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Archive for Wednesday, October 20, 2004

Casino precedent

A compact that would allow a new casino in Wyandotte County sounds like a good business deal for the state, but officials should look carefully at the long-term implications of the plan.

October 20, 2004

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Prospects of the state receiving as much as $50 million a year from a tribal casino in Wyandotte County may be putting a sparkle in the eyes of some state officials, but the details of this proposal, as well as the long-term implications, raise many questions and warning flags.

The Kansas governor's office has reached agreement on a gaming compact with the Sac and Fox Nation and Kickapoo tribes to build and operate a 250-room hotel and 80,000-square-foot casino near the intersection of Interstates 70 and 435 in western Wyandotte County. Both of the tribes have reservations in Kansas, but this casino would be the state's first off-reservation casino.

In exchange for this special privilege, the two tribes agree to give the state 12 percent of the first $100 million of adjusted gross gaming revenue, 22 percent of the revenue beyond $100 million and shares of revenue from Keno games and the tribes' existing casinos. To obtain its full share of that revenue, the state agrees to limit state-owned and operated slot machines and video lottery terminals to 500 within a 100-mile radius of the new casino and to 1,500 at all other locations across the state.

The state also agrees not to offer "concurrence" to place land in trust for any tribal casino within 100 miles of the Wyandotte County casino.

At first glance, this looks like a good deal for the state. Not only would it supply revenue and jobs for the state, but it offers some basis to control additional casinos in Kansas. The federal government's involvement in American Indian gaming operations, however, raises the question of whether the state can make good on the terms of the compact.

Federal law requires states to negotiate gambling compacts with American Indian tribes. If the federal Department of the Interior approves the Kansas compact with the Sac and Fox and Kickapoo tribes, is it also saying that it is legal for the state not to consider other compacts? The Delaware tribe of Oklahoma also is seeking federal approval to acquire land near Bonner Springs for a casino.

The governor's statement that she will only consider compacts with tribes that have reservations in the state (Kickapoo, Sac and Fox, Iowa and Prairie Band Potawatomi) may shield the state in the Delawares' case, but what if the Potawatomi also want to negotiate a compact for a casino within the 100-mile radius? Would the federal government back up the state's agreement with the Kickapoo/Sac and Fox, or would it say the state still had to enter into compact negotiations with the Potawatomi?

Because the new casino would be the state's first off-reservation land, it could set a precedent for other locations in Kansas. The market for gambling in the state would exert some control over how many casinos are developed, but if the state agrees to put nonreservation land into trust for a casino in Wyandotte County, it could open that same door for other locations across the state. Developers interested in additional casinos in Wichita or Dodge City may welcome that news, but state officials need to think carefully about the precedent they would set by approving the Wyandotte County deal.

The compact the governor will present today to the Kansas Legislature's Joint Committee on State-Tribal Relations faces many hurdles. In addition to required approval by the Legislature and the Department of the Interior, other American Indian tribes already have announced their intention to challenge the compact in court. Given the long-term, statewide implications of the proposed compact, state officials would do well to examine this agreement carefully and not be too easily swayed by the promise of additional revenue for the state treasury.

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