A few reports on Indian
Casino Gambling in Minnesota
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.
--------------------------------------------------
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