The Forest County Potawatomi Tribe is withholding its annual shared revenue payment to the state of Wisconsin as Gov. Scott Walker’s administration considers whether or not to approve the Menominee Tribal Nation’s proposed Hard Rock casino project in Kenosha.
The Potawatomi failed to make its payment to the state that was due on June 30, according to a report submitted by Administration Department Secretary Mike Huebsch on Tuesday to Walker.
Huebsch’s report says that the state’s gaming compacts with three tribes, the Ho-Chunk Nation, Potawatomi and Lac du Flambeau, indicate that the state must indemnify them or offset them for losses if a casino is built in Kenosha. The Lac Du Flambeau tribe waived its claim in October and the Ho-Chunk Nation’s compact has a “relatively clear and defined process that addresses the state’s obligations,” to compensate for a Kenosha casino, Huebsch said in his report.
“We have reached an agreement with the Ho-Chunk Nation,” Huebsch’s report to Walker states. “As prescribed by the (Gov. Jim) Doyle compact with the Ho-Chunk Nation, if you approve the Kenosha casino, the Ho-Chunk Nation’s annual revenue sharing payment would decrease by the impact caused by the Kenosha casino.”
However, the Potawatomi compact does not contain a clear definition of indemnification for a Kenosha casino, Huebsch says.
“Substantial challenges lie ahead with the Potawatomi,” he said in the report. “The Doyle compact with the Potawatomi basically says the state must enter into arbitration to create a compact amendment that establishes a process. This compact amendment must then be submitted to the federal government. It appears the complicated provisions may have been designed to block a Kenosha casino.”
Huebsch did not disclose the amount of the withheld Potawatomi payment.
In a letter to legislators Tuesday, Walker said, “at least one of the tribal governments appears to believe that they could recover $100 million from the state, plus millions more through the process spelled out in the compacts and through the withholding of compact payments.”
Potawatomi spokesman George Ermert also declined to disclose the amount of the payment withheld.
“According to the terms of the Forest County Potawatomi Community’s compact, the tribe may get a reduction in, or refund of, the payments made to the state of Wisconsin should the state approve another casino within 50 miles of the Potawatomi Hotel & Casino in Milwaukee,” Ermert said in a statement. “The state may end up owing the Potawatomi money should the Kenosha casino be approved. Consequently, Potawatomi put its 2014 state compact payment in a segregated/reserve account.”
The Potawatomi’s decision to withhold its payment to the state is, “having a significant impact on the status” of the state budget, Walker said.
“Terms of the compacts approved by former Gov. Doyle could lead to a significant financial problem for the state of Wisconsin if a casino is approved in Kenosha before we have reached agreements with the impacted tribes,” Walker said in his letter to legislators. “This has already had a negative impact on the current budget and could very well create a program for future budgets worth hundreds of millions of dollars. Needless to say, we are moving forward with legitimate caution as we cannot risk putting that size of a hole in the current and future state budgets.”
Walker must make a decision on whether or not to approve the Kenosha casino by Feb. 19, 2015.
