St. Croix reach deal with state on gaming

Smaller operations mean smaller payments

By STEVE SCHULTZE sschultze@journalsentinel.com, Journal Sentinel

Tuesday, May 13, 2003

The St. Croix Chippewa tribe will pay the state about $9 million over two years under terms of a new, permanent tribal-state gambling compact Gov. Jim Doyle signed Monday.

The deal Doyle cut with the St. Croix calls for an effective payment rate of about 4.5% of casino revenue, sharply lower than payment levels already approved for tribes with higher-grossing casinos, said Marc Marotta, Doyle's administration secretary.

"They are at a considerably different level than the 'Big Three' " gambling operations in Wisconsin of the Potawatomi, Ho-Chunk and Oneida tribes, Marotta said. Those tribes will pay a total of $184 million over the next two years under new gaming compacts and 4% to 8% of net casino revenue after that.

The St. Croix and several other tribes pay a lower rate because of their smaller markets and operations, Marotta said. He declined to release revenue figures, which are confidential under terms of the gambling compacts.

However, the new St. Croix compact calls for a $3.5 million payment in 2004 and 4.5% of net revenue after that. That would mean a payment of about $5.5 million in 2005 on revenue of $122 million.

The tribe operates casinos at Turtle Lake and Danbury in northwestern Wisconsin.

Tribal Chairman Jay Emery said negotiations were "a long, drawn- out process," complicated by opposition from Republican legislators. A lawsuit seeking to void the new compacts is pending in federal court.

"I am thankful we got what we got," Emery said. The open-ended term of the deal will enable the tribe to obtain financing for other business ventures, he said. He declined to detail what they'll be.

"We are striving to stand out as true businesspeople and get involved in other economics," he said.

The new compact, like others Doyle negotiated, also permits the tribe to offer craps, roulette and a host of other casino games that were not allowed under its old five-year pact. It may be a year before St. Croix offers craps and roulette, but those games will provide a competitive edge with nearby Minnesota Indian casinos that do not have those games, Emery said.

Doyle expects to receive about $200 million from the 11 tribes in casino payments over the next two-year state budget period, or about $150 million more than the state would have gotten under old gambling agreements.

The St. Croix and other new compacts have no expiration date, but regulatory terms can be renegotiated every five years and all terms in 25 years.

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