It’s time to renegotiate the compact with Indian tribes
Members of the ECM Publishers Editorial Board recently listened to representatives of two sides to the racino question in Minnesota.
While there is a growing desire to have slot machines at two Minnesota race tracks, we believe the interests of the state and the Indian tribes would be served best by renegotiating the compact that would allow the state to share in casino revenues
Dick Day, a former state senator who is a lobbyist for Racino NOW, presented that group’s plan for racinos at Canterbury Park in Shakopee and Running Aces Harness Park in Columbus. Having slot machines at Canterbury and Running Aces, where cards have been legal since 1999, would add to revenue for the state and help the horse industry here, Day said.
Twelve other states have racinos, the closest being Iowa and Indiana, and Day’s estimate was that a racino at Canterbury would add $200 million to state revenue during each two-year budget cycle.
John McCarthy, executive director of the Minnesota Indian Gaming Association, visited with the board and offered reasons why MIGA, which represents 9 of 11 Minnesota tribes, doesn’t think a racino is a good idea.
Revenue at tribal casinos will be lessened, McCarthy said, and once gambling is expanded, he said, there will be no turning back because more gambling will be inevitable. McCarthy also said that expanding gambling will cost the state more than it generates.
Members of the editorial board had lively discussions after both presentations and agreed Day and McCarthy had both made strong arguments.
They came up with idea that during these difficult economic times there may be a way to increase revenue as future governors and legislators seek to find ways to balance the budget. And that is to renegotiate the compact with Indian tribes that would allow the state to share in revenue from tribal casinos.
There are precedents for that throughout the country as some states have decided that they should share, or share more than previously, in casino profits.
For example, in 2007 in New Mexico, 11 tribes renegotiated a gaming compact with the state to share between 9.25 and 10.75 percent of slot machine revenue, depending upon the size of the facility. Previous to that the tribes shared 8 percent. The deal is good until 2045 and the estimated total revenue increase is $1 billion.
In 2009 the state of California signed a new compact with the Habematolel Pomo Tribe, good through 2030, that gives the state 15 percent of annual net win revenues.
And, last year in Florida, a renegotiated compact with the Seminole Indian Tribe gave the tribe exclusive rights to table games, and the right to operate slots at all of it casinos, in exchange for $1.2 billion over the next five years.
In Connecticut the negotiated agreements with Indian tribes call for the tribes to voluntarily pay the state a percentage of gambling revenue in exchange for the state agreeing to maintain tribal monopoly over certain types of gambling.
Renegotiating compacts hasn’t been without controversy. In Washington, a state that receives no revenue from tribal gambling, the governor killed a compact in 2005 that might have meant as much as $140 million per year for the state. That governor, and her party had received more than $1 million in contributions from tribes.
In Washington, unlike Minnesota, the annual revenue of tribal casinos is known. It was $1.34 billion in 2007.
There can be no argument that some Minnesota tribes, because of gaming revenue, have contributed greatly to the economy and to the quality of life in their areas. Tribes have made donations to many schools, groups and causes, as well as creating many jobs and the resulting payroll.
Still, rightly or wrongly, some in Minnesota have criticized the tribes for their constant expansion of gambling, and for not sharing their revenue as tribes do in 22 other states.
So, it would silence some of their critics and also be a public relations windfall for the tribes if they renegotiated the gaming compact that came into being with Gov. Rudy Perpich in office. And it would help the state as it seeks to find ways to balance the budget in years ahead.
The time has come to renegotiate the compact.
Editor’s note: This editorial is a product of the ECM Editorial Board. The Isanti County News is a part of ECM Publishers Inc.