Skeptical justices search for answers in tribal gaming cases

By STEVE SCHULTZE sschultze@journalsentinel.com, Journal Sentinel

Wednesday, January 28, 2004

Madison -- Sounding a bit peeved after lengthy legal arguments Tuesday over Wisconsin's casino rules, state Supreme Court Justice Jon Wilcox called for a straight answer to what he called a "plain language" question:

"If Wisconsin wanted to eliminate Indian gambling, could we do it?" he asked the attorney representing Gov. Jim Doyle in a pair of lawsuits seeking to overturn the lucrative new tribal-state gambling compacts Doyle approved last year.

The answer from Assistant Attorney General John Greene was maybe. Through legislation or referendum, Wisconsin might be able to turn back the clock, but only if all types of gambling were banned, Greene said.

The state gets $200 million over two years in casino payments under the compacts, which lift most restrictions on games and hours.

Wilcox's question grew from a thorny central issue in the cases before the court: What impact did a 1993 amendment restricting gambling have on the Indian casino deals? A lot, according to the state lawmakers and dog track owner that brought the lawsuits. Almost nothing, according to attorneys defending Doyle.

Wisconsin may be the only state in the United States that adopted a state amendment limiting gambling after it approved the first Indian casino compacts in 1991 and '92, Greene said during oral arguments before the high court on two cases that challenge the tribes' gambling authority.

That complex dynamic dominated the three hours of discussion before the court in Madison on Tuesday, an unusually long time to be allotted. The Supreme Court agreed to be the first court to hear the case -- also highly unusual -- because of its importance.

A decision is expected before summer.

About $100 million in payments from the tribes are due to the state on June 30 -- payments that could be in jeopardy if the court invalidates the compacts.

In one case, the court is being asked to play referee between the Republican-controlled Legislature and Doyle, a Democrat. The court must determine whether the governor overstepped his authority in revisions to rules governing the state's 17 casinos.

Filed by Senate Majority Leader Mary Panzer (R-West Bend) and Assembly Speaker John Gard (R-Peshtigo), that lawsuit charges that Doyle exceeded his powers by shutting the Legislature out of the process.

The casino deals were so far-reaching as to essentially constitute broad new policy, not just revisions of old compacts, said Gordon Baldwin, a retired University of Wisconsin Law School professor arguing the case for Panzer and Gard.

Greene said they were simply amendments to gambling compacts originally negotiated by former Gov. Tommy G. Thompson, a Republican, in the early 1990s and modified later that decade.

Panzer and Gard are not challenging the earlier gambling deals by Thompson, Baldwin said, under questioning from Chief Justice Shirley Abrahamson.

"I don't want to attack anything Governor Thompson has done, although I think it is attackable," Baldwin said.

"Gov. Doyle here has written a blank check" with the new gambling deals, he said.

The public never got a chance to speak out on what's become a gambling monopoly for the tribes, said Stephen Morgan, another attorney representing Panzer and Gard.

Morgan also held open the possibility that the Legislature together with Doyle -- or perhaps even by itself -- might have the power to negotiate such broad casino deals.

Lawmakers, however, handed Thompson and his successors as governor sole authority to negotiate compacts in 1991.

By seeking to attack Doyle's power to negotiate casino deals but not Thompson's or the Legislature's, the Panzer and Gard suit tries to walk a delicate middle ground, Abrahamson said.

"You know what happens to a person who takes a middle position -- they get hit from both sides," she said.

Other arguments

In a second case, the Alabama owners of Kenosha's Dairyland Greyhound Park claim that the 1993 constitutional amendment limiting gambling invalidates the tribal casino deals.

At risk are some 35,000 casino-related jobs and $200 million in payments the tribes have pledged to the state, tribal officials say. The money was an important link in balancing the 2003-'05 state budget and a key component of Doyle's new gambling deals.

Dairyland attorney Ronald Ragatz said the 1993 amendment with its specific mention of outlawing poker, roulette, craps and other casino games means the tribal casino compacts should be voided.

The hook that got Indian casinos in the state was a 1991 federal court case that said when Wisconsin voters legalized lotteries in the 1980s, they opened the door to tribal casinos offering any game that involved prizes, chance and money to play.

No state law ever expressly authorized casinos, and the '93 amendment made it clear that such gambling was unconstitutional, Ragatz said.

Greene, the attorney for Doyle, said the 1993 amendment didn't apply to tribal casinos because they were authorized under compacts that preceded the ban. The compacts have the force of federal law, he said.

In addition, the intent of the amendment when the Legislature agreed to hold a referendum on it was never to outlaw tribal casinos, Greene said.

Ragatz said he would have to analyze the impact of whether a ruling invalidating the new compacts would have the effect of shutting down casinos or reverting to older rules on casinos. The Dairyland case was not intended "to eviscerate" the compacts, he said.

Pressed by Abrahamson, Ragatz said that Thompson probably did not have the authority to revise gambling deals in the late 1990s.

Those compacts limited gambling to slot machines and blackjack and put restrictions on the number of slot machines at some casinos, most notably the Potawatomi Bingo Casino in Milwaukee, which was then limited to 200 slots.

The Potawatomi tribe built its current $120 million building after its 1998 casino pact permitted an expansion to 1,000 slot machines.

Greene said if all revisions since that time were struck down, the casinos would likely be able to operate under provisions of the initial gambling deals of the early 1990s.

If that happened, it raises the specter of whether the Potawatomi casino would be forced to scale back to 200 slot machines.

Another $120 million expansion at the Potawatomi casino, made possible by Doyle's deal last year, is on hold until the gambling lawsuits are resolved, said Potawatomi tribal attorney Jeff Crawford.

He said it was ironic that Dairyland sought to strike down tribal casinos while at the same time reaching agreement with the Menominee tribe to purchase the ailing Kenosha dog track as a potential off- reservation casino site.

"This is a classic example of the (suing) parties wanting to have their cake and eat it too," Crawford said.

He also found irony in the Republican legislators' challenge to the new gambling deals, while at the same time approving a new state budget that relies on $200 million in tribal gambling payments.

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