranteed Indian monopoly. Notable among them is California, where five tribes have agreed with Gov. Arnold Schwarzenegger to share 15 to 25 percent of casino revenue with the state, in exchange for exclusive expansion rights.

     That changing national scene, plus the undeniable lure of new nontax revenue for politicians, have to be weighing heavily on Minnesota's tribal leaders. Their ability to keep non-Indian competition at bay through political muscle may be slipping away. Last session, even the leader of the political force that has been the tribes' best ally, Dean Johnson of the Senate DFL caucus, started encouraging the tribes to reconsider their resistance to revenue-sharing with the state.

     It was good advice - and at least one band appears to be heeding it. Melanie Benjamin, chief executive of the Mille Lacs Band of Ojibwe, said last month that her band would discuss giving the state a share, in exchange for authorization to operate more games and simulcast horse racing.

     The Leech Lake Band, meanwhile, has joined forces with the state's two largest native groups, Red Lake and White Earth, in expressing willingness to go into the casino business in the metro area with the state as a partner. If gaming is to be expanded in Minnesota, that would be the most justifiable option. Its benefits would accrue largely to native people who have thus far gained little from 16 years of Indian gambling.

     With the next budget-setting session of the Legislature only three months away, other Minnesota bands should be reassessing their positions. Pawlenty's words last week should send a clear message that gambling's status quo in Minnesota won't hold much longer.



October 9, 2004

State, casinos at odds over gambling profits


by Patricia Lopez; Staff Writer, Minneapolis Star Tribune

     Gov. Tim Pawlenty on Friday said he wants tribal casinos to open their books to state government and put to rest any lingering disputes over just how much casinos make.

     A report issued in September by the Minnesota Lottery put the figure at $10 billion for total annual gross wagers at casinos throughout the state. That figure, he said, came from a compilation of data from state and local government sources, casino industry reports and data from Bear Stearns, a worldwide investment securities and brokerage firm.

     Tribal officials immediately asserted that the administration was inflating the number in order to make it seem as though profits were higher than they are. However, the tribes have not, in the past, been willing to open their books, contending that casinos are private businesses and that the tribes constitute a sovereign nation.

     Pawlenty and tribal officials have been locked in a battle over casino profits for some time, with Pawlenty intent on forcing the tribes to pay the state a portion of their profits in return for retaining their exclusivity on casino-type gambling. The nine tribes that make up the Minnesota Indian Gaming Association have largely resisted that effort.

     In a news release Friday, Pawlenty said that "the time has come for the state of Minnesota to get a better deal in our relationship with big gaming interests. Minnesota has the third-largest tribal casino industry in the nation, trailing only California and Connecticut. In those states, tribes have reached mutually beneficial agreements with state governments."

     Pawlenty said in the release that lottery officials have put the state's net gambling revenue at $1.3 billion for 2003 and would indicate gross casino revenues of about $14 billion.

     In Arizona and Wisconsin, where casino revenues are public information, yearly revenues for 2003 were $1.2 billion and $1.1 billion respectively, Pawlenty said in the release. Minnesota, he noted, has more video gambling machines than either state and more table games than Wisconsin, so revenues should be higher.

     "We're not going to get into this numbers game," said John McCarthy, of the Minnesota Indian Gaming Association. "We kind of feel it's like telling a mugger how much money is in your wallet. Now he says we're making $14 billion. Before, he said it was $10 billion. He's deliberately misleading the public to make it seem that there's a huge pot of money there and that's not true. He never goes to net after expenses, which is the only real number to use. This is proprietary information. The tribes are not going to release this information just because the governor is putting these artificially inflated figures out there. He wants people to believe there are billions of dollars to be shared, and there isn't."

     Patricia Lopez is at     plopez@startribune.com



October 22, 2004

Pawlenty wants tribes to pay $350 million;
Plan guarantees casino exclusivity in exchange for annual payment.


by Patricia Lopez; Staff Writer, Minneapolis Star Tribune

After pressuring Indian tribes all year to share casino gambling revenues with the state, Gov. Tim Pawlenty has finally put a number on what he wants: $350 million a year, which he says amounts to about a fourth of tribes' gambling profits.

     In a personal letter that went out to the state's tribal leaders on Oct. 12, Pawlenty asked them to meet with him on Oct. 27 to discuss a new agreement that would, for the first time, require Minnesota tribes to turn over a portion of their gambling revenues to the state.

