Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

Independent Student Newspaper Since 1969

The Badger Herald

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Doyle amends tribe contract

Following last year's Wisconsin Supreme Court ruling which struck down certain provisions of a gaming compact between the state and the Forest County Potawatomi, Gov. Jim Doyle announced a revised amendment to the compact Tuesday.

The former compact had an indefinite expiration date and had allowed games like roulette and craps in exchange for larger payments to the state, causing outrage among Republican lawmakers who brought the case to court.

After some reconfiguring, a new agreement was formed that provides the state with payments equal to those of the original compact. Among the provisions is an immediate lump sum of nearly $44 million to be paid to the state as well as 6 to 8 percent of the Potawatomi's gross annual casino revenue.

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This is expected to amount to an estimated $750 million in state income over the duration of the fixed 25-year term, if the compact is approved.

In effect, the expenditures made by the tribe will be larger than those made by any other corporate taxpayer in Wisconsin, with payments "on par with two to three times the corporate tax rate," according to Department of Administration spokesman Scott Larrivee.

Both parties of the $750 million deal see the situation as a victory, with each pointing to their own set of specific interests accomplished by the agreement.

"The compact will keep [Wisconsin] among the top tier of states as far as gaming revenue goes and this ongoing revenue stream … will allow us to continue moving in the right direction," Larrivee said.

According to Ken Walsh, the Forest County Potawatomi Community spokesperson, the compact enables the tribe to embark on a long-awaited expansion of its Milwaukee casino.

While the Potawatomi's planned $240 million development had already been unanimously approved by the Milwaukee Common Council, its feasibility depended on the formation of a successful compact.

"Having a 25-year term allows the tribe to gain the loans and financing [necessary] to expand the casino," Walsh said.

Additionally, with the Potawatomi constituting a considerable part of Wisconsin's workforce, the gaming compact is seen as economically beneficial on a second level because the proposed expansion is expected to create 1,000 new casino jobs and 525 construction jobs.

"Not only are the Potawatomi important in terms of pure numbers and payments, but they are also a significant employer in Milwaukee and the state," Larrivee said.

While the deal seems to have made all parties happy, the general public may be confused over its legality.

According to Steven Gonzales, a former University of Wisconsin professor of conflict resolutions, even though federal law mandates the state cannot tax a casino because it is part of a sovereign Indian nation, in order to make a profit, "[the state] is permitted to assess a reasonable amount when they provide the casino with services like highways."

"In recent years, however, the state has been charging more and more as casinos' profit margins have been increasing," Gonzales said. "The economy of Wisconsin has weakened and the state is looking for alternate sources of income."

Though tribes are immune to taxation, the states are, in turn, immune to tribal lawsuits, presenting an inherent problem in settling disputes. This accounts for the prevalence of deals and negotiations between the state and various tribes.

"The way the law is written is that it promotes gaming and requires states to negotiate in good faith with Indian States wishing to set up gaming," Gonzales, currently a professor at the Phoenix International School of Law, said.

Although both the Potawatomi and the state are pleased with the negotiation they have reached, one item remains unresolved — the issue of a proposed Kenosha casino and its corresponding impact.

Propositioned by the Menominee Tribe, the Kenosha casino, which would be located between Milwaukee and Illinois, is likely to have a negative effect on the Potawatomi's potential revenue. The Potawatomi are concerned the establishment of the Kenosha casino will draw business coming from Illinois away from their destination. While the gaming amendment has recognized the need for closer examination of the dilemma, a solution has not been reached.

According to Walsh, "Part of the agreement is that the state and the Tribe will go to arbitration," in which a proposal that would compensate the Potawatomi for the lost revenue will be presented to and decided by an arbitrator at a future date.

Before the amended agreement can go into effect, it must be approved by the Federal Bureau of Indian Affairs.

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