State within its rights to seek new agreement with tribes

By Rep. Jim Knoblach and Sen. Tom Neaville

Minnesota Legislature

      Recently we introduced a bill that would ban slot machines in Minnesota unless the agreements (compacts) governing them between the state and Indian tribes are renegotiated. Pulltabs, bingo, the lottery, blackjack and other types of gambling are not affected. We chose slot machines because they are the most addictive type of gambling Minnesota allows. The bill requires that new compacts take steps to minimize the social harm of gambling by raising the gambling age to 21, and prevent further expansion of tribal gambling locations and new forms of gambling. It also would require expiration dates of no more than 20 years, and revenue sharing with the state.

      Are we proposing to break our agreements with the Indian tribes? No. What we are proposing is to exercise the rights we retained when the compacts were negotiated. Section 2.1 of each compact says, "It is the intent of the State that, if the Minnesota Legislature prohibits the operation or use of video games of chance [slot machines] for all purposes as against public policy and as a matter of criminal law, this section shall not be construed to provide for continued operation by the Community of video games of chance pursuant to this compact."

      The compacts give the state the right to ban slot machines; we are simply proposing to exercise that right unless steps are taken to limit the social problems they cause.

      The bill also provides the opportunity for increased revenue sharing by the wealthier tribes to the benefit of the poorer ones. In recent years we have seen nine of the state's 11 tribes successfully lobby to prevent the two poorest and largest tribes from opening their own Twin Cities casino. If the goal of tribal gambling is economic development, shouldn't our poorest and largest tribes also benefit?

      Minnesota was one of the first states to negotiate tribal gambling compacts. Compared with other states, our negotiators did a poor job. There are only three states with compacts that have no revenue sharing and no expiration dates, and that have no other competitive casinos. Minnesota is by far the largest of them. If Minnesota had a revenue sharing arrangement like Connecticut, the No. 1 tribal gambling state, our state would likely receive more than $300 million per year.

      The enormous increase in tribal casino gambling has been a mixed blessing. For some tribes, it has brought about great material prosperity. We are happy for the prosperity and new jobs that many tribal members are enjoying. However, the two largest tribes, Red Lake and White Earth, remain impoverished. Meanwhile, numerous other Minnesotans, both tribal members and others, have become gambling addicts. And the additional costs to all taxpayers of law enforcement, transportation and social services have been enormous. Some studies indicate that the social costs of gambling outweigh its benefits 2-1.

      As gambling has increased, so have tension and calls for private competition. Minnesotans increasingly feel there should be a renegotiation of the compacts, private competition with an end to the monopoly, or both. Bills allowing for more gambling are proliferating.

      From the Canterbury racino, to a Twin Cities casino for the White Earth and Red Lake tribes, to a Mall of America casino, to northern suburbs harness racing, to slots in bars, the list goes on and legislative support continues to build.

      We have supported the racino, because Canterbury already is a major gambling destination.

      But beyond racino, we believe these new locations would come at a big social cost, even if they would produce more revenue for the state. Estimates are that 4 percent of the gamblers account for more than half of all gambling revenues. Nevada leads the nation in suicides and divorces. Bankruptcies in Minnesota are up substantially in recent years. Talk to bankers and they'll tell you gambling is the reason. Becoming a state where gambling is available everywhere will exact a higher and higher social cost.

      The bill we introduced has been an eye-opener. Few realized the state had this option, though if passed the bill would likely be tied up in court for years. Such a battle is not necessary, however. The governor and representatives of Minnesota's 11 tribes have been having discussions. It would be far better if they could renegotiate compacts that cut down on compulsive gambling, help those tribes that have not benefited, and restrain the expansion of gambling in exchange for a sharing of revenues with the state.

      Our state is at a crossroads in choosing between unrestrained competition and renegotiation. We believe renegotiation is a better alternative, and have authored this bill to help make it happen.