Potawatomi Tribe Will Withhold $250 Million in Payments to Wisconsin if Competing Tribe’s Plan Comes to Fruition

Posted on: November 28, 2018, 05:28h. 

Last updated on: November 28, 2018, 05:28h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

The Potawatomi tribe has agreed an amended compact with Wisconsin Governor Scott Walker, putting to bed a 15-year dispute over gambling expansion and revenue-share payments.

Potawatomi
Make it easy on yourself: Scott Walker’s negotiations with the Potawatomi tribe may have saved the state $250 million, which should soften the blow of his defeat in the gubernatorial elections earlier this month. (Image: Dominick Reuter/AFP/Getty)

Under the terms of the new agreement, the tribe will withhold $250 million in payments to the state if another tribe is one day permitted to build a casino in the region.

It will be the last deal Walker strikes as governor — earlier this month the right-wing Republican was defeated in his bid to win a third term by Democratic challenger Tony Evers.

But Walker’s swansong deal may have negotiated the state out of another $250 million in future liabilities.

15-Year Spat

The Forest County Potawatomi Community operates the Potawatomi Hotel & Casino in Milwaukee. For years, the tribe has been at loggerheads with the governor’s office over how much it could withhold in revenue-share payments if a new casino were to be established 30 to 50 miles away from its own.

In 2003, the tribe signed a compact with then-Governor Jim Doyle which was designed to prevent other tribes from operating casinos within 50 miles from its Milwaukee casino. The agreement made the state liable to pay compensation to the Potawatomi if this were to happen in the future.

But the Department of the Interior would only sign off on 30 miles and no further, leaving a question mark over the state’s liability between a 30 and 50-mile radius.

The question is important to the Potawatomi because for years the Menominee tribe has been pushing for the right to build a casino in Kenosha, just over 30 miles away.

$500 Million Liability Swerved

In 2014, the Obama administration approved the Menominee plan for an $800 million off-reservation casino, but the proposal was ultimately vetoed by Scott.

At the time, Scott was a Republican Party presidential nominee candidate and was anxious to avoid controversy. He said he had been working on a deal that would have potentially allowed a casino in both cities while protecting taxpayers.

But he was also anxious to avoid a possible $500 million hit to state coffers, which was the figure cited by a panel of of arbitrators as to Wisconsin’s liability during negotiations with the Potawatomi that year.

Walker blamed his failure to accommodate both tribes on his Democratic predecessor for tying the state’s hands in negotiations back in 2003.

I don’t think that anyone could say that we didn’t act in good faith to try to get to a good point to this,” Walker told the press as he vetoed the Kenosha casino. “But in the end, what it really boils down to is that there are more than a hundred million reasons why we had to make this decision and they all fall firmly on the lap of Doyle.”

The Menominee sued in federal court, but its lawsuit was rejected in September, paving the way for the Potawatomi deal to go ahead. The DOI’s Bureau of Indian Affairs has 45 days to ratify or reject the amendment.