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Tribes oppose reopening gambling compacts
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Casinos on the Red Lake Indian Reservation employ more than 600 people. But tribal leaders say the reservation's rural location limits their gaming revenue. They say they don't make enough to share with the state. (MPR Photo/Tom Robertson)
It's been 15 years since state officials signed gaming compacts with Minnesota's Indian tribes. Since then, the tribes have built 18 casinos, which generate hundreds of millions of dollars in revenue -- far more than anyone imagined they would. The state of Minnesota gets only a small sliver of that money, which is used to regulate the casinos. Minnesota's contract with the tribes is permanent -- no expiration, no renegotiation. Gov. Pawlenty has hinted it's time for a change. Tribal leaders say they're not sure what that means, but they are clearly not interested in renegotiating.

Bemidji, Minn. — No one was expecting what Gov. Pawlenty said at the end of his State of the State address last month.

"We need to recognize that times have changed. The compacts negotiated with the American Indian tribes almost 15 years ago do not reflect current circumstances, and we need to address the issue," Pawlenty said. "My preference is to keep gaming within its current contours. But we need to explore a better deal for Minnesotans. And that's what we're going to do."

Those words caught a lot of people by surprise, including state lawmakers, some of the governor's fellow Republicans, and Indian leaders across the state.

Darrell Seki, tribal treasurer on the Red Lake Reservation in northern Minnesota, suspects the governor wants a piece of the gaming pie. But Seki says a deal is a deal.

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Image "A deal is a deal"

"I guess it's a surprise," said Seki. "But what's another broken promise, broken treaty."

Casino gambling hasn't made anyone rich at Red Lake. Most of the customers at the casino in the reservation's largest community are tribal members. That's because the isolated location doesn't attract many visitors.

Red Lake's gaming revenues have paid for some infrastructure improvements on the reservation. There are now programs for kids and the elderly. But mostly, casinos have created more than 600 jobs in a region that's struggled with high unemployment.

"To tell you the truth, if Red Lake is required to open its compacts, there's nothing for us to give to the state," Seki said. "We just have enough revenues for us to operate our tribal government. I believe they should keep the compacts as is."

Minnesota tribes don't have to say how much their casinos make. Some estimates put it at close to $800 million a year, but that's not shared equally among the tribes.

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Image Leech Lake Chairman Pete White

About 65 percent of Indians live in northern Minnesota, while the vast majority of Indian gaming dollars are earned by two small tribes in the Twin Cities metro area. It's turned several hundred of those tribal members into millionaires.

That's not the case on the Leech Lake Reservation in north central Minnesota. Leech Lake band members do not get monthly checks from gaming dollars. Tribal Chairman Pete White says the best thing gaming has done for his people is provide about 1,000 new jobs. White says he's suspicious of Gov. Pawlenty's intentions.

"Look at the history," said White. "Every time there's something that's worth something within the Indian people, it gets taken. And it's something that I just don't understand."

White says he staunchly opposes reopening the compacts. Every tribe in the state agrees.

"They will not be negotiated," said White. "Our tribal sovereignty will not be compromised with the state. The state does not have any jurisdiction over tribes."

Minnesota was the first state in the country to reach a contract with Indian tribes over Indian-run casinos. Now, two dozen states have compacts, and seven of those have agreements to share revenue. Many states require their compacts be renegotiated periodically. Minnesota's compacts -- like a handful of other states -- have no revenue sharing and no sunset clause for renegotiation.

Some say the state made a big mistake, including Red Lake tribal member Bill Lawrence.

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Image Bill Lawrence

"When the deal is so one-sided, at some point it's going to have to be changed," Lawrence said.

Lawrence is a longtime critic of tribal governments. He publishes the Native American Press/Ojibwe News newspaper. He says the state gave away the farm when it signed the deal with tribes.

"It was almost to the point that the legislators didn't really know what they were doing when they negotiated this thing on behalf of the state," Lawrence said. "And they pretty much gave everything away to the tribes."

Lawrence wants the compacts renegotiated. He says there should be provisions that ensure the poorer northern tribes get a more equitable share of the wealth. He says it's time the tribes contribute their fair share to the state of Minnesota.

Minnesota Indian Gaming Association director John McCarthy disagrees. He was in on the compact negotiations on behalf of the tribes.

"Did the state of Minnesota get a good deal in 1988? You bet," said McCarthy. "And are they still getting a good deal? Exceptional deal. Fifteen years later, what's changed? There's a lot of money on the table."

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Image John McCarthy

Even those who negotiated on behalf of the state at the time agree the question of revenue sharing with the state was not even on the table. The state's primary goals were to limit the spread of gambling, and to create jobs in rural Minnesota. John McCarthy says the state got what it wanted.

"We're sitting here now, almost 15 years later, and we have 14,000 jobs that have been developed throughout Minnesota, primarily in rural areas, at no cost to the state. Not a dime," said McCarthy. "Pretty good deal. And I think if somebody came into Minnesota tomorrow morning and offered that kind of deal, Minnesota would be jumping up and down to do tax incentives."

Gov. Pawlenty hasn't offered much detail since his first mention of the idea, but he has floated several possibilities.

One option would allow the tribes could add new games. They're now limited to offering just slot machines and blackjack. In return, the state would get a cut of the revenue from those new games. Another idea would be for the tribes to share some of their profits with the state, in exchange for a continued monopoly on gambling.

Some lawmakers have been trying for years to break that monopoly. There are at least five bills being pushed this session that would allow limited expansion of gambling. They'd all give the state more money. One bill would create a casino in Anoka County run jointly by the state and the Red Lake and White Earth Ojibwe bands.

Senate Republican Minority Leader Dick Day favors another bill that would add slot machines to the Canturbury Park horse track. Day says he hopes the governor plans to back new casinos. He says Pawlenty is heading down the wrong path with the tribes.

"He seems to feel that he can pull all the Indian tribes back together and open up the compacts," said Day. "I think that is a really, really, really long shot. I don't think that's going to happen. And I think the governor is totally wrong in even asking."

The tribes have not closed the door completely to talks with the state. McCarthy of the Indian Gaming Association says they're open to ideas outside of the compacts that could be mutually beneficial. However, he says tribes will fight vigorously to protect their monopoly.

"It's a Pandora's box," said McCarthy. "With Indian gaming, tribal gaming, you know what it is and where it is. You open the door and God only knows where it's going to go."

Gov. Pawlenty has said in the past he opposes expansion of gambling in Minnesota. It's not clear whether he's changed his mind. The governor's staff says Pawlenty is still thinking about what direction he'll take.

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