     If they don't, Pawlenty is quietly developing other options. Dan McElroy, his chief of staff, said Thursday that he went to Las Vegas two weeks ago to meet with representatives of three of the largest casino concerns in the country: Harrah's, MGM Grand and Mandalay Bay. They are "very interested in Minnesota," McElroy said.

     He said Pawlenty's first preference is still to reach a new agreement with the state's tribes. It is unknown how many tribal leaders plan to attend the meeting, but several say they are not going and know of no band leader who is.

     "The governor knows full well where this community stands," said Helen Blue-Redner, chairwoman of the Upper Sioux Community.

     "He's trying to use this as a de facto tax on tribes," Blue-Redner said. "This is not allowed within the bounds of the Indian Gaming Regulatory Act of 1988, and he knows it."

     Pawlenty is "very sincere about this proposal," McElroy said. "But the tribes have a choice to make here. Exclusivity is not guaranteed in their current compact."

     Pawlenty's letter proposes that the tribes receive a written guarantee of exclusivity. In return, the tribes would pay the state $350 million a year. "The payment could be reduced for smaller casino operations as long as the aggregate payment was maintained through higher payments by the larger operations," Pawlenty said in the letter.

     To put the figure Pawlenty wants in perspective, $350 million would be a little more than half the amount that all corporations in Minnesota were projected to pay in corporate income taxes for 2004. It is more than the amount generated by the motor vehicle sales tax charged on all vehicles sold in the state.

     In return for that payment, tribes would be given exclusive casino gambling rights for a "time period to be agreed upon," the letter said.

     Vegas in Minnesota?

     Since 1989, the state's tribes have operated under compacts negotiated with Minnesota that gave them the right to casino gambling, but did not specifically guarantee exclusivity. The tribes have always argued that exclusivity was implied, a point the governor disputes. The compacts had no termination date.

     Pawlenty makes no promises of additional benefits to the tribes in the letter, although he notes that "additional games, technologies, sites and changes to maximum payouts ... could be considered."

     John McCarthy, executive director of the Minnesota Indian Gaming Association, said the tribes viewed the letter "not as an invitation, but more like a summons. That's not very good protocol for government-to-government relations."

     He said the tribal leaders are sending individual responses to Pawlenty, but "I'm not aware of anyone from our association who's going." The association is made up of nine of the state's 11 tribes and includes those with the most lucrative casinos.

     McCarthy called the request for $350 million a year "laughable," and said, "there isn't that kind of money here."

     The offer, he said, "isn't real negotiation. I think he's made up his mind he wants Vegas in Minnesota, and all of this is just window dressing."

     Caesars Entertainment, which is merging with Harrah's, made its first serious bid to enter Minnesota last year, hiring lobbyists and presenting a proposal that said a Vegas-style casino could yield as much as $400 million a year for the state.

     McElroy said that in his meeting with officials from the various casinos, he was told they would not lobby the state directly, but would be interested in submitting a "request for proposal," which would be the beginning of the bid process for casino development.

     The Pawlenty administration has said the $350 million figure is based on a recent Minnesota Lottery report that estimated total wagers for casino gambling in the state at $10 billion annually. The $350 million figure is the administration's calculation of what 25 percent of net profits would be for the industry in Minnesota.

     Mark Van Norman, executive director of the National Indian Gaming Association, said that estimate is "way off base."

     He said the National Indian Gaming Commission, a federal regulatory agency that receives annual audits from the nation's tribes, has put gross revenues for Indian gambling across the country at $16.7 billion. For the region that includes Minnesota, the figure is $3.7 billion, but that region includes Wisconsin, Michigan, North and South Dakota, Nebraska and Iowa, Van Norman said.

     Pawlenty said in his letter that "numerous other states with large tribal gaming industries have recently negotiated agreements with tribes which essentially provide exclusivity in exchange for revenue sharing payments." In the past, he has made specific comparisons to Connecticut and California.

     Van Norman said Minnesota's situation is different from that of both states. In both instances, he said, "these were voluntary agreements with the tribes. What's going on in Minnesota is different. They entered into a good-faith agreement with the state and now the state is coming back and saying they want to take tribal revenue. The governor says he wants 25 percent, but I think it would be more like 80 percent. What he's asking of the tribes would ruin the Indian gaming industry in Minnesota."

