Battle lines against casino growth drawn at '93 amendment

By STEVE SCHULTZE

sschultze@journalsentinel.com, Journal Sentinel

Monday, May 5, 2003

The legal route to the explosive growth of Indian casinos in Wisconsin remains littered with controversy, including a 1993 state ban on gambling expansions that some argue should preclude the broadly rewritten state-tribal deals Gov. Jim Doyle is championing.

The meaning and import of that amendment remains at the heart of one lawsuit seeking to shut down the casinos and is a key point in a second pending case, in which Republican legislative leaders have challenged the Democratic governor's new gambling deals.

And the question deeply rattled federal officials before they gave their halfhearted endorsement last month to a gambling compact between the Forest County Potawatomi tribe and the state. That pact, which becomes official when published this week in the Federal Register, lifts current restrictions on games, requires the tribe to pay the state $84 million over the next two years and remains in force forever.

Seven more tribal gambling deals with similar game expansions have been signed and forwarded to the U.S. Department of Interior for approval, and three more deals are expected to be completed soon. Doyle is counting on a total of $210 million from the tribes to help fill the $3.2 billion state deficit for 2003-'05.

What about amendment?

How can the state's casinos expand to include roulette, craps and a host of other new games when a 1993 state constitutional amendment supposedly restricted new forms of gambling? That's the question posed by casino opponents, including officials of the faltering Dairyland Greyhound Park dog track in Kenosha.

The actual language of the 1993 amendment reads: "Shall Article IV of the constitution be revised to clarify that all forms of gambling are prohibited except bingo, raffles, pari-mutuel on-track betting and the current state-run lottery and to assure that the state will not conduct prohibited forms of gambling as part of the state-run lottery?"

Dairyland's lawyers argue that the amendment, approved by more than 60% of voters, bars expansions of the kind Doyle has negotiated. The new games and terms "greatly expand" the scope of gambling in the state and violate federal law because they outstrip what was originally agreed to in the first state-tribal gambling deals in 1991 and 1992, Dairyland's lawsuit says.

Doyle and the tribes say that because the new gambling compacts are technically revisions to the original pacts and predate the 1993 amendment, they are fully legal. The amendment doesn't make any specific reference to tribal casinos, said Eric Dahlstrom, an attorney for the Potawatomi, which operates Potawatomi Bingo Casino in Milwaukee.

"Compacts are always in conflict with state law. Fundamentally, two governments get to agree by compact what the rules on gaming are on tribal land," Dahlstrom said, summarizing the 1988 federal law that ushered in tribal casinos.

A 1991 federal court ruling in Wisconsin further paved the way for casinos. In it, Judge Barbara Crabb said that when voters legalized the lottery in 1987, the language was broad enough to encompass virtually any game of chance. Even though the state restricted the lottery to the familiar ticket games, tribes have the right to operate any games featuring prizes, chance and some payment, Crabb ruled.

Assembly Speaker John Gard (R-Peshtigo) recalled that lawmakers put the gambling amendment before voters because of concerns at the time that casinos could pop up in unwanted locales around the state, types of games could proliferate, and also because of pressure to expand non-tribal gambling venues to riverboats, racetracks and taverns.

"People at the time were trying to put the genie back into the bottle," said Gard, a leader of current efforts to try to scuttle Doyle's compacts. When the amendment was approved, "they at least felt like they closed the bottle." With Doyle's new gambling deals, "they just threw the bottle away," Gard said.

David Helbach, a former Democratic state senator and majority leader, said his understanding a decade ago was that the amendment would curb tribal gambling expansions.

"We tried to restrict the lottery language so Indian gaming would not be expanded," said Helbach, now a utility lobbyist. The amendment, which had been sought by then Gov. Tommy G. Thompson, also was supposed to strengthen the governor's hand in future tribal gambling negotiations, Helbach recalled.

At the time, there was turmoil over whether tribes could open casinos off their reservations, and tavern owners were complaining that the tribal operations were cutting into their business, he said.

Lawmakers, however, were warned that the amendment would have little impact on the tribal casinos by none other than Doyle, then the state attorney general.

In a June 24, 1992, letter, Doyle wrote that the amendment wouldn't affect the versions of compacts in effect at the time or renewals of compacts.

The latest Doyle-negotiated versions are also considered extensions of the originals.

"Since the renewal arises out of the compact itself, the ability to renew would not be affected," Doyle wrote.

He also warned, however, that if a tribal gambling compact expired or was terminated, a new one might be limited to a standard form of a lottery, raffles, bingo and pari-mutuel track betting.

Doyle's view on the 1993 amendment has remained consistent over the years, said Dan Leistikow, spokesman for the governor. "It had nothing to do with Indian gambling," he said. The purpose was to restrict the state lottery to its traditional form, he added.

Crux of lawsuit

Questions on the 1993 amendment in the Dairyland case are pending before the state Court of Appeals. Dairyland has appealed a ruling by Dane County Circuit Judge Richard Callaway that sided with Doyle.

Callaway said the Legislature has had the opportunity to restrict gambling since the amendment passed in the way Dairyland's lawyers have suggested -- by expressly limiting the types of games the governor could negotiate for tribal casinos -- but has not done so.

The second pending lawsuit, by the Legislature, includes a claim that the amendment barred the tribal casino expansions, but also argues that the new pacts illegally cut lawmakers out of a legitimate oversight role.

If Doyle loses either case, don't expect a dramatic halt to casino operations. Appeals would be a virtual certainty, with support from tribes around the country that would view such a loss as a threat to tribal gambling in general.

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