MIGA TO SUPPORTERS: SPEAK OUT AGAINST SLOTS IN BARS

The Minnesota Indian Gaming Association (MIGA) has issued an Action Alert asking tribal employees, vendors and supporters to urge their state senators to oppose SF174 and SF 308, two bills that would authorize slot machines in more than 2,500 bars and restaurants across Minnesota.

MIGA issued its alert today in response to last week's introduction of two neighborhood gambling bills in the Minnesota Senate. MIGA Executive Director John McCarthy said either measure would do immeasurable harm to Indian gaming and change the face of Minnesota neighborhoods forever.

SF 174, authored by Sen. Michelle Fischbach (SD14) would authorize up to ten slot machines (VLTs) in any liquor-licensed establishment that now offers charitable gambling, more than 2,500 locations statewide. Electronic bingo and pulltab machines would also be permitted.

SF 308, authored by Sen. Ingebrigtsen (SD11), would authorize up to 5 slots in these 2,500-plus locations.

Both SF 174 and SF 308 would mean a huge expansion of gambling in Minnesota. The number of gambling venues would skyrocket from 19 destination casinos to more than 2,500 locations statewide. The number of slot machines available to gamblers would explode as well—from around 21,000 now to nearly 50,000, depending on which bill ultimately wins passage. It’s a regulatory and enforcement nightmare.

Under either bill, Indian gaming would suffer serious harm. Minnesota’s rural casinos, especially those in more remote areas, rely largely on their local markets for survival. If hundreds of mini-casinos open their doors in those markets, the tribes will suffer huge revenue losses. That means job cuts, cutbacks in vendor spending, tax revenue losses, and increased costs for counties and the state. The state couldn’t pick a more destructive approach if it deliberately set out to wipe out the gains tribes have made over the past two decades.

McCarthy also noted that Minnesota bars and eateries will be installing machines, not hiring more people. Neighborhood gambling is not labor intensive, so the jobs lost at tribal casinos will never be offset by new job creation in bars and restaurants.

"There's no such thing as a free lunch," McCarthy concluded. "Legislators need to hear from the thousands of people who work in tribal gaming and government. They need to hear from the thousands of Minnesota companies that sell goods and services to tribes. They need to hear from elected officials who recognize the value of Indian gaming to their local economies. There's a cost to putting these tribal businesses at risk--a huge cost. Our legislators need to hear that side of the story."

RACINO NO JACKPOT FOR MINNESOTA, MIGA SAYS

Racinos at Canterbury Park and Running Aces Harness Track offer no jackpot for Minnesota, says MIGA Executive Director John McCarthy in an opinion commentary published in today's Bemidji Pioneer.

McCarthy accused racino advocates of using "bogus arguments and inflated claims" to mislead Minnesotans about the supposed benefits of the racino proposals. He was responding to a previously published commentary by John Derus, a former elected official currently employed by the Running Aces Harness Track to promote its racino effort. Here's what McCarthy wrote:

"The February 11 column by John Derus, a paid advocate for the racino, presents bogus arguments and inflated claims about the benefits of racinos at the state’s two racetracks. What Derus doesn’t talk about in his column is the high cost of this proposal to Indian tribes, rural economies and ultimately, the state itself.

"Racino proponents claim that their proposal to add slots to racetracks will generate $125 million a year for the state. What they don’t tell Minnesotans is that this amount represents less than two-tenths of one percent of the state’s $6.2 billion deficit. That isn’t even a drop in the bucket; it’s a drop in the ocean.

"They also fail to mention that slot machine revenues have fallen far short of projections in most states, including Colorado, Connecticut, Illinois, Indiana, Maryland, and Montana. Those states are now scrambling to plug the budget holes left by these shortfalls. Gambling is an unreliable source of budgeted revenue.

"Predictably, Derus hauled out the old “level playing field” chestnut. Whenever tribes have had something of value, the dominant society has destroyed or seized it in the name of “leveling the playing field.” Here we go again. Tribes have barely had an opportunity to get in the game, and others are looking to change the rules of the playing field and undo their progress.

"Derus claims that the state would get “100 percent of the new gaming tax.” That’s very deceptive. In fact, the racino is likely to be taxed at a rate of 30 to 50 percent, depending on the proposal. The remaining 50 to 70 percent of revenue will go to the wealthy investors that own the two tracks. In the case of Running Aces, those shareholders don’t even live in Minnesota.

