New casino bill doubles up

04/24/2005

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


A House committee Friday approved a deal that would authorize two casinos at the Canterbury Park racetrack, one owned by the track and another by Indian bands, and send hundreds of millions of dollars to a state looking for ways to plug a budget hole.

The deal would allow 2,000 slot machines in each casino at the Shakopee track, and amounts to a merger of earlier proposals calling for a racino at Canterbury and a state-tribal casino at an undisclosed Twin Cities location. Those measures failed to generate much support in the Senate and House.

The new deal calls for Canterbury and a tribal consortium to each pay the state $150 million in licensing and other fees in the early stages of the venture. That’s $50 million less than the bands would have paid under the earlier proposals and $50 million more than Canterbury would have paid. The new bill also limits a gambler’s losses to $500 a day per casino, a move that Canterbury Park President Randy Sampson said may cut significantly into profits.

The latest proposal emerged Friday afternoon with little advance notice in the House Jobs and Economic Opportunity Policy and Finance Committee.

The bill passed 7 to 5, with Republicans voting for it and DFLers against.

The committee’s DFL members complained that the bill was being rushed and getting little scrutiny, but Republican backers of the proposal said legislative deadlines dictated that finance bills pass at least one committee by Friday.

The short notice caught some supporters unprepared to field questions about the proposal. Asked by legislators if Canterbury could afford to build its casino plus pay the initial state fees, Sampson replied, “This is coming together quickly so we have not had an opportunity to digest and work out the numbers.”

‘No deal’

It was even more unclear how many Indian bands would be willing to participate in the deal. While the White Earth, Red Lake and Leech Lake bands joined the state in the earlier tribal-state casino proposal, they appear less enthusiastic about a deal involving Canterbury.

White Earth tribal leader Erma Vizenor has said repeatedly that her band is willing to consider a casino deal with the track.

But Leech Lake Tribal Chairman George Goggleye Jr. on Friday reiterated his announcement earlier in the week that he and his tribal council oppose such a plan.

“We’re still not going to do any deals with anybody other than the state,” Goggleye said. “There’s no deal with Canterbury.”

The Red Lake band has scheduled a tribal council meeting for Monday to discuss whether it’s willing to participate in a deal.

Tribal Secretary Judy Roy and Treasurer Darrell Seki Sr. said Friday that they couldn’t predict the outcome of the meeting. “All I know is some of our council members don’t support it,” Seki said.

Gov. Tim Pawlenty proposed a tribal-state casino in the Twin Cities to provide poor and populous northern Minnesota bands with a bigger chunk of casino revenues, as well to give the state a new source of revenue.

Dan McElroy, the governor’s chief of staff, said he spoke with two Leech Lake officials this week and they said they hadn’t ruled out participating in a deal with Canterbury. He said it was likely that at least two of the three bands would participate.

Unlike committee hearings held on the earlier casino proposals, there were few supporters or opponents on hand for the meeting Friday night. McElroy said representatives of the three bands had other commitments.

“I know it’s not a finished product, but I think we’re close,” said Rep. Andy Westerberg, R-Blaine, a sponsor. “We’re trying to keep all the options open.”

Said Canterbury’s Sampson: “We’ve agreed to the concept of a merged proposal, but we haven’t agreed to any specific numbers.” He conceded that “there is no final agreement between us and the tribes.”

Pros and cons

Westerberg and McElroy said that the 4,000 slot machines in the two casinos would return $164 million a year or more to the state after they were fully operating, a revenue stream in addition to the initial $150 million fees that each casino would pay in the first two years.

House Speaker Steve Sviggum, R-Kenyon, said he intended to guide the bill through the jobs committee, then the Ways and Means Committee 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.”

That route would sidestep a potentially more contentious hearing in the House Taxes Committee, where some Republicans opposed either a racino or a state-tribal casino.

DFL opponents said Friday that state-sponsored casino gambling was the wrong way to raise money and that it could trigger an even bigger expansion of gambling in the future.

Rep. Tony Sertich, DFL-Chisholm, accused Republicans of “ducking, bobbing and weaving” to move the bill through the committee.

Republicans on the committee defended the process and said the bill was a fair way to distribute casino money. Rep. Fran Bradley, R-Rochester, criticized opposition to a state-tribal casino when gambling is already widespread in the state.

The slot machines at the two casinos at the Shakopee track would rival those at Mystic Lake Casino in nearby Prior Lake, the state’s largest single casino, with 4,000 slot machines. Prairie Island’s Treasure Island at Red Wing is the next largest, with about 2,500.

Facing possible new competition for their Mystic Lake Casino, Shakopee Mdewakanton Sioux Community officials released a statement on Friday that said: “It is the epitome of disrespect for the governor to invite northern Ojibway tribal governments onto land that is not just in traditional Dakota territory but on land that is nearly adjacent to a historic Mdewakanton village site.”

They accused Pawlenty of provoking “conflict between tribal governments.”

Under the earlier proposals, the three northern bands had sought permission for a 4,000-slot casino as part of a large entertainment complex somewhere in the metro area. They would have paid the state a $200 million licensing fee. Canterbury officials had pushed for 3,000 slots and offered to pay a $100 million license fee.

Sampson said his understanding was that the new deal would include two casinos either on Canterbury property or possibly adjacent to it.

Westerberg said that the earlier tribal-state casino proposal is still alive and could always be considered as an alternative to the merged plan.

Both Sviggum and Westerberg said that concentrating two casinos at Canterbury improved the plan’s chances among House members, some of whom have been reluctant to endorse expanded gambling at an unspecified site in the Twin Cities area. Canterbury has a card club in addition to horse racing.

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.”