Minnesota Gov. Tim Pawlenty (R) lashed out at the state's gaming tribes on Tuesday for rejecting his demand for $350 million in casino revenues.

In his third State of the State Address, Pawlenty referred to the "better deal for all Minnesotans" he began seeking a year ago. "My hope was that tribes with large casino gaming interests would make a fair payment to the state in exchange for being granted a monopoly and other benefits," he said.

But with little to show except some angry tribal leaders, Pawlenty was blunt about the proposal's chances of success. "It appears they're not interested in such an agreement," he said.

Instead, Pawlenty said the state was forced to "explore other alternatives," including an urban casino proposed by three remote tribes whose members suffer from high poverty and unemployment rates. He didn't offer specifics but said an announcement was forthcoming.

"I will note that we are pleased with our discussions with the tribes in northern Minnesota that represent 85 percent of Native Americans in our state," the governor said.

The speech drew a strong reaction from the Minnesota Indian Gaming Association, which represents 11 tribes with financially successful casinos. The organization opposes the urban casino, saying it will end up hurting the rural tribes.

Pawlenty has "invited Las Vegas gambling giants into the state, deliberately inflamed anti-Indian resentment for political gain and cynically exploited the unmet needs of the 35 percent of Minnesota Indians who actually live on the three northern reservations," MIGA said in a statement.

Tribal leaders have openly battled Pawlenty over the past year, accusing him of distorting the Indian gaming industry. Helen Blue-Redner, the chairwoman of the Upper Sioux Tribe, challenged him to a public debate while Melanie Benjamin, the chief executive of the Mille Lacs Band of Ojibwe, blasted dashed off a series of letters deploring his "hostility" and "smear campaign" towards the tribes.

Pawlenty has done little to assuage the concerns. He pressured tribes to open their books, threatened to allow non-Indian gaming and appeared in election ads that criticized the tribes. When he asked tribal leaders to meet him to discuss gaming, only two -- the ones who want the urban casino -- showed up.

As recently as last week, Pawlenty was cool to the urban casino sought by the White Earth, Red Lake and Leech Lake bands. He went to the White Earth Reservation to meet with the tribes but said afterwards he still wanted to renegotiate gaming compacts with the members of MIGA. The White Earth and Red Lake bands do not belong to the organization.

It's not clear what may have changed his stance but Pawlenty has held meetings over a possible casino at the Mall of America in the Twin Cities, The Minneapolis Star Tribune reported today. The mall and the three tribes share the same lobbyist.

Indian gaming has brought tremendous benefits to Minnesota. Tribal casinos employ more than 13,000 people with an annual payroll of nearly $250 million. Casino revenues have built schools and health care facilities, and have reduced poverty and unemployment among tribal members.

But the White Earth, Red Lake and Leech Lake bands, the largest tribes in the state, haven't had as much success due to their rural locations. They have been pushing for a Twin Cities casino for years.

An urban, off-reservation casino would have to be approved by the federal government. The Bureau of Indian Affairs has to take into account potential impacts on other tribes, giving MIGA a big say in the decision.

A similar proposal created such an intense debate among tribes in Wisconsin and Minnesota that it was the subject of Congressional investigations during the Clinton administration. The BIA's denial of the casino came after tribes made significant contributions to Democratic interests.

The Bush administration has sent mixed messages about off-reservation gaming. In letters, Interior Secretary Gale Norton has express concern about the spread of gaming into urban areas but has never acted to stop it because the deals have been supported by state officials. In one case, the BIA rejected a gaming compact due to opposition from other tribes and top Republicans.

Read the Speech:
PDF: State of the State address (January 18, 2005)

Relevant Links:
Minnesota Indian Gaming Association - http://www.mnindiangaming.com
White Earth Band - http://www.whiteearth.com
Red Lake Nation - http://www.redlakenation.org