"In contrast, tribal casinos are taxed at a rate of 100 percent, meaning that all casino revenues go to tribal governments to pay for housing, human services, health care, education, water and sanitation, law enforcement, courts, tribal administration and infrastructure. Those investments in community benefit all of Minnesota, and not just a group of out-of-state investors.

"As far as regulation, tribal casinos are infinitely more regulated than Minnesota’s racetrack industry or the state lottery. Congress made tribes the primary regulators of their own gaming operations, but they are also regulated by Congress, the Department of the Interior, the National Indian Gaming Commission and the State of Minnesota under the compacts.

"The claim that slots at the track will create “thousands of new jobs” across the state is patently false. In fact, the opposite is true. Slots at Running Aces or Canterbury will merely shift jobs from rural Minnesota to the metro area.

"A racino at Running Aces Harness track, for example, could cut revenues at Mille Lacs Band facilities up to 40 percent, potentially leading to the loss of as many as 1200 jobs in rural Minnesota. A track at Canterbury Park would force Mystic Lake to lay off at least 30 percent of its workforce, possibly more. Even if every laid off employee were hired by the track, we’re still looking at no net job gain for Minnesota.

"In addition to cutting jobs, tribal casinos affected by racino competition also would be forced to reduce their spending on goods and services, costing Minnesota tribal vendors as much as $200 million a year.

"It’s unfortunate that racino proponents are not giving Minnesotans the full story. Racinos will not solve our budget problems, create new jobs or generate new economic activity. They’ll only shift jobs and divert income from rural Minnesota to the metro area. That’s not a jackpot. It’s a hijacking."

MIGA RESPONDS TO STATE CASH CARD CONCERNS

The member tribes of the Minnesota Indian Gaming Association (MIGA) are taking necessary steps to ensure that the cash cards given to public assistance recipients in Minnesota to purchase food and necessities cannot be used for cash withdrawals at tribal gaming properties.

MIGA Executive Director John McCarthy said that state officials have never approached the tribes with any concerns about potential misuse of the state-issued EBT cards at tribal casinos.

“The tribes were unaware of this issue until it surfaced in the media over the last couple of days,” McCarthy said. “Now that we’ve been given a heads-up, MIGA tribes are working with their ATM vendors to identify a solution. We appreciate being made aware of the problem. We would not want to facilitate anyone's misuse of public assistance.”

McCarthy said the solution likely involves making technical adjustments so that all casino cash machines are able to recognize and block the EBT cards.

STATE CASINOS ADD TO GAMBLING ADDICTION, SAYS CBS "60 MINUTES"

The Sunday, January 9 edition of the CBS news program "Sixty Minutes" aired a segment linking the increased availability of slot machine gambling to increased gambling addiction, and Pennsylvania Governor Ed Rendell didn't seem a bit happy about it.

Rendell reacted explosively when interviewer Leslie Stahl pressed him on whether his state was exploiting low-income and vulnerable people by promoting casino gambling.

"You just don't get it. You are a simpleton," growled Rendell, his teeth clenched. Rendell insisted that slot machine gamblers would merely find other ways to gamble if they didn't have ready access to slots.

However, compulsive gambling experts such as Drs. Robert Breen and Henry LeSeuer told Stahl that slot machines trigger a far more intense addictive effect than other forms of gambling.

Dr. Howard Shaffer, who heads up the Harvard Medical School Division on Addictions, emphasized that a small percentage of all gamblers are affected by addiction. The vast majority of players are able to enjoy gambling as entertainment without losing control over their behavior.

Two former gambling addicts told Stahl that they began to develop gambling problems when they gained greater access to slot machines.

Minnesotans are concerned about making gambling problems worse with expansion, according to MIGA Executive Director John McCarthy. "Our research shows that the biggest concern of those who oppose expansion is gambling addiction. They understand that more access to slot machines is likely to translate into more gambling addiction."

McCarthy said that a majority of Minnesotans believe we have enough gambling already. "With the limited gambling we have now, we've been able to strike just the right balance. If the state goes into the slot machine business and casinos start springing up all over Minnesota, that balance will be lost forever."

GAMBLING EXPANSION NO SOLUTION TO BUDGET DEFICIT, LEECY SAYS

On Saturday, January 1, the Duluth News Tribune featured a guest column by Bois Forte Chairman Kevin Leecy. Leecy, who also serves as Vice Chairman of the National Indian Gaming Association (NIGA), challenged the idea that gambling expansion promises a solution to the state's budget deficit. Here's the full text of Chairman Leecy's column:

The Minnesota Legislature will convene Jan. 4, facing one of the largest budget shortfalls in the stateʼs history. Gov.-elect Mark Dayton and a handful of legislators have indicated they will propose expanded gambling as a solution to Minnesotaʼs budget woes.

