Bill to expand gambling seems to be a good bet

BY PATRICK SWEENEY Pioneer Press A year ago, Gov. Tim Pawlenty announced in his State of the State message that it was time for Minnesota to get a "better deal" from the state's big Indian casino industry. But after months of on-again, off-again negotiations with tribal leaders, Pawlenty has made little progress toward persuading tribes to give the state $350 million a year from their gambling earnings. Still, as state lawmakers return to the Capitol on Tuesday, several factors beyond Pawlenty's efforts probably will push the contentious issue of gambling to the forefront of the 2005 legislative session. Tribal officials so far have rebuffed Pawlenty's efforts. The Mdewakanton Sioux, the tribe that operates the huge Mystic Lake casino in Prior Lake and that would provide much of the money Pawlenty is seeking, has flatly rejected his request. In a Dec. 17 letter to Pawlenty, Stanley Crooks, the Mdewakanton tribal chairman, wrote, in part: "(You) trample your own political party's core principles by promoting a tax or fee (or whatever you wish to call it) on the tribes. Regardless, it is nothing more than a financial punishment against tribes for achieving meaningful economic success." Crooks said he had consulted with many other tribal leaders and they supported his statements. Pawlenty's effort to persuade tribes to give the state a share of gaming profits has failed, according to House Speaker Steve Sviggum. "It's not happening," Sviggum said. "They're not meeting with him." Now, as the Legislature prepares to return to session, Pawlenty says he will make a recommendation to the Legislature on gambling sometime before the end of January. And legislators, including one prominent Democratic senator who has not been a player in previous gambling debates, are talking about plans for a state-owned or state-licensed casino. "There's going to be enough votes in the Senate," said Sen. Keith Langseth, DFL-Glyndon. He predicted the Senate would approve some sort of casino legislation during the coming session. Langseth said he wants the Legislature to consider putting a casino at Canterbury Park racetrack in Shakopee and directing that some of its profits flow not only to the state, but also to poor northern tribes largely left out of the gambling boom that has benefited tribes whose reservation casinos are in the metropolitan area or close to it. Under Langseth's proposal, which he said is more a set of talking points than a plan, the state-sanctioned casino would be in direct competition with the Mystic Lake casino, just a few miles down the road in Prior Lake. "The only justification for the state to get involved is that monopoly in the metropolitan area by one tribe with 200-some members," Langseth said. The wildly successful Mystic Lake produces profits of more than $1 million a year for each member of the Mdewakanton Sioux tribe. In addition to Pawlenty's pledge to propose gambling legislation and Langseth's emergence as potential Democratic-Farmer-Labor supporter for a casino bill, other developments are spotlighting gambling: • The state Racing Commission is scheduled to meet today to discuss whether to award a license for a proposed harness racing track south of Forest Lake. If the applicant, the North Metro Harness Initiative, wins the license, it would — under current law — have the right to open a high-stakes poker parlor like the one already in operation at Canterbury. If Canterbury gets a casino, the harness track almost certainly would seek one, too. • Late in January, Legislative Auditor Jim Nobles will release an audit examining the procedures in place — or not in place — to regulate gambling and ensure gamblers are not cheated when they patronize the Minnesota Lottery, the racetrack, the Canterbury poker club, Indian casinos or the hundreds of pull-tab booths around the state. • The Canterbury poker club, which will produce about $26 million in revenue this year for the company that owns the racetrack, is not taxed. Lawmakers last year were about to impose a tax when the legislative session collapsed in stalemate. In addition to those issues, Senate Minority Leader Dick Day, R-Owatonna, said recently that he would consider sponsoring legislation approving a casino in Anoka County and perhaps a riverboat casino in St. Paul or South St. Paul if the additional gambling venues would help pass his favorite gambling project, a Canterbury casino. In the past, a coalition of legislators from both ends of political spectrum — liberal Democrats who want to protect casino gambling as an economic development opportunity for Indians and conservative Republicans who oppose gambling on moral grounds — have defeated efforts to allow off-reservation casinos. Pawlenty once was among the opponents of any expansion of gambling and said "running, managing, licensing casinos is not a proper government function." He told the Pioneer Press in November that he would prefer there were no gambling in Minnesota. But he said the current situation in which tribes enjoy a monopoly on casino gaming but pay nothing to the state is not acceptable. In several recent interviews, Pawlenty said his strong first choice is to persuade tribes to give the state a 25 percent cut of their revenue in return for a guarantee of a continued monopoly and perhaps state approval for a new Twin Cities casino that would benefit Indians and the state. And if the tribes do not agree? "We're actively pursuing Plan B and Plan C options," Pawlenty said late this month. He refused to elaborate. In October, Pawlenty's chief of staff, Dan McElroy, met in Las Vegas with two major casino operators, MGM Mirage and Caesars Entertainment, to talk about how Minnesota might conduct a bidding competition between private companies for the right to open a casino here. But a Pioneer Press poll in November indicated that, while many Minnesotans support Pawlenty's goal of obtaining revenue from the tribes, they do not like the idea of big private casinos coming here. The money that gambling could produce is a powerful incentive for legislators to consider one or more state-sponsored casinos. Pawlenty said he will not count on gambling revenue to fix Minnesota's projected $700 million budget deficit but probably would recommend using gambling profits — either from the tribes or some competitor — to pay for unspecified enhancements to the budget. Sviggum, the Republican House Speaker, has an image in his mind of how gambling profits could come into play during the legislative session. Also previously opposed to gambling, Sviggum became a big supporter in 2003 and backed allowing the Minnesota Lottery to open a 2,000-slot-machine casino at Canterbury, which was dubbed a racino. The proposal, which passed the House but not the Senate, was projected to produce $75 million a year for the state. Now Sviggum is talking about a "pumped-up" Canterbury project that would have far more slots and produce more money for the state. Sviggum said he doubted House members would approve such a plan early in the session, but speculated Democrats and Republicans might pass it after budget realities become evident. "If you're going to do anything for education, anything for nursing home increases, which my caucus would like, it seems to me you have to do some gaming," Sviggum said. He says the Legislature would approve a state-sponsored casino, maybe more than one, if the choice were between expanding gambling and failing to increase school funding. "Once you let people know where the revenue is going, then you pass it," Sviggum said. "By itself, racino probably doesn't pass." Sviggum, who last year was a co-sponsor of a proposal to put the lottery and two northern tribes — the White Earth and Red Lake bands of Chippewa — into a partnership to operate a casino in the northern suburbs, said he told the tribes he is willing to co-sponsor the bill again in 2005. Those tribes, plus the Leech Lake band of Chippewa, make up 85 percent of Minnesota's Indian population. Langseth said he wants all three of those tribes to share in profits from the state-licensed casino he thinks should be built at Canterbury Park. 651-228-5253.