     Blue-Redner, who sent a blistering letter to Pawlenty after he called for a "better deal" on gambling profits at a fundraising stop in Willmar earlier this month, said she still wants him to debate her publicly on the issue.

     In an Oct. 6 letter, Blue-Redner called Pawlenty's vision "skewed," and said that "you in essence want to tax the tribes by whatever means necessary in order to make up for fiscal unsound decision-making on the part of Minnesota's leadership."

     The Upper Sioux, she said, "will not share revenues with the state nor will we justify ourselves and our financial contributions." She said the Upper Sioux believe Pawlenty is "practicing a form of racial profiling because you are directly placing the burden of the state on the backs of the Indian people. Are you demanding that any other entities or corporations do more of their fair share? No you are not. We have completely lost faith in your administration."

     'Tribes have a choice'

     McElroy said the administration considers its offer "fair and reasonable." The 25 percent figure is one used in several states, he said, and in New York, the federal Bureau of Indian Affairs ruled that "exclusivity has value."

     Tribes, he said, need to weigh the proposal against other possibilities that could reduce their revenues even more. "The gaming tax on private (non-Indian) casinos in Illinois is 70 percent," McElroy said, noting that state gets about $700 million a year from commercial gambling.

     "The issue here is the tribes have a choice," he said. "I came away from my [Las Vegas] meeting thinking that the best outcome would be a new arrangement with our tribes." Although the state could get "substantially more revenue from a private gaming option," he said, "we would have pressure to have more than one casino, although that could be done. We'd also have to establish a gaming commission. But that could be done too."

     For those who say "isn't a deal a deal?" McElroy said, "I would say, yes it is. And the tribes must know that the deals in 1989 and 1991 did not include exclusivity."

     Patricia Lopez is at plopez@startribune.com.



Pawlenty's cards on the table

Gov. Tim Pawlenty is asking tribes to pay the state about what it could collect from the most lucrative expansion options.

Gambling expansion option           Est. annual state revenue

Additional tribal gaming                    $0
State-tribal cooperative casino         $97 million
Canterbury Park racino                   $50 million
State-owned casino                         $115 million
Airport casino                                 $27 million
Commercial casino                         $300 million
Video lottery terminals                    $400 million
Proposed tribal contribution            $350 million

Source: Minnesota State Lottery report



October 23, 2004

Casino plan is called begging;
Senate DFL leader: Pawlenty's request of $350 million from tribes is desperate.


by Mark Brunswick; Staff Writer, Minneapolis Star Tribune

     Senate Majority Leader Dean Johnson on Friday was harshly critical of a proposal by the Pawlenty administration to extract $350 million a year from the state's Indian tribes in exchange for a continuing casino monopoly. Johnson called Pawlenty's move a desperate attempt to fix a budget problem produced by "shifts, gimmicks and one-time fixes" of Pawlenty's own making.

     In an Oct. 12 letter to tribal leaders, Pawlenty urged them to attend a meeting next week to discuss his proposal and, for the first time, put a price tag on their possible contribution.

     Meanwhile, Pawlenty's chief of staff, Dan McElroy, recently had conversations with several Las Vegas casino companies about the possibility of expanding gambling operations into Minnesota if the tribes refuse to negotiate.

     Several tribal leaders responded dismissively and said they would not attend Pawlenty's meeting. John McCarthy, executive director of the Minnesota Indian Gaming Association, called Pawlenty's proposal "laughable."

     Johnson, DFL-Willmar, said Pawlenty has "backed himself into a corner."

     That's after making promises to no-tax groups such as the Minnesota Taxpayers League and the national Club for Growth, and now must find a way to deal with an expected budget deficit, Johnson said.

     "What he's attempting to do by sending his chief of staff with his hat in his hand to Las Vegas is making Minnesota the next gambling mecca of the nation. He does this under the banner of being beholden to the Taxpayers League and new Club for Growth. He is walking down a very dangerous path in his political agenda at the expense of Minnesota and good public policy," Johnson said.

     Responding to Johnson, McElroy, who met with the Las Vegas executives while attending a National Governors Association meeting, said Pawlenty's interest in reaching a new agreement with the casino-owning tribes is an issue of fairness. While Pawlenty's proposal may contribute to an overall budget fix, it is not designed for that purpose, he said. The $350 million figure is equivalent to what other states receive from their gambling tribes and would allow Minnesota to compete with other Midwestern states with gambling, such as Iowa, Illinois, and Michigan, he said.