Unfortunately, this so-called solution may do more harm than good. Expansion supporters have been promoting racinos at the stateʼs two racetracks for several years. Both Canterbury Park in Shakopee and Running Aces Harness Track in Anoka County would compete head-to-head with existing tribal casinos.

Despite perceptions to the contrary, the Shakopee Mdewakanton Sioux Communityʼs casinos, Mystic Lake and Little Six, are not immune to competition. A racino at Canterbury Park could cost Scott Countyʼs largest employer nearly 30 percent of its business, leading to employee layoffs, benefit reductions and cuts in philanthropic giving.

The Mille Lacs Band of Ojibwe is even more vulnerable to a racino at Running Aces Harness Track. Mille Lacs officials have projected losses of 40 percent to 50 percent at their casinos in Onamia and Hinckley. Again, losses of this magnitude could mean the elimination of as many as 800 jobs. This would be a huge blow to Mille Lacs and Pine counties, where the tribe is again the largest employer.

At best, the racinos will only transfer jobs from rural Minnesota to the metro area for no net job gain. Since these job shifts will be permanent, the result will be a net loss for rural communities.

Many people have asked me how the racinos would affect our casino, Fortune Bay, located way up north on Lake Vermilion. They donʼt realize how much of our business comes from the Twin Cities. Currently, people who want to gamble in the Twin Cities must drive to Mystic Lake. If they had another option in the north metro, many would stop there and never make it all the way to Fortune Bay.

Racino supporters also fail to recognize that reduced business at our northern casinos translates into economic hardship for the hospitality industry in our region. Why would legislators or our new governor consider anything potentially harmful to northern Minnesotaʼs resorts, restaurants and lodging facilities that rely on tourism for survival?

Even more concerning, the authorization of privately owned racinos would open the door to unlimited gambling expansion. Once states get a taste of gambling revenues, theyʼll want more. There is not a single state in the U.S. that hasnʼt continued to expand gambling beyond its first venture. Racinos lead to slots in the bars; slots in the bars lead to state-owned casinos; casinos start with slots and then add table games, roulette and craps. It never ends. Thereʼs
never enough money for legislators to spend.

Despite this runaway expansion, virtually every state with gambling is facing huge budget shortfalls. In Pennsylvania, Maryland, Delaware, New York, New Jersey, Nevada and Missouri, states that relied on gambling to balance the books, lawmakers and government leaders are finding they bet on the wrong form of economic stimulus.

I canʼt help but wonder why some Minnesota legislators have decided that the solution to the stateʼs budget problem must come at the expense of tribal members and employees. Minnesota has more than 4 million residents. Shouldnʼt all of us be asked to share the pain?

Expanding gambling will not generate meaningful new money for Minnesota. Instead, the racinos will merely take $100 million out of rural Minnesota and divert it to two privately owned businesses and the black hole of state government. In this case, the shell game puts the burden squarely on the backs of Minnesotaʼs 55,000 tribal members and 12,000 tribal employees. Thatʼs an average contribution of nearly $1,500 from each of those 67,000 people.

Perhaps the state should just ask for donations from civic-minded citizens. If each Minnesotan contributed $25, the Legislature would have its $100 million—and tribes wouldnʼt face the loss of their economic resources yet again.

CANDIDATES AIR VIEWS ON GAMBLING EXPANSION

The three major candidates for Governor of Minnesota are making their views known on gambling expansion, and the news isn't good for Minnesota tribes.

MIGA Executive Director John McCarthy said that Independence Party candidate Tom Horner, Republican nominee Tom Emmer, and DFL standard-bearer Mark Dayton are "only looking at the up-side" of opening state-sponsored casinos in Minnesota, without looking at the cost to Indian tribes and rural communities.

"Each of the candidates has a different message about expansion, but all three have indicated that they would consider, if not actively seek, legislative approval for a racino or a state-run casino in the metro area," McCarthy said. "They're looking for easy answers to the state's budget crisis. Unfortunately, they're not giving voters the whole story."

MIGA tribes continue to oppose expansion on several grounds, McCarthy said, but the most significant is the potential impact on rural casinos and the communities that depend on them.

"When rural tribes sneeze, the surrounding counties catch pneumonia," McCarