Bruce Murphy
Murphy’s Law

Casino Wars

The Potawatomi have spent millions to lobby against a Kenosha casino. Is Gov. Walker their latest ally?

By - Sep 4th, 2013 11:13 am
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Potawatomi Casino Hotel under construction.

Potawatomi Casino Hotel under construction.

For those who doubt the political shrewdness of Scott Walker, consider how the governor has handled the application of the Menominee Tribe to create a casino in Kenosha. The proposal had languished for years without getting federal approval and suddenly received it on August 20. Now it was up to the governor, and the governor only (the legislature has no say), to determine whether the casino should be approved.

The proposal is bitterly opposed by the Potawatomi Tribe, which runs the state’s biggest casino in Milwaukee’s Menomonee Valley, whose annual revenue in the most recent year reported was more than $380 million. And so Walker seemed to throw down an olive branch, declaring that he should not have “to play King Solomon” and “pick and choose between two well-respected entities here in the state of Wisconsin.” Instead he called on the 11 tribes in Wisconsin to reach an agreement among themselves and he would support that.

His decision sounded wonderfully idealistic and yet practical, and will likely play well across the state. But anyone close to the issue knew immediately that Walker was actually siding with the Potawatomi, because the tribe has done everything possible to kill the Kenosha casino and would prevent any unanimous decision by the tribes. For that matter, the Ho-Chunk Nation (which would like to build a casino in Beloit) is also opposed, though they might consider some kind of partnership with the Menominee. Finally, Walker added another condition: the Kenosha casino must result in “no new net gaming” in the state. Given that what’s proposed is an $800 million entertainment center at the old Dairyland Greyhound Park, there’s no way it would result in no additional gaming in Wisconsin.

Menominee Chairman Craig Corn reacted by accusing Walker of protecting the Potawatomi casino, whose officials have said they would lose as much as $150 million in annual revenue from a competing casino in Kenosha. “If he’s going to give veto power to the Forest County Potawatomi, then make sure he says that to all the Menominee people and the people in Kenosha, Racine and surrounding communities,” Corn declared.

Why would Walker side with the Potawatomi? Some political observers point to the political clout of the Potawatomi, whose casino earnings have enabled it give generously to politicians, including at least $1 million to the liberal Greater Wisconsin Committee in its efforts to help re-elect Jim Doyle as governor in 2006 and some $450,000 to help Doyle and other Democrats in 2002, as the Milwaukee Journal Sentinel has reported.

The Potawatomi has also helped Walker, notably as a major sponsor of the National Governors Association’s annual meeting in Milwaukee. Neither Walker nor the Potawatomi have disclosed how much they contributed. Walker would undoubtedly love to gain the tribe’s support for his reelection effort in 2014. “In a political environment in which some tribal governments remain marginalized,” Kevin K. Washburn, Assistant Secretary of Indian Affairs for the federal Department of Interior, has observed, “it is heartwarming to see that the Forest County Potawatomi have developed such strong influence in state and local politics in Wisconsin.”

The Potawatomi have also flexed plenty of political muscle in Washington D.C.: since 2001 the tribe has spent $1.3 million on contributions to federal politicians and $6.1 million on lobbying Congress, according to opensecrets.org. Most of the lobbying paid for well-connected heavy breathers like the BRG group, led by longtime Republican Haley Barbour (who would be an important ally for any Republican, including Walker, hoping to run for president in 2016) and Quinn Gillespie & Associates. But the Potawatomi’s lobbying bill also paid for prominent law firms with expertise in Indian and gaming law, like the Rothstein Law Firm as well as Sonosky, Chambers, Sachse, Endreson & Perry, LLP. For a decade or so all these combined forces helped prevent the Menomonee application for a casino from being approved by the federal government.

Beyond the issue of political clout, which will probably kill the Kenosha casino proposal yet again, what would be the best policy decision here? I’ve never been a big fan of legalized gambling: it seems a poor way to build an economy, it preys more on low-income people and leads to an increase in compulsive gamblers. But gaming is by now so established in Wisconsin and other states that these arguments seem quaint and antiquated, and were certainly not advanced by Walker.

From the perspective of Milwaukee, the Kenosha casino would be a loss, but precisely how much is open to question. The Potawatomi claim they will lose about one-third of their casino’s annual take. But Washburn predicted the Kenosha casino would have a “modest impact” on the Milwaukee casino, with “much of the revenue” coming from customers in northern Illinois. “We are confident that the Potawatomi will continue to thrive,” he added.

And Frank Fantini, chief executive officer of the Fantini Gaming Report told the Milwaukee Journal Sentinel the loss was likely to be considerably smaller than $150 million annually.

The City of Milwaukee opposes the casino and claims Milwaukee would lose 3,000 jobs as a result, but if the impact on the Potawatomi is modest, as Washburn claims, will the number really be that high?

From the perspective of what’s best for the tribes, it’s hard not to be sympathetic to the Menominee proposal. For all of the social ills it causes, gambling has transformed tribes in Wisconsin that were once so poor. And no tribe is more destitute than the Menominee, largely due to misguided federal policies of the past.

In 1954, Congress passed a termination law, which singled out a small number of Indian tribes to have their status as sovereign nations removed. That included the Menominee. Prior to its termination as a tribe, the Menominee ran a successful sawmill business that made it self-sufficient: it provided its own law enforcement, telephone services, electricity, health care (including a hospital and clinic) and schools, all of this primarily funded by its sawmill business, which also helped fund fire protection and old age pension programs.

UW-Madison law prof Stephen J Herzberg, an expert on this issue, has argued that the Menominee’s success contributed to its being chosen for termination. This law brought “immediate, rapid decline” for the Menominee, Herzberg has written: the tribe was forced to close its hospital and other health care services, its three electric power plants and educational services. Its logging business gradually declined because it now had to pay county and state taxes. Unemployment soared, and many went on welfare.

In later years, Congress recognized the problems caused by termination, and the Menominee’s tribal status was restored in 1973, but as Washburne noted, the tribe “has never fully recovered from the devastating effects of Federal Termination.” Today, Menominee County, where 90 percent of residents are members of the tribe, is far and away the poorest in the state. The unemployment rate in 2012 was 22 percent, more than double that of the county with the second highest level. Menominee County ranked the worst in the state for health care indicators, with the highest rate of tobacco use, binge drinking, teen births and premature deaths.

The Menominee did open a small casino in Keshena in 1992, but it mostly serves customers in Menominee County and nearby, and doesn’t earn much revenue. The proposed Kenosha casino would be located 162 miles from the Menominee Tribe’s reservation headquarters, but the Potawatomi Casino is located 200 miles from its reservation in Forest County.

The very success of the Potawatomi, Washburne wrote, provides “a strong argument for approving the Menominee proposal and creating similar opportunities for an even larger tribe… As the Federal trustee for the Indian nations, our hearts would sing to see more than 8,700 Menominee Indians follow in the successful footsteps of 1,400 Potawatomi.”

Categories: Murphy's Law

28 thoughts on “Murphy’s Law: Casino Wars”

  1. dty says:

    Not that it’s relevant to the issues, but it is the Menominee tribe. Check your spelling.

  2. Bruce Murphy says:

    Thanks, we corrected the spelling

  3. dohnal(Wis. Conservtive Digest says:

    I have always been opposed to gambling in the state, but it is here so we might as wel okay the one in Kenosha. It will create new jobs cause it is so close to the North Shore of Chicago Interesting to see Bruce so interested in a venue that will fleece the poor and senior citizens. Gambling is a fools game.

  4. Todd Spangler says:

    I think your argument is well reasoned, and you make the case for the proposed casino in Kenosha very well. I think it would likely be a plus overall it it were built.

  5. Mike Bark says:

    dohnal,

    How is gambling any different than going out to see a bad movie or spending money on watching the Brewers play absolutely meaningless games this year? For that matter, how is it that much different than any form of discretionary entertainment.

    No doubt there are people who develop problems with gambling, but people develop problems with alcohol. Do you want to ban that?

    Usually conservatives talk about having some personal responsibility.

  6. Dohnal(Wis. Conservtive Digest says:

    Mike, that logic is so funny not even worth commenting.

  7. Mike Bark says:

    dohnal,

    It’s likely because you can’t form an intelligent response to it. Take a look at alcohol. In moderation, it’s really no big deal, but there are a lot of people who abuse it and sometimes in their abuse of it bring harm to others. Gambling, in moderation, is not a problem for the vast majority of us. So, how exactly are the two different?

  8. Andy says:

    Mike,

    I am a fan of personal responsibility and support the idea of a Casino in Kenosha. However, playing devils advocate, I’d respond to say that there are laws to curb abuse of alchohol and controlling it’s affect on others (legal driving limits for example?). There are no laws to control gambling, and having people who live on any kind of subsidized welfare would mean it is indeed costing us all for their gambling issues.

    In response to your first argument, I have yet to see a support group for movie or Brewers adicts. As far as I know, you can only spend enough at the movies to see a few shows a day… with Gambling you can waste that dollar amount in a matter of minutes or less. Plus I believe ones expectations on return on your investment are much easier for the average person to comprehend when it comes to movies vs gambling.

    Again, just playing devils advocate.

  9. Kyle says:

    Mike – I would also point out that while conservatives like to talk about personal responsibility, they consider allowing the casino project to be a libertarian position. Conservatives also tend to be concerned with using the law to define morality (see: social conservatism), and view gambling as a sin to be prevented.

  10. dohnal(Wis. Conservtive Digest says:

    My religion, Catholic believed gambling to be sin as it took money away from families as it i losing proposition as are other vices.

  11. Stan says:

    Doesn’t every Catholic parish run bingo, which is a legalized form of gambling?

  12. STACY MOSS says:

    What ever happened to the idea of free enterprise? Isn’t a little competition supposed to make things better?

  13. Kyle says:

    Stacy, you seem to be confusing things again. It’s always been “family values” before “free enterprise”. You need to the Ron/Rand Paul camp or the libertarians to get “free enterprise” to trump all.

    Stan, I never understood that either. The only way I can justify it in my mind is that all the money spent playing bingo in a church is really a donation to the church, which is then distributed to help those in need (some of whom are in need because they called bingo). It’s the same way I try to think about the high-stakes charity raffles that go on as well.

  14. Mike Bark says:

    Bingo Stan. I’m a Catholic as well and not only do we have Bingo, but there’s usually also gambling at the Parish Festivals and fund raisers.

    I just have a hard time wondering how a conservative person (and I’m a fiscal conservative) can be against additional competition simply because the Governor doesn’t want to tick off the Potowotomi.

  15. Kyle says:

    Mike, should a conservative person also support the creation of new jobs and additional competition that would come with new abortion clinics? (I’m not saying that abortion and gambling are on the same level, just pointing out that there is a line where morals can trump job creation, and if there is such a line, reasonable people can disagree on exactly where it lies.)

  16. Dohnal(Wis. Conservtive Digest says:

    Not relative to casinos, but how come this Global Warming catastrophe that the silly left has foisted on us has not produced one hurricane this year. That is what the Journal has covered up.

  17. Todd Spangler says:

    Dohnal, Agreed that the annual hurricane predictions issued by whatever agency/entity is doing so generally seem to have such poor accuracy that they have essentially no value, and are, in fact, an embarrassment. I find my viewpoint winding up being between the liberal and conservative camps on the whole global warming issue, being both more open minded than conservatives and more skeptical than liberals. I think the casino issue is ultimately less divisive and a few orders of magnitude easier to deal with than the global warming problem/controversy is, not that I would be willing to wager much money on the Kenosha casino actually being built.

  18. Tom D says:

    The Atlantic has seen 7 tropical storms so far this season, 2 of which came within 9 mph of being classified as hurricanes, so it’s not like nothing has happened. June through August has never been prime hurricane season (last year’s biggest storm, Sandy, didn’t hit until the end of October).

