Menominee hail new agreement, state says Kenosha casino carries big risks

Menominee tribal officials hailed a gaming agreement signed with the state Tuesday saying it provides Gov. Scott Walker with a "clear path" to approve their proposed Kenosha casino. But a key state official warned that approval of the casino could put taxpayers on the hook for hundreds of millions of dollars.

"The amendment to the Menominee compact that the State and Menominee submitted (to federal regulators) does not fully remove these risks," states a memo from Department of Administration Secretary Mike Huebsch to Walker. The memo was released late Tuesday afternoon.

The amendment to the compact must be approved by the U.S. Bureau of Indian Affairs before it can take effect. The compact lays out gaming rules and the how much the Menominee would pay the state if Walker approves construction of the $800 million casino the tribe wants to open in Kenosha.

Walker has sole authority to approve or reject the casino. He faces a Feb. 19 deadline.

The amended compact will result in a projected $1 billion payment to the state over the 25-year life of the compact, the tribe said, adding that it expects its annual payments to exceed the current amounts paid by the Potawatomi and Ho-Chunk tribes. Those two tribes operate the state's largest casinos and oppose the Menominee plan to open an off-reservation casino in Kenosha.

"Gov. Walker now has a clear path to approve the Kenosha project and reap the benefits of $1 billion in revenue share for the state budget," Laurie Boivin, Menominee chairwoman, said in a statement.

But Huebsch warned the Menominee money may not be enough to cover potential losses to the state.

His memo lays out the numerous legal challenges and arguments that the Potawatomi have raised against the casino — most notably its claim that the state would have to reimburse the tribe for any losses due to the entrance of a new competitor.

The BIA this month rejected a proposed amendment to the Potawatomi compact that put the state on the hook for its expected losses to a Kenosha competitor.

The Potawatomi, however, is challenging that rejection.

Huebsch noted that the compact amendment would require the Menominee to reimburse the state for any funds it must pay the Potawatomi in future years.

"It does not compensate the state if the state has to refund past payments made by the Potawatomi," Huebsch wrote.

"If the Potawatomi are successful in their litigation against the state, the state may be required to pay Potawatomi hundreds of millions of dollars that will not be offset by payments to the state by the Menominee."

The claims and counter claims is the latest round in the nearly one-and-a-half year battle over the Menomiee's effort to convince Walker to allow it to open an off-reservation casino near the state line.

The BIA approved the casino in August 2013 and Walker has unilateral power to approve or veto the casino.

Fearing that a new competitor would cut into its profits, the Potawatomi — whose Milwaukee's gambling hall is the nation's first off-reservation casino — has led the opposition to the Menominee proposal.