Illinois deals wild card to Wisconsin casinos

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The Menominee Indian Tribe of Wisconsin and a developer say they will move forward with their plans for a proposed Kenosha casino, even though it will have to compete with a future casino to be built northwest of Chicago.

The Illinois Gaming Board awarded that state’s 10th casino license to Rosemont on March 15. The other finalists for the casino were Waukegan and Des Plaines.

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The new Illinois casino would compete directly with a Kenosha casino for gaming patrons, particularly gamblers from Chicago and Chicago’s northern suburbs. However, a casino in Waukegan, located just 17 miles from Kenosha, would have provided even more competition. Rosemont, near O’Hare International Airport, is about 45 miles south of Kenosha.

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The Menominee Indian Tribe and its developer, Kenosha-based Kenesah Gaming Development LLC, have an option to purchase Dairyland Greyhound Park in Kenosha for $40.5 million. Kenesah and the tribe want to build an entertainment destination center, which would feature a 160,000 square-foot casino, a 200-room upscale hotel, a 5,000-seat auditorium, several restaurants and other amenities such as a water park.

The Connecticut-based Mohegan Tribe is helping to finance the project.

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Even with a casino in Rosemont Kenesah and Menominee representatives say the market will still support a Kenosha casino as well.

"We will just proceed with our plans," said Joan Delabreau, chairwoman of the Menominee Indian Tribe. "We feel it’s an attractive area for us. We’ll still do very good business."

"There are plenty of adults in the population to work with," said Dennis Troha, owner and manager of Kenesah Gaming Development.

Casinos in Kenosha and Rosemont also would compete for gambling business with Potawatomi Bingo Casino in Milwaukee. About 15% of the Milwaukee casino’s business comes from Illinois gamblers, said Ken Walsh, spokesman for the Forrest County Potawatomi Community.

Many of those Illinois gamblers would likely go to a casino in Kenosha or Rosemont instead of Milwaukee.

"Anything that’s going to take away business is a concern," Walsh said.

Fewer gamblers coming to Potawatomi Bingo Casino would hurt companies that do business with the casino and would reduce the tribe’s annual contribution to the city and county, Walsh said.

The tribe gives 1.5% of its net proceeds from the casino to the city and another 1.5% to the county. For 2003, the city and county each received nearly $4 million from the casino, Walsh said.

The Kenosha casino proposal still awaits the approval of the Bureau of Indian Affairs, part of the U.S. Department of the Interior, and Wisconsin Gov. Jim Doyle.

"We have to have the federal and state approval," said Troha. "If we get it, (a casino in) Kenosha will be built."

Even if nearby Waukegan had been chosen for a casino, Troha and Delabreau said their plans for a Kenosha casino would still be moving forward.

Currently, all of the casinos in the Chicago area are located to the west, south and east of the city and would have provided little competition with a Kenosha casino.

The business plan for a casino in Kenosha assumed there would be a future casino built in or near Rosemont, Troha said. With that assumption, the Kenosha casino is expected to draw about 60% of its patrons from Illinois and about 40% of its patrons from Wisconsin, he said.

Troha said he and officials with the Menominee Indian Tribe were closely following the process in Illinois to choose the new casino site. They hoped the casino would not be granted to Waukegan, and were glad to hear Rosemont was selected instead.

"It’s good to have this matter resolved," said Brenna Kriviskey Sadler, spokeswoman for the Menominee Indian Tribe. "We’re happy with the gaming board’s decision."

Waukegan casino backers said about 30% of their customers would have come from Wisconsin.

However, a casino built in Kenosha would have reduced the number of Wisconsin gamblers going to a casino in Illinois, Troha said. Elzie Higginbottom, chairman of the Illinois Gaming Board, said the potential for a casino in Kenosha was one reason the board did not select Waukegan for that state’s 10th casino.

The Potawatomi will be able to compete with Rosemont and Kenosha for more gamblers from both Wisconsin and Illinois if the tribe is able to expand the Milwaukee casino, Walsh said.

The Potawatomi want to expand the Milwaukee casino to add more slot machines, craps and roulette tables and other gambling positions, Walsh said. After the tribe’s gaming compact with the state was amended in May, Potawatomi officials said they were planning a $120 million expansion of the casino that would add 950 employees.

The amended compact improves the casino’s ability to compete with Illinois casinos by allowing for the expansion and by allowing the casino to offer the same games played at casinos in surrounding states, Walsh said.

However, those expansion plans are on hold until the Wisconsin Supreme Court rules on a pair of lawsuits. Republican leaders in the state legislature, Rep. John Gard and Sen. Mary Panzer, have filed a suit claiming Doyle exceeded his powers by negotiating changes to the gambling compacts with the Potawatomi and other tribes.

The other lawsuit, filed by Dairyland Greyhound Park, claims a 1993 amendment to the state constitution bans gambling expansions and says the tribal casinos in the state should not be allowed to operate.

The Dairyland lawsuit, ironically, could derail the plans for a Kenosha casino. Both lawsuits could have a dramatic affect on the Potawatomi Bingo Casino.

"The lawsuits are holding up our expansion and not allowing us to compete," Walsh said. "The lawsuits are threatening to put us out of business. We’re taking them seriously. We’re focusing (our attention) on the lawsuits."

If the court rejects both lawsuits, the Potawatomi Bingo Casino expansion could proceed.

"A major cloud would be lifted at that point," Walsh said.

Troha said the Potawatomi’s expansion plans demonstrate that the market is large enough to support a casino in Milwaukee, Kenosha and Rosemont.

"The Potawatomi aren’t able to serve the market," Troha said. "That’s why they’re thinking about expanding. They understand there’s still a market to be served. We will help ease the strain they’ve got."

Walsh said he is unsure if the market could support a casino in Milwaukee, Kenosha and Rosemont.

The Milwaukee casino may initially lose some business if a casino is built in Kenosha, but it would eventually recover and continue to grow in the long run, Troha said.

Troha and the Menominee tribe say they plan to create a destination with more attractions than their competitors in Milwaukee or Illinois. The Kenosha casino would be larger and have more additional activities, such as the dog track, than the other casinos, he said.

"We’re going to take it to another level," Troha said. "There are a lot of things that will differentiate ourselves."

"We’re hoping to be a premier destination area," Delabreau said. "We still hope to capture the Illinois market."

The 160,000 square-foot Kenosha casino would have 2,500 to 3,500 gaming positions with a mix of table, electronic games, pari-mutuel betting on live and simulcast racing. The 5,000 seat auditorium could be used to attract boxing matches and other performances or events, Troha said.

By comparison, Potawatomi Bingo Casino is a 256,000 square-foot casino with just over 1,500 slot machines, 33 table games, a 1,600 seat bingo hall, a 500-seat cabaret-style theater and specialty restaurants.

In Rosemont, Isle of Capri Casinos Inc. plan to build a 40,000 square-foot, Caribbean-themed casino with four signature restaurants.

Kenosha casino backers say their complex would provide an economic boost to the area. The casino would have an annual economic impact of $500 million and directly and indirectly create 4,700 to 6,000 permanent jobs in the area, according to a study by PricewaterhouseCoopers done for Kenesah and the Menominee Indian Tribe.

Construction of the Kenosha casino could begin in two years if the court rules against the Dairyland lawsuit and the casino receives state and federal approval, Troha said.

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