BIA rejects Menominee Nation off-reservation gaming compact

Artist's rendering of what was to be the Hard Rock Casino in Wisconsin. Image from Casino Kenosha

The Bureau of Indian Affairs rejected a Class III gaming compact between the Menominee Nation and the state of Wisconsin earlier this month, calling the agreement a violation of federal law.

Gov. Scott Walker (R) vetoed the casino in Kenosha on January 23, when he said it posed an economic risk to the state. By that time, however, the tribe had already submitted a compact amendment to the BIA and the agency was required to review it under the Indian Gaming Regulatory Act.

In a March 12 letter, Assistant Secretary Kevin Washburn said Walker's rejection of the casino means the tribe lost its only bargaining chip. Therefore, it was unlikely that the state had offered a "meaningful concession" in exchange for 7.5 percent of the net winnings from the facility.

But even if Walker had approved the project, the compact would not have been accepted by the BIA. Washburn said the amendment imposed an "impermissible" fee by requiring the Menominee Nation to compensate the state for any losses in revenue sharing payments received from by the Forest County Potawatomi Community and the Ho-Chunk Nation.

If the revenue sharing payments from those tribes fell below $37.5 million in any particular year, the Menominees had promised to make up the difference. The BIA considered the arrangement illegal.

"The 2015 amendment obligates the tribe to make mitigation payments to the state to reimburse it for any revenue reduction the state experiences from the tribe opening a gaming facility in Kenosha," Washburn wrote in the letter. "The payments would continue for the life of the tribe's compact. We find that this provision violates IGRA because it imposes an impermissible fee on the tribe."

The Menominee Nation pursued the casino under the two-part determination provisions of IGRA. The law requires the "concurrence" of the state governor where the project is located.

Since 1988, only three tribes have successfully completed both steps in the process. The first was the Forest County Potawatomi Community -- the Potawatomi Hotel & Casino in Milwaukee is about 40 miles from Kenosha.

Bureau of Indian Affairs Documents:
Press Release | Fact Sheet: Menominee Nation Decision | Section 20 Determination: Menominee Nation Off-Reservation Casino

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