Suits delay expansion of casino, tribe says

Potawatomi payment to state in jeopardy

By STEVE SCHULTZE

sschultze@journalsentinel.com, Journal Sentinel

Friday, September 19, 2003

Lawsuits challenging new Indian casino deals have delayed a $120 million expansion to Milwaukee's Potawatomi Bingo Casino and also jeopardize the $40 million the tribe will owe the state next year, a Potawatomi spokesman said Thursday.

The cases, now before the state Supreme Court, challenge the constitutionality of gambling compacts that run indefinitely and abolish most restrictions on games.

But the court's acceptance of the issue has thrown a monkey wrench into casino expansion plans, said Potawatomi spokesman Tom Krajewski.

A decision from the court is not expected until next spring.

The tribe had planned to break ground on a major expansion of its Menomonee Valley casino -- the state's highest-grossing gambling hall -- this fall. Krajewski said he could not give a revised timetable.

The Milwaukee casino had some $250 million in net revenue last year, and tribal officials have projected that will double once they have the additional floor space to add more slot machines and table games.

"It isn't going to happen as soon as they had hoped," Krajewski said.

The holdup is costing the tribe money, delaying the hiring of an additional 1,000 employees and impeding the creation of some 500 construction jobs, he said.

"They are between a rock and a hard spot, OK?" Krajewski said.

He and tribal leaders have blamed Republican lawmakers, who sued over the gambling compacts negotiated by Democratic Gov. Jim Doyle.

The GOP lawsuit faults the process used to make the gambling deals because the Legislature was left out.

A second lawsuit brought by owners of Dairyland Greyhound Park in Kenosha and also under review by the state Supreme Court claims a 1993 amendment to the state constitution bans any gambling expansions.

Assembly Speaker John Gard (R-Peshtigo) said the issue of a major gambling expansion is more important than a temporary revenue loss for the tribes.

"There are so many new things in the permanent gambling compacts that the governor and the tribes negotiated secretly that it is important for the Supreme Court to determine whether or not they are constitutional," Gard said.

If the Supreme Court rules in favor of the tribes and Doyle, "life goes on," Gard said.

If not, Gard said he hopes that the tribes will renegotiate less expansive gambling compacts.

Old deals limit the number of slot machines the Potawatomi could have and allowed only slots and blackjack.

The new compacts permit craps, roulette and most other casino games.

Krajewski said that if the Supreme Court rules that the compacts are unconstitutional, the tribes will likely sue in federal court.

The new state budget relies on $40 million that the Potawatomi will owe June 30, as well as an additional $67 million from the other 10 Wisconsin tribes with similar pacts.

Gard said that if the court rules against the tribes and Doyle, lawmakers will find "an appropriate remedy" to keep the state budget in balance.

He did not suggest a replacement revenue source but said he expected tribes to be eager to revise their gambling deals if they lose in the Supreme Court.

Krajewski said one development plan under consideration by the tribe calls for expanding the current footprint of the Potawatomi Bingo Casino building east into an area that is now surface parking and adding a multistory hotel tower to the new portion.

City development officials said no casino expansion plans had been submitted for review.

An additional 200 slot machines will be added to the casino in a few days in an area that has housed bingo.

Two roulette wheels and two craps tables were added earlier this summer.

Stockbridge-Munsee tribal chairman Robert Chicks said the lawsuits were putting a crimp in expansion plans for most state tribes.

The suits create uncertainty and hamper tribes' ability to borrow money for expansions, he said.

"Whoever is doing the financing might consider that a big factor," Chicks said of the lawsuits.

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