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April 23, 2014

War Games in Wisconsin (2013 Style) Re: Indian Tribes

Wisconsin is home to 11 recognized Indian tribes. It is a fact that 11 tribes will not unanimously agree on all issues. It also is a fact that not all issues require unanimous agreement. However, Governor Scott Walker has created a unique situation regarding off-reservation approvals by stating his own rule which states that any proposed off-reservation casino project must be supported by every tribe in the state.

The “Walker Rule” is a major modification of the statutory process established by Section 20(b)(1)(A) of the Indian Gaming Regulatory Act (“IGRA”). The law states that the Governor has an unrestricted power to approve or veto any off-reservation tribal casino. There is no standard of reasonableness imposed by the law and, indeed, the prevailing interpretation of that provision is that the Governor’s decision can even be arbitrary and capricious, no matter how unfair.

The issue is red hot because the Menominee Indian Tribe wants to develop a casino on land in Kenosha, which is both off-reservation and conveniently located near Milwaukee. And it is of current interest throughout Indian Country because the Governor has stated that he will veto the project if the Menominee Tribe cannot secure tribal unanimity by Friday, October 25, 2013. (The date was previously set for Tuesday of this week, but was deferred for three days only last Monday.)

The project is strongly opposed by the Forest County Potawatomi Tribe, which operates a casino and bingo hall in Milwaukee, which it estimates could lose up to 40 percent of its current revenue. In addition, the tribe estimates that up to 3,000 jobs in its gaming facility could be lost as a direct result of the proposed competition in Kenosha.

The United States Department of the Interior has approved the off-reservation acquisition pursuant to IGRA Section 20, putting the ultimate decision on the Governor’s desk. The Assistant Interior Secretary for Indian Affairs has been quoted as stating that the Department has reviewed the Potawatomi claims and concluded that the projected adverse impacts simply will not happen. Several gaming industry experts also question the Potawatomi projections in light of an estimated market population of 3 million people, a market that likely would generate an estimated $1 billion in annual gaming revenue.

A second tribe has voiced opposition to the Kenosha project, but the project impact on its casino revenues is much less than those estimated by the Potawatomi, and it has been less visible as the decision day approaches. The remaining eight tribes seem to have stayed away from the debate.

Friday is “D-Day” for the Wisconsin Indian community. The Kenosha project would represent a substantial addition to the gaming opportunity in the immediate market area, and it would generate sorely needed revenue for the Menominee tribal members who are reported to suffer widespread poverty and unemployment. Indeed, Interior expressed concern about the tribal economic problems in approving the trust acquisition.

Governor Walker controls both the process and the future of an impoverished tribe, and he has unfettered statutory discretion to make the decision. The economic facts and projected positive impacts normally would indicate a decision in favor of the Menominee. However, if the two opposing tribes stand their ground and Governor Walker invokes the “Walker Rule” that he articulated, Menominee will lose.

© Copyright 2014 Dickinson Wright PLLC

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Expertise in development of economic projects, including casinos, for Indian tribes in America and Canada

Served as legal counsel to both unrecognized and federally recognized Indian tribes, providing counsel on Indian gaming law and Indian lands as well as a wide range of state and federal taxation issues unique to Indian tribes, individuals and lands

Served as Special Counsel for Gaming to the cities of Detroit; Buffalo, NY; Battle Creek, MI; Lima, OH; Middleborough, MA; and Barstow, CA as well as Calhoun County, MI, DeKalb County, IL, and seven...

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