Despite what some people may think about casino gambling, the bottom line is that both the state of Wisconsin and its Indian tribes have a huge financial stake in the continued operation and success of those casinos. Yes, the tribes turn a handsome profit from the casinos, but they share their earnings with the state and, of course, its taxpayers.

So it was simply good business sense for Gov. Jim Doyle and the Forest County Potawatomi tribe, who operate the most lucrative casino in the state, to reach a new agreement, which was announced Tuesday.

Although the new compact was immediately criticized by Assembly Speaker John Gard (R-Peshtigo), no one, not even Gard, can dispute that the state will get a lot in return, although clearly not as much as Gard thinks it should. The Potawatomi estimate that the tribe will pay the state $750 million over the life of the agreement for its Milwaukee casino. The state will get the first installment, about $43.6 million, this year.

Indian casinos also provide thousands of jobs in Wisconsin the Potawatomi alone employ about 2,000 people at the casino in Milwaukee's Menomonee Valley and play an increasing role in state tourism.

Unlike an earlier agreement hammered out between the Doyle administration and the Potawatomi, this compact runs for only 25 years, rather than perpetuity. After 25 years, the agreement would be renegotiated at the request of either side. The indefinite nature of the 2003 agreement had proved quite legitimately to be one of the fatal flaws of that compact. The state Supreme Court threw out the agreement last year, ruling that Doyle exceeded his authority in agreeing to the perpetual compact and by allowing the Potawatomi to expand the games offered in the casino to include roulette, poker and craps.

Despite the ruling, the Potawatomi continue to operate those games, arguing that the approval of the 2003 agreement by federal officials superseded the state high court's ruling that roulette, craps and poker violate a 1993 constitutional ban on those games. That matter may eventually need to be settled in federal court.

The new agreement also corrects another flaw in the 2003 compact that was cited by the state high court: the state's waiver of sovereign immunity. The new deal properly removed that waiver.

Gard says the state still got the raw end of this deal because it will not get enough money from the tribe. That's open to debate.

A report on the gambling industry by Los Angeles-based economist Alan Meister found that, in dollars, Wisconsin's share of casino revenue ranked fourth among the 16 states with tribal gambling. Meister told Journal Sentinel reporter Steve Schultze that the 6% to 8% of the tribe's gross casino revenue that it will pay to the state puts Wisconsin somewhere in the middle of tribal casino payment rates to states.

By comparison, Potawatomi officials note that Wisconsin corporations pay the state 7.9% of their net revenue in corporate income taxes which, in fairness, is a strong point in the tribe's favor.

Gard says the state still could have done better, based on proposals by other Wisconsin tribes to pay as much as 25% of their revenue for off-reservation casinos in other states. But state and Potawatomi officials dispute Gard's statement and point out that the casinos in one of the states Gard is referring to, Connecticut, draw on a much larger and thus potentially vastly more profitable market.

In short, this is not at all a bad deal for the state.

Copyright 2005, Journal Sentinel Inc. All rights reserved. (Note: This notice does not apply to those news items already copyrighted and received through wire services or other media.)

Copyright 2005 Journal Sentinel Inc. Note: This notice does not apply to those news items already copyrighted and received through wire services or other media
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