Gov. Jim Doyle and the Forest County Potawatomi signed a new 25-year deal Tuesday allowing the tribe to operate its casinos in Milwaukee and Carter in exchange for an estimated $750 million over the life of the compact.
The two sides reached the new deal after the state Supreme Court ruled last year the compact they approved in 2003 was invalid because it did not have an expiration date and expanded the scope of games the tribe could offer beyond blackjack and slot machines to include games like craps, roulette and poker.
While the new deal establishes an expiration date, it does not address what games the tribe can offer.
Assembly Speaker John Gard, who filed the lawsuit that led to the Supreme Court tossing out the old deal, said he still was not satisfied. He complained the tribe was not paying enough considering its monopoly on casino gambling in the state's most populated area and noted that tribes have offered other states as much as 25 percent of their net revenue.
The maximum the Potawatomi will pay is 8 percent.
"I'm ultimately disappointed that once again there is a bad deal for the taxpayers of the state of Wisconsin," said Gard, R-Peshtigo.
But Administration Secretary Steve Bablitch, Doyle's top aide, said the deal helps put Wisconsin among the top states in the country in terms of revenue from American Indian gaming. He said no American Indian casino currently is paying a state 25 percent of its revenue and circumstances for those tribes making the offers are unique. For example, they are pushing for off-reservation casinos; the Potawatomi casinos are on tribal land.
"How can anybody argue with a contract that calls for the Potawatomi to pay to the state of Wisconsin an amount of money that is two to three times the corporate tax rate?" Bablitch said.
The deal was the latest twist in an ongoing dispute between Republicans who control the Legislature and Doyle, a Democrat, over Indian gaming. Gard and other Republicans have fumed that Doyle signed deals they believed were a significant expansion of gaming in Wisconsin shortly after several tribes pitched in hundreds of thousands of dollars for his 2002 campaign.
Doyle has dismissed those concerns and said the deals represent a significant increase in gaming revenue for Wisconsin to help pay for schools, health care and other services.
Gard and former Senate Majority Leader Mary Panzer, R-West Bend, sued Doyle after he signed the 2003 compact with the Potawatomi. The Wisconsin Supreme Court ultimately ruled Doyle exceeded his authority by agreeing to compacts that permanently removed Indian gaming from legislative review because the deals had no expiration date. It ruled the new games violated the Wisconsin Constitution, and it found Doyle exceeded his authority in waiving the state's sovereign immunity as part of the deals. That provision allowed the state and tribes to go to court to resolve disputes over the compacts.
Bablitch said the new deal was tailored to address those concerns, though Gard said he did not believe it went far enough.
Bablitch said the compact does not address what games the tribe can offer because the Supreme Court is expected to rule sometime on a separate lawsuit that seeks to overturn Indian gaming altogether in Wisconsin, arguing a 1993 amendment to the state constitution prohibits it. As part of that suit, the state has asked the court to reverse its previous ruling that games like craps and roulette are prohibited.
The tribe also argues what games are allowable is a matter of federal law and could go to federal court should the state court rule they are not allowed.
The Potawatomi paid the state $40.5 million in the first year of its old compact before the court decision. It then withheld $43.6 million that it had agreed to pay in the second year of the deal after the court nullified the compact.
The tribe said Tuesday it will now make that payment before a payment schedule kicks in requiring it to pay between 6 percent and 8 percent of its revenue each year. The payments are expected to average about $30 million a year.
Gard said he was also unhappy that the state and tribe agreed under the new compact to go to arbitration if a proposed Kenosha casino were approved. The arbitrator could decide to reduce the Potawatomi's payments to the state based on such a casino's impact on the Milwaukee facility.
Forest County Potawatomi Attorney General Jeff Crawford said the provision was key for the tribe to agree to the new deal even though it now has an expiration date. The tribes have argued the old five-year compacts made it impossible to get long-term financing for projects and longer deals were key to their development.
The Potawatomi now have plans for a $20 million expansion of the Carter facility and a $240 million expansion in Milwaukee \u2014 depending on what happens in the suit now before the Wisconsin Supreme Court.
"We obviously had to give up the indefinite term, but there are other provisions in the compact that we did get that balanced things out," Crawford said.
There are 11 tribes in Wisconsin that run casinos under agreements with the state. Of those, five had deals similar to the Potawatomi compact that was struck down by the Supreme Court that need to be renegotiated. The Ho Chunk tribe has been unable to reach a new deal with the state and has gone to arbitration. The others have deals in place, according to the Administration Department.