April 23, 2005
Minnesota House Republicans have merged two casino proposals in an effort to keep gambling revenues on the table for end-of-session budget negotiations. The House Jobs and Economic Opportunity Committee has adopted a plan that authorizes slot machines at the Canterbury Park Racetrack in Shakopee and creates another casino at the same location. The second facility would be operated with interested Ojibwe bands.
St. Paul, Minn. — Gambling plans had been stalled at the state Capitol for almost a month when the new, two-casinos-in-one plan emerged on Friday. The latest twist on the gambling debate combines Gov. Tim Pawlenty's state-tribal partnership with a separate proposal to open a so-called "racino" at Canterbury Park. The plan still envisages two facilities, but they would be located together at Canterbury Park. Pawlenty Chief of Staff Dan McElroy says siting both casinos in one place was more appealing to some lawmakers.
"There were some members of the Legislature who objected to having casinos in two locations; they wanted to know where they were going to be. And they wanted to limit the geographic expansion of gaming. So they were more comfortable if both the facilities were in the same place. They were also more comfortable if there was more certainty as to where they would be located," McElroy said.
The shift in strategy also took the debate out of the House Taxes Committee, where the two independent bills never found sufficient traction to advance, and dropped the merged plan in the Jobs and Economic Opportunity panel where it was approved on a party line 7-to-5 vote with Republicans in favor. The change in tactics got the debate moving again, but opened up new uncertainties.
Earlier this week, one of the state's potential partner tribes -- the Leech Lake Band of Ojibwe -- indicated it would bow out of the plan rather than accept a merger with private gambling interests such as Canterbury. McElroy says it's unclear if the Red Lake Band will accept the hybrid approach, but the third interested tribe, White Earth, says it remains committed. Erma Vizenor is the White Earth tribal chair.
"White Earth is willing to work with Canterbury to merge our votes in any way that we can to get our legislation passed," she said.
Because the two casinos will sit side-by-side, both are expected to be smaller than originally conceived. That also means a smaller licensing fee for whichever tribes remain in the deal. The Canterbury licensing fee would actually increase somewhat. And in total the state could still expect more than $200 million over the next two years to help fill out the next budget cycle. Questions remain, however, about whether two smaller casinos on the same parcel of land would generate enough revenue to satisfy all parties. Randy Sampson is the president of Canterbury Park. He says he hasn't yet had a chance to run all the numbers.
"We think this will work, but I can't say that we have worked with our investment bankers because this is something that's just been coming together in the last week," Sampson said.
The uncertainties make it difficult to say how revenues from the two facilities might be split between the state and the tribes or between the state and Canterbury. The financing was further complicated by an amendment that would limit any individual's losses at either of the casinos to $500 a day. That restriction has been used in other states, but it's not clear how it would affect revenues.
Democrats on the committee fumed that the plan remains half-baked and that many important questions remain unanswered. Tim Mahoney of St. Paul says the short notice, abbreviated debate and late night vote were an attempt to ram the plan through uninspected.
"It's just an indication that they don't have the votes to pass this at a floor level. They're still trying to manipulate the system, get it through the process," according to Mahoney.
The two plans -- in their original, separate forms -- have been defeated in the Senate. But casino backers say the House action at least keeps the debate alive.