Is Scott Walker against free market capitalism?

Wisconsin was one of the first states to agree to Indian tribes casinos.  That the casinos were to be on traditional tribal land was an underlying assumption.  By June of 1992, Governor Tommy Thompson had finalized the last of the 11 tribal-state compacts and Indian gaming in Wisconsin was off and running.  In the early years of Indian gaming there was still considerable confusion about what constituted tribal trust land, commonly called an Indian reservation.  Congress, much like the governor of Wisconsin, envisioned the reservations that tribes had occupied since signing the original treaties with the federal government in the early 19th century, would be the home of Indian casinos.  Still, the National Indian Gaming Regulatory Act did anticipate the possibility of a tribe acquiring additional land and using it for a casino, but NIGRA made that process difficult and gave each state’s governor the final decision in allowing newly acquired trust land to be used for a casino.  There have been very few such exceptions allowed in twenty-five years.

Wisconsin is home to one of the exceptions, the Potawatomi opened a casino in Milwaukee 1991. The Potawatomi Bingo Casino was important for Milwaukee’s efforts to rejuvenate part of the city, it was welcomed by city officials.  It was also a very profitable location for the Potawatomi Tribe.  Most other tribes in Wisconsin have casinos located on reservations not very close to major urban centers.  The Potawatomi Bingo Casino is in a city with over 500,000 residents – a considerable business advantage. It has over 3000 slot machines and while the revenue numbers are not public, it is estimated to generate over $350 million in gaming revenue annually.

Gambling revenue at Potawatomi Bingo Casino fell by about $6 million in the past year…Gamblers at the casino at 1721 Canal St. lost at least $362 million in the 12 month period that ended June 30 compared with the $368 million that gamblers left on the tables or in the slot machines in the previous year. As a result, the payments the Potawatomi tribe makes to the city and county of Milwaukee also fell.  The estimate of the off-reservation casino’s net win is based on the annual payment that the Potawatomi tribe makes to the city and county of Milwaukee. Each body receives 1.5% of the casino’s annual net win. The city and county each received $5.44 million from the Potawatomi this year, the tribe said. Last year, each government received $5.51 million from the Potawatomi, records show. The tribe paid the city and county $5.47 million in 2011. Michael McLoone, Milwaukee Journal Sentinel, 8-19-13

Currently one of the more remote tribes is in the process of trying to develop a casino in a better location.  The Menominee Tribe has been granted trust status by the federal government for a former dog racing track it purchased.  The Menominee already have a casino, however the entire county in which it is located has less than 5000 people. So, it is easy to see why the tribe would like a better location. The racetrack is located in Kenosha, not exactly New York City, but it has 100,000 citizens and is just a 45 minute drive from Chicago, or even better, a 20 minute ride from Chicago’s tony North shore suburbs.  While Keshena, where the tribe’s current casino is located, is in a remote area north of Green Bay.

With the federal government approval of the transfer from fee-simple to trust designation the site is eligible for a casino, that is, if the governor agrees.  Well, unlike the days of his battles with state labor unions, Scott Walker is not being very decisive.  Governor Walker is leaving the proposal up to the other tribes – if all eleven tribes agree, he will approve the site for a casino.

 Saying he had no interest playing King Solomon, Gov. Scott Walker said Tuesday that he hopes the 11 Indian tribes in Wisconsin can reach an agreement among themselves on whether to back a new Menominee casino in Kenosha.  Last week, the U.S. Department of Interior approved the Menominee tribe’s plans for an $800 million off-reservation Indian casino in Kenosha.  The final decision rests with Walker, because federal law gives the governor the unilateral authority to approve or veto the proposed Kenosha casino.  Walker’s statements came as a bipartisan group of tribal leaders, state lawmakers and Kenosha business leaders called on Walker to approve the project in a separate Capitol news conference. Don Walker, Cary Spivak/ Jason Stein, Journal Sentinel, 8-29-13

Immediately, after the federal approval and the governor’s subsequent statements on the subject, two tribes objected to the project.  The Ho-Chunk has joined the Potawatomi in opposing the Menominee casino. The response is not surprising. Tribes have not shown loyalty in the past to other tribes when it concerns casino competition.  For example, the main opposition to a proposed off-reservation casino by the North Fork Rancheria in California comes from the Picayune Rancheria and Table Mountain Rancheria; “The market near Fresno, a city hard hit by the recession and facing the risk of bankruptcy, is not large enough to support an additional casino,” Brigade said in a letter to the Legislature in April opposing the North Fork compact.

The Potawatomi is not the only Wisconsin Indian tribe opposed to the new casino that the Menominee tribe wants to open in Kenosha.  Ho-Chunk spokesman Collin Price says there’s “no chance” his group will reach a consensus for gaming in which he called “ancestral Ho-Chunk land.” WTAQ, 8-29-13

The issue is causing quite a political stir in Wisconsin.  That is not new for the governor.  Scott Walker has been a political lightening rod since he took office in January 2011.  Some of the current opposition is coming from his own party.  The president of the state senate, a Republican, questions the governor’s position on free market grounds.  Mike Ellis is asking if this is the way the free market operates – should existing businesses be given veto power over potential competitors?

 Senate President Mike Ellis on Wednesday questioned Gov. Scott Walker’s plans for deciding whether to approve a Kenosha casino, signaling he viewed one of Walker’s standards as anti-free market. Walker, who now has the lone say on approving the Menominee Indian casino at a former greyhound track, has said he would approve the facility only if there is consensus among the state’s 11 tribes…”This seems to me to be counter to the concept of free enterprise,” Ellis (R-Neenah) said of Walker’s policy. He said Walker’s criteria would be like requiring Home Depot to get approval from Menards and other competitors to build a new store. Casinos are no different from any other type of business, Ellis said.  “Are we going to start saying we can only have so many gas stations?” Ellis said. “Are we going to start saying we can only have so many hardware stores?” Patrick Marley, Journal Sentinel, 8-29-13

 It is an intriguing question.  In this era of intense competition in the gaming industry getting approval from existing casinos for a new casino would be very difficult anywhere.  Do you think the Borgata management in Atlantic City would have approved Revel? Not likely.  In fact, except on the Las Vegas Strip where a new casino always seems to be good for the entire Strip,  I can’t imagine a new casino ever getting approval from its competitors. Can you?



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