Gaming expert says state’s casino law is ‘legal fiction’
By Erik Gunn, for SBT
Gambling researcher William Thompson has an urgent warning for Wisconsin: Its entire Indian gaming compact system operates under a series of legal fictions that could be overturned in the courts.
The payments to the state that the tribes make under the compacts amount, Thompson argues, to a state tax on gaming — something expressly outlawed by federal law.
As a revenue alternative, Thompson proposes that the state collect money by charging gamblers who aren’t tribal members an entry tax to casinos — a proposal he’s aired in a Wisconsin Policy Research Institute paper.
This is not a mere legal nicety. While the tribes have gone along with the payments, nothing prevents them from challenging them in the future, Thompson and other sources say. In the compacts themselves is language that some fear could open the door to such a challenge.
The amended compacts are "severable" — that is, even if a court were to strike down one portion of the compact as illegal, the remainder would stay in effect.
For that reason, it’s conceivable that a tribe could challenge the payments in the future, obtain a ruling to throw them out as a violation of federal law, with the state then stuck with perpetual gaming compacts and no means of collecting money.
Tribal representatives take issue with that hypothetical scenario on several levels. For one thing, says Martin Schreiber, the Potawatomi lobbyist and former acting governor, the payments aren’t a tax; they are simply a payment to the state in return for a monopoly right to run gambling operations.
Further, Schreiber dismisses the suggestion that the tribe he represents, or any other, would seek to subvert the current system by challenging the payments in the future.
"I think it’s highly improbable. The tribes entered into these compacts in good faith and have been living up to these compacts. Where would the challenge come from? Who would have a standing to bring such a lawsuit?" asks Schreiber. "I’ve worked with the tribes now since 1992. I’ve not seen the indication that they would do things like that."
Yet Thompson, who teaches at the University of Nevada-Las Vegas, charges there is still another underlying flaw in Wisconsin’s Indian casino operations. In 1993, more than 60% of state voters approved a state constitutional amendment banning all forms of gambling "except bingo, raffles, pari-mutuel on-track betting and the current state-run lottery."
Under federal law, tribes are permitted only those forms of gaming "that are permitted to others," Thompson says.
Since no one else is permitted to run casino games in the state under the ’93 amendment, tribes also should be forbidden, he contends. Their current casinos operate under a legal fiction — "and the legal fiction survives as long as it’s unchallenged."
Owners of the Dairyland dog track in Kenosha are challenging the Indians’ claim to exclusivity in gaming, however. After failing to develop a casino and resort at its racing park, Dairyland’s owners filed suit in circuit court, asserting that the Doyle amendments, because they would "greatly expand" gambling beyond the original 1991 and 1992 compacts, violated the 1993 state constitutional amendment.
In response, the tribes cite a 1991 ruling by Federal Judge Barbara Crabb that the 1987 voter referendum in favor of legalizing the lottery was broad enough to embrace other forms of gambling, including those offered by the tribes.
Doyle and the tribes also have argued that as revisions to the original compacts, the new agreements are lawful.
"The constitutional amendment dealt with non-Indian gaming," says Schreiber. "It is apparent that the constitutional amendment did not even conceptualize the fact that Indian gaming would even have been affected."
A lower court ruling in the Dairyland case has already backed Doyle and the tribes. Now, with the state Supreme Court preparing to take up both the legislators’ and the Dairyland lawsuits, the stakes have escalated strikingly.
Dec. 12, 2003 Small Business Times, Milwaukeee
