Gambling issues take center stage at Capitol

By Don Davis

Pioneer Capitol Reporter

ST. PAUL - Two gambling proposals that have been circulating the Minnesota Legislature for years remain prime contenders in 2005, but Gov. Tim Pawlenty’s determination to get money from American Indian casinos may mix things up.

If tribes don’t donate money to the state in exchange for exclusive casino rights, the governor says he may consider other proposals, including a Twin Cities casino for a three-tribe northern Minnesota coalition.

Lawmakers also have heard about a proposal for a “racino,” which would bring a casino to the Canterbury Park horse-racing track in the southern Twin Cities suburbs.

The Republican governor wants tribes to contribute a quarter of their casino profits to the state, which his administration estimates would bring Minnesota $350 million. The tribes have angrily dismissed the Pawlenty proposal, and under federal law the governor has no way to force tribes to negotiate.

But last week, Pawlenty hedged on some recent gambling statements, saying he may not recommend a plan at all. The governor said it’s still his preference to cut the state in on gambling proceeds that now flow only to the Minnesota’s 11 tribal casinos.

Pawlenty said he believes many Minnesotans support his efforts to share gaming profits but they don’t like the idea of Las Vegas-style private casinos in the state, which could be an alternative to a profit-sharing agreement with tribes.

While the governor’s suggestion for profit-sharing forced the issue to the front burner in the session that begins Tuesday, some Senate Democrats who have been reluctant to consider Indian gambling as a revenue source appear ready for a change.

Sen. Rod Skoe, DFL-Clearbrook, said he has heard some senior senators say 2005 is the year a new casino will win approval.

Senate Majority Leader Dean Johnson, DFL-Willmar, expects the Senate to consider all gambling proposals. “Every voice ought to be heard.”

The House-passed racino will be back in a chamber with just a two-vote Republican margin after years of GOP domination. It is unclear how that change will affect racino prospects.

Nipping at the heels of the racino plan is one offered by the White Earth, Leech Lake and Red Lake bands of Chippewa. They want permission to build a casino-resort near the Twin Cities, splitting profits with the state. Their plan narrowly missed reaching a full House vote in 2004.

Pawlenty plans a Thursday meeting on the Red Lake Reservation to discuss the plan.

Sen. Keith Langseth, DFL-Glyndon, and Rep. Paul Marquart, DFL-Dilworth, said Pawlenty appeared to be trying to bully the state’s tribes into contributing to the state.

“That was too much of a strong arm,” Marquart said. “First of all, I would have brought the tribes to the table to see what we could work out.”

Most tribes rejected a Pawlenty offer to meet.

Marquart said he could support a state-run casino or the three tribes’ proposal. Skoe, whose district includes the White Earth and Red Lake Reservations, backs the northern tribes’ idea, but is willing to look at others.

“There are any number of combinations we can look at,” Skoe said.

Plenty of lawmakers remain opposed to new casinos. Sen. Dallas Sams, DFL-Staples, is one. “As a Christian, I can’t support it,” he said.

If Pawlenty fails to convince other tribes to contribute to the state, the three-tribe coalition and the Canterbury plans become the default favorites. A dark horse possibility is the state bringing in a Las Vegas company to build a bigger casino, with bigger state revenues than other proposals would offer.

There also is a chance that some of the plans could merge. Langseth has suggested locating the three northern tribes’ casino near the horse track, and Canterbury officials are willing to negotiate.

“We are not limiting this to just Canterbury Park,” Canterbury spokesman John Groen said. “If the Legislature feels that other venues or a combination of proposals is a better way, we certainly are willing to partner up.”

Until that happens, however, Canterbury plans to offer lawmakers a bigger casino proposal, one that would give the state more money than last session’s 2,000-slot-machine proposal. It would have paid the state $75 million.

The northern tribes want to build a Twin Cities-area casino with 4,000 to 5,000 slot machines, 120 black jack tables, 30 poker and other card tables and a 500-room hotel.

A recent report for Red Lake by financial adviser Valerie Red-Horse, chairwoman and CEO of Red-Horse Securities LLC, emphasizes that the three tribes’ existing operations--casino and otherwise--are not collateral for financing the project. Bonds would be sold to build the $476 million complex.

Red-Horse’s report shows the casino would generate a $280 million profit in its first year, with nearly $90 million going to the state. After a $62 million finance payment, the three tribes would have less than $130 million left to split among them.

The Associated Press contributed to this article.