     "The gambling atmosphere has changed. He wants to do what's right for Minnesota," McElroy said.

     On the agenda

     Minnesota's 11 tribes operate 18 casinos under compacts with the state that require them to provide $150,000 a year for regulation and inspection but no other revenues. In his State of the State address earlier this year, Pawlenty opened the door for getting the tribes to contribute more.

     Republican Pawlenty's recent moves to bring the tribes to the table - and DFLer Johnson's reaction - are setting the stage for gambling to play a prominent and contentious role in next year's legislative session. Johnson said gambling will probably be one of the top three topics when the Legislature convenes in January, behind the budget and a bonding bill for borrowing.

     Gambling proposals could include a video gambling "racino" at the Canterbury Park horse track, a possible agreement with some northern tribes for a metro-area casino and a possible casino owned by a Las Vegas company.

     Last year, Caesars Entertainment proposed building a casino near the Mall of America, a proposal that generated considerable controversy over the implications of outside money in the state's gambling industry.

     While Caesars is in the process of being acquired by Harrah's Entertainment, it still maintains an agreement with the mall to develop near the site, one of the prime pieces of commercial real estate in Minnesota.

     Robert Stewart, vice president of communications for Caesars Entertainment, said his company remains interested in Minnesota. McElroy met with Caesars as well as Harrah's, MGM Grand and Mandalay Bay.

     "We've always said that we are interested in going to places where we are wanted. The indication was that there were large numbers of people in the Bloomington area who were interested and a large number of folks throughout the state who were interested in the project," Stewart said.

     Representatives of the state's bar and restaurant owners also hope to promote a proposal to legalize video slots in bars passed this legislative session. The group has met with Pawlenty in the past. They say they are heartened by the recent hiring of Clint Harris as the director of the state's lottery. In South Dakota, where Harris was executive director of that state's lottery, much of the lottery's profit comes from its video gambling, with games such as video poker and video blackjack available in most bars and taverns.

     "These are the things you fight for, small businesses trying to survive, especially in rural Minnesota," said Colin Minehart, past president of Minnesota Licensed Beverage Association. "We're very optimistic."

     Mark Brunswick is at      mbrunswick@startribune.com.


Minnesota gambling, today ... and tomorrow

     Direct state revenue from gambling is now comparatively modest, but could increase if the state tapped new forms of gambling.

Gambling type            Total wagered        State revenue

State Lottery                 $387 million           $101 million
Charitable gambling       $1.4 billion             $57 million
Horse racing                  $81 million             $269,000
Tribal casinos                 $10 billion             $0


Gambling expansion options
                                                                    Estimated annual state revenue

Additional tribal casinos                                $0
State-tribal cooperative casino                      $97 million
Canterbury Park racino                                $50 million
State-owned casino                                     $115 million
Airport casino                                             $27 million
Commercial casino                                      $300 million
Video lottery terminals                                 $400 million

Source: Minnesota State Lottery report


October 26, 2004

Minnesota Governor Stars in Radio Tribal Casino Pleas


casinocity.com news

ST. PAUL, Minnesota – As reported by the Minnesota Star Tribune: 'Gov. Tim Pawlenty is starring in a new series of radio ads on behalf of Republican candidates for the House of Representatives, calling for Indian tribal casinos to share some of their profits with the state.

"'I know that tribal gaming has brought in billions of dollars, but it's time that the state get a fair deal like they have in other states and that the tribes should pay some of that money to the state,' the GOP governor says in the 30-second spots of the House Republican Campaign Committee, now registered as simply the HRCC.

"The ads end with statements saying that individual GOP candidates back the governor's initiative. The campaign, spread across dozens of state House districts, coincides with a renewed Pawlenty effort to pressure the state's 11 Indian tribes to renegotiate gaming compacts that now require only an annual $150,000 payment to the state for regulation and inspection.

"…The governor said Monday that neither his invitation to tribal leaders to meet in his office on Thursday nor the radio campaign -- scheduled to run until next Tuesday's election -- were timed for political effect.

"…He said Monday that few tribal leaders have responded.

"…Pawlenty said his staff is asking the leaders to send representatives if they can't make it themselves. Those who resist increased payments to the state 'haven't thought through the benefits to them,' he said…"



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