In 2015, when then Gov. Scott Walker rejected plans by the Menominee Tribe and Hard Rock International to build a casino and entertainment complex at the former Dairyland Greyhound Park site in Kenosha, Walker and his administration said approving the Kenosha casino plans could cost the state hundreds of millions of dollars in future tribal revenue sharing payments and that the state may also have had to pay the Forest County Potawatomi Community (which has a hotel and casino in Milwaukee) hundreds of millions of dollars in refunds of previous payments it had made to the state.
"The risk to the state's taxpayers is too great," Walker said at the time. "The current cost to taxpayers and the long-term economic hit to the state budget would be a potential loss of hundreds of millions of dollars."
Seven years later, the Menominee Tribe and Hard Rock International are
again trying to build a casino and entertainment complex in Kenosha, this time a smaller project at a different site, along the west side of I-94.
To build it, they will need approval from U.S. Secretary of the Interior and the governor, either Tony Evers or Tim Michels, depending on who wins the election in November. Neither Evers or Michels have said if they would approve the project.
A new report from the Wisconsin Legislative Reference Bureau says a 2018 amendment to the state's compact to the Potawatomi significantly reduces the state's financial risk to approving plans for a Kenosha casino.
"If the governor were to approve the Menominee's latest Kenosha casino proposal, it appears that the state's potential liability to the Potawatomi could be significantly less after the adoption of the 2018 compact amendment than before adopting the amendment," the report states.
In 2015, the state's compact with the Potawatomi included an amendment that required the state to compensate the tribe for revenues lost due to any new gaming facility located between 30 and 50 miles of its Milwaukee casino. The state would also have been required to refund shared revenue payments the tribe had made to the state.
The U.S. Bureau of Indian Affairs had rejected that compact amendment, but in 2015 the Potawatomi was challenging the ruling in federal court and the outcome was unclear when Walker made his decision to reject the Kenosha casino plans.
The 2018 compact amendment provides mitigation for revenue losses only on a going-forward basis, the LRB report states. Now the state would not have to refund the Potawatomi for any of its past payments to the state. The 2018 compact amendment also caps the Potawatomi's permissible payment withholding at $250 million, a 50% reduction from the potential liability of more than $500 million in a 2014 compact amendment, the report states.
In addition, the Potawatomi may now only withhold payments to the state if actual losses were realized by the tribe as a result of an approved casino within 30 or 50 miles of its Milwaukee casino, the LRB report states (the new Kenosha casino site is about 32 miles south of Potawatomi Hotel & Casino). The Potawatomi had previously withheld payments while Walker considered approving the Kenosha casino plans. Under the 2018 compact amendment, that wouldn't be permissible, the report states.
"As with the 2015 casino (proposal), the Potawatomi has announced opposition to the recently proposed project, citing competition with the tribe's Milwaukee casino," the LRB report states. "Once again, the proposed Kenosha casino will be within 50 miles of the Milwaukee casino. However, the financial risk to the state is not as great as during the 2013-15 deliberations. Since Gov. Walker rejected the Kenosha casino, the state agreed to a 2018 compact amendment with the Potawatomi that significantly reduces the state's liability if a casino opens between 30 and 50 miles from the tribe's Milwaukee casino."
