A winning gamble? State expands compacts with tribes

Wisconsin State Roundup

Published July 1, 2003  | July 2003 issue

Depending on how you view gambling, Wisconsin either hit the jackpot or got taken to the cleaners when it renegotiated the gambling compacts with the 11 tribes that have state casino operations.

The new compacts allow tribes to add roulette, craps, poker and almost any other table game; previously, they were limited to blackjack, slots and video poker. The old compacts ran for five years; the new ones have no expiration date, though regulatory reviews can occur every five years, and comprehensive reviews every 25 years.

The upside for the state is that tribes agreed to significantly up their contributions to the state. When newly elected Gov. Jim Doyle, a Democrat, announced his intent to renegotiate the compacts early this year, his proposed state budget counted $286 million from tribes to help the state close a $3 billion deficit. Before the new compacts, the state was receiving $49 million.

Then in late April, the governor's office announced that additional compact revenues would be about one-third less—some $75 million—over the upcoming biennium. The reason is the new tax rates paid by tribes—ranging between 3 percent and 5 percent for low-revenue tribes and 5 percent to 8 percent for high-revenue tribes—were set lower than originally proposed. Projected tax revenue from the new compacts also assumes an annual growth rate in casino revenue of 10 percent.

Still, under the new compacts, the state ranks second in gaming-related tax revenue, behind only Connecticut.

As of May, nine of the state's 11 tribes had agreed to new gambling compacts, including the three largest: the Forest County Potawatomi, the Ho-Chunk Nation and the Oneida tribe. The final two were still being negotiated but weren't expected to substantially change projected tribal payments.

Republicans, who control both houses of the state Legislature, made several attempts to stop the deals, including two bills that Doyle subsequently vetoed that would have given the Legislature authority over the compacts. They have also filed suit to have the compacts thrown out, saying that a 1993 law limiting the expansion of gambling supercedes the expanded compacts. Doyle also vetoed a measure that would legalize video gambling in taverns.

Ronald A. Wirtz