Gov. Scott Walker and the Forest County Potawatomi have signed off on an agreement that puts Wisconsin on the hook for up to $250 million if the tribe were to suffer losses from a competitor’s casino being built.
The agreement, if approved by the U.S. Bureau of Indian Affairs, would likely conclude negotiations that commenced more than a decade ago under Democratic Gov. Jim Doyle’s administration.
The ongoing negotiations surrounded the legally binding compact the tribe entered into with the state of Wisconsin, which is required for a tribe to operate a casino.
The new agreement would reduce the state’s liability by $250 million from $500 million approved by an arbitration tribunal but rejected in 2015 by the BIA.
The state originally agreed to liability for losses at tribal casinos because it guaranteed, through tribal gaming compacts, geographic exclusivity for casinos in exchange for payments from tribes, also known as revenue sharing. The state uses some of that money for regulation of the casino industry.
The Potawatomi, for example, have agreed to make revenue sharing payments to Wisconsin through 2031.
Those negotiations occurred while the state considered approving the Menominee Nation’s request to build an $800 million casino in Kenosha. Though that plan was approved by the federal government in 2013, Walker rejected it in 2015, blaming Doyle for the 2005 compact that made the state liable for losses at the Potawatomi’s Milwaukee casino.
Both the Potawatomi and Ho-Chunk tribes opposed the Kenosha casino on the grounds it could potentially reduce their profits.
The new agreement would allow the Forest County Potawatomi to reduce its payment to the state by as much as $250 million if another casino were built within 30 to 50 miles of the Milwaukee casino location.
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Doyle had originally approved a 50-mile zone of exclusivity for the Potawatomi’s Milwaukee casino in 2003, but it was rejected by the Bureau of Indian Affairs. In response, the state had then agreed to help make up for losses if a casino were ever approved between 30 and 50 miles away from the location.
But under that arrangement, the state and tribe would need to enter into arbitration where a panel would decide the state’s liability.
Department of Administration Secretary Ellen Nowak said in a statement the new agreement provides more stability for the state and tribe because the state would be locked into $250 million in liability for losses without an arbitration tribunal having to weigh in.
Nowak underscored it reduces the state’s liability and limits future exposure.
Forest County Potawatomi Attorney General Jeff Crawford also endorsed the agreement.
“We appreciate the administration engaging in good-faith, government-to-government negotiations to find agreement on this proposed compact agreement,” Crawford said in a statement. “This amendment will clarify the obligations laid out in the 2005 Gaming Compact between the state of Wisconsin and the Forest County Potawatomi community.”
For any off-reservation casino to be built, the Bureau of Indian Affairs and governor would have to sign off.
Under both the old and new agreements, new casinos could not be built within 30 miles of the Potawatomi casino.
[Editor's note: This story has been updated to reflect a correction. The original inaccurately characterized how the state would make up for potential losses at Forest County Potawatomi tribe's Milwaukee casino. The new agreement would allow the tribe to reduce its payment to the state by as much as $250 million if another casino were built within 30 to 50 miles of the Milwaukee casino location.]