  19. Todd Spangler says:

    Tom, I understand what you’re saying, but I just saw this online:

    http://www.usatoday.com/story/weather/2013/09/07/quiet-hurricane-season/2776845/

    We could still have some hurricanes, as the peak, I believe, is around Labor Day, which we are obviously not very far past, but the results so far don’t inspire a lot of confidence that the forecast for this year is going to be anywhere close to accurate. I actually feel these forecasts tend to discredit the entire global warming thesis; although, admittedly the devastation unleased by just one storm last year (Sandy) provided an impactful preview of how bad things could eventually get if the predictions of global warming theorists do prove to be more or less correct as the decades pass in the 21st century.

  20. Dohnal(Wis. Conservtive Digest says:

    Ever read about Galveston? Katrina? Hurricane season is over 9/10.

  21. Todd Spangler says:

    The Galveston Hurricane hit September 8, 1900.
    The listing I have (2012 World Almanac) shows the dates for Katrina as August 25 – 29, 2005.

    My understanding is that the beginning of September or thereabouts (roughly Labor Day) is the “peak” time for hurricane activity, but obviously, hurricanes can occur at any point throughout the hurricane season. Admittedly, many notable hurricanes have hit throughout the entire month of September such as “Billion Dollar” Betsy September 7 – 12, 1965; Hurricane Hugo September 16 – 22, 1989; and Hurricane Rita September 21 – 24, 2005. I’m well aware that hurricanes can hit well through October, as well. Hurricane Mitch killed 10,000+ people in Central America October 27 – 29, 1998.

    I just don’t see much evidence of an active or very active hurricane season so far this year, and we are around what should be the peak point of the hurricane season.

  22. dohnal(Wis. Conservtive Digest says:

    You are talking when the hurricanes hit, I am talking about when they start and if they ain’t started by ow they aint going to start.

  23. Todd Spangler says:

    I think you’re going to have to tell me what we’re arguing about, as I have no idea.

  24. Dohnal(Wis. Conservtive Digest says:

    Bruce, is your hair tinted? Just wonder is all you lefties that read this column are now war mongers. My three kids have had to fight those wars, Iraq very stupid idea, and now it is someone elses turn. Bombing Syria could be as stupid as what happened in WWI.

  25. Tom D says:

    Todd Spangler (post 21): The best source I’ve found for recent (1998 and later) hurricane data is:
    http://www.nhc.noaa.gov/archive/2013/

    Comparing pre-Labor Day storms from one year to another is somewhat imprecise because Labor Day itself comes on different dates each year.

    While Dohnal (posts 20 and 22) believes we will escape 2013 with no Atlantic hurricanes, I’m not so sure. On Saturday Dohnal claimed (post 22) that any 2013 hurricane would have formed by now. The next day, an eighth tropical storm (“Humberto”) has formed. Humberto is now given a 70% chance of reaching hurricane strength by Thursday.

    http://www.nhc.noaa.gov/archive/2013/al09/al092013.wndprb.003.shtml?

  26. dohnal(Wis. Conservtive Digest says:

    Wasn’t my comparisons, took it off the weather programs. also today it was announced on numerous media places, Jay Weber that the Ice Cap was 60% bigger this year, keeping the Northwest passage, used by ships in the middle ages, shut. Many Cruises were cancelled and some boats trapped.
    You Leftists had forecast that the ice Cap would be completely gone by now along with Manhattan and half of Fla. What happened. Facts talk and BS walks.

  27. Todd Spangler says:

    A link below to Hour 2 Part 1 of Jay Weber’s show today where he rips Scott Walker and his spokesman in regard to the Governor’s position on the proposed casino.

    http://www.newstalk1130.com/media/podcast-the-jay-weber-show-thejaywebershow/jay-weber-hour-2-part-1-23683793/

  28. Brien Lee says:

    Competition in the casino business is always a good idea. It makes the odds better, the comps more generous, and encourages the casino to urge its staff to smile once in a while.

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