Milwaukee Journal Sentinel, The: Arbitration likely for tribal casino pacts; Without agreement by

Madison The state is preparing to call in arbitrators over its casino negotiations with Wisconsin's two highest-grossing tribes.

Administration Secretary Marc Marotta said if the state has not reached new compacts with the Forest County Potawatomi and the Ho- Chunk Nation by June 30, he would likely ask an arbitrator to settle the matter. June 30 marks the end of the state's fiscal year.

Those compacts were thrown into disarray last year when the state Supreme Court ruled Gov. Jim Doyle overstepped his authority by signing the Potawatomi agreement because it had no set expiration date and allowed new games, such as craps and roulette. The state and tribes have been negotiating new deals ever since.

Marotta is pushing the Potawatomi to make a $43.6 million payment due June 30, even if the state and tribe haven't reached a deal by that date. The tribe made its $40.5 million payment last year as a sign that it was engaging in negotiations in good faith.

Most other tribes followed suit, but the Ho-Chunk declined to make their $30 million payment last year and likely will hold back their payment again this June, Marotta said. Ho-Chunk officials did not return calls for comment but previously have said they are not willing to make the payments until they reach a new deal with the state.

Marotta said the end of the fiscal year marks a good time to bring in arbitrators.

"I don't know honestly if we're going to be able to reach an agreement . . . If we can't get these resolved, then we have to turn it over to a third party," he said.

An arbitrator could approve either the state or the tribe's offer, or come up with a compromise compact.

Marotta said he remains hopeful the Potawatomi will pay money owed this month under the earlier deal.

"Last year, (the payment) didn't get made till the last two days, and this year it may again, unfortunately," Marotta said.

Potawatomi Attorney General Jeff Crawford said the tribe has not decided if it will make its payment. He acknowledged arbitration remains a possibility but said the tribe hopes to avoid it.

"We prefer to get a compact amendment done," he said.

While negotiations have been reopened with all the tribes, the state has focused its attention on the Potawatomi and, to a lesser extent, the Ho-Chunk.

The Potawatomi's casino in Milwaukee's Menomonee Valley took in about $260 million last year, making it the most lucrative one in the state. The Ho-Chunk produces the second-highest amount of revenue.

Complicating the talks with the Potawatomi is a pending state Supreme Court decision on gambling. Dairyland Greyhound Park in Kenosha is arguing before the high court that all casino gambling is unconstitutional because of a 1993 amendment to the state constitution. That case could be decided later this year.

The struggling dog park has also struck a deal with the Menominee tribe to sell its I-94 real estate to the tribe if it lands state and federal approval to build an $808 million casino on the site. Potawatomi officials say that casino would cut off its stream of Chicago-area customers.

In its compact talks, the Potawatomi want the state to indemnify them from any lost revenue if the Kenosha casino should be built. Under that scenario, the tribe would pay less to the state if it could show it lost money because of the Kenosha operation.

"We are open to that idea and the question is, Can we get there?' " Marotta said of indemnification.

If the Potawatomi made a smaller payment, the Menominee might have to pay more, Marotta said.

"We would not do any of this unless it's a significant net gain for the state," he said, adding that Doyle would not make a decision on whether to approve the Kenosha casino until federal authorities had given it a green light.

Evan Zeppos, a spokesman for the Menominee, said indemnification would make it difficult to secure financing for a Kenosha casino.

"Indemnification could very well be the dagger in the heart to Kenosha. . . . If another automaker moved into Wisconsin, would (Marotta) provide indemnification for GM?" he said.

The Potawatomi have put a $240 million expansion on hold while they wait out the Dairyland case.

The Potawatomi also are mulling the possibility of moving their casino to downtown Milwaukee, which would require state and federal approval.

Republicans gave mixed reviews to Marotta's talk of arbitration.

Rep. Dean Kaufert (R-Neenah), co-chairman of the Legislature's Joint Finance Committee, agreed the time for arbitration is nearing with the Ho-Chunk.

"I think at some point there's got to be a deadline, and arbitration is right around the corner," he said. "If the administration won't play that card, the Legislature might have to."

But Assembly Speaker John Gard (R-Peshtigo) said Marotta should take bolder steps, particularly against the Ho-Chunk.

"If you're a taxpayer in Wisconsin and have a liability (when taxes are due) on April 15 and you don't pay it, they're not taking you to arbitration and asking you how you feel about it," he said. "They're taking you to jail."

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