Governor, tribes near deal on state casino

04/22/2005

Patricia Lopez and Pat Doyle, Star Tribune
April 23, 2005

A deal that would put slots at Canterbury Park racetrack and also locate a smaller state-tribal casino on Canterbury land has not been finalized by Gov. Tim Pawlenty and the northern tribes, but is headed for a fast track in the House nevertheless.

Rep. Andy Westerberg, R-Blaine, who heads the House Gaming Division, will introduce the bill in the House jobs committee tonight, where he expects it to pass.

The bill would grant 2,000 video slot machines to Canterbury, turning the Shakopee racetrack into a “racino.” As part of the deal, Canterbury would offer one of three 20- to 25-acre parcels for a state-tribal casino that would also have 2,000 slots, Westerberg said.

Dan McElroy, Pawlenty’s chief of staff and lead negotiator on gambling, said a joint casino proposal “is being discussed,” but that no final agreement has been reached.

But legislative deadlines dictate that finance bills must clear at least one committee by today, so Westerberg said he will proceed with his bill. “I know it’s not a finished product, but I think we’re close,” he said. “We’re trying to keep all the options open.”

Canterbury President Randy Sampson said today that “we’ve agreed to the concept of a merged proposal but we haven’t agreed to any specific numbers.” The plan was to go ahead with the committee hearing, he said, “even though it is fair to say there is no final agreement between us and the tribes.”

Officials of the Red Lake band, one of three northern bands that have agreed to partner with the state on a new metro-area casino, will meet Monday morning to discuss the deal. The White Earth band, Sampson said, “has generally told the governor’s office they are on board.” At this point, he said, “it could be three tribes, it could be one, it could be two.”

Westerberg said he believes that the White Earth and Red Lake tribes have agreed to the deal. He was unsure about Leech Lake, which earlier had said it would not partner with Canterbury Park. Officials for the three tribes could not immediately be reached for comment.

The new deal would offer scaled-down versions of what the tribes and the racetrack had wanted. Initially, the three northern tribes had sought permission for a 4,000-slot casino that would be part of a large entertainment complex. Canterbury officials had pushed for 3,000 slots.

Westerberg said that because the total number of slots would remain at 4,000, the return to the state should be roughly the same, perhaps even a little better than the $164 million originally projected for the state. That, he said, is because of the “clustering effect” of having two adjacent casinos. Shakopee would become a gambling destination, he said, generating greater foot traffic and higher revenues.

The tribes’ net share was to have been roughly the same as the state’s, under the original agreement, but would drop significantly under this proposal because they would have only half as many slots as they had proposed. Under the governor’s original proposal, the tribes bear the financial responsibility for casino operations.

Under Westerberg’s bill, neither the tribes nor Canterbury would have to pay the full $200 million casino licensing fee that Pawlenty had stipulated. Instead, each will pay $100 million upfront and another $50 million when the casinos open.

Sampson said that his last discussion with McElroy and the tribes had centered around total licensing fees of $150 million each. That figure, he said, was “probably” acceptable to Canterbury. He said a total of 4,000 slots between the two casinos also was acceptable to Canterbury. Sampson said his understanding was that the deal would include two casinos either on Canterbury property or possibly adjacent to it. A 160-acre farm is for sale near the racetrack and has been under discussion as a possible site for the state-tribal casino.

House Speaker Steve Sviggum, R-Kenyon, said he intended to guide the bill through the jobs committee, then Ways and Means and then to a floor vote as soon as possible.

“I like it,” he said of the merged proposal. “It’s a marriage between two very competitive, very fair ideas.”

Both Sviggum and Westerberg said that keeping the two casinos at Canterbury improved its chances among House members, some of whom have been reluctant to endorse expanded gambling at an unknown site in the metro area.

By keeping it in Shakopee, Westerberg said, “we have a willing community, which is very important for the governor, and we’re not expanding gaming beyond a site that already has it.” Canterbury has a card club in addition to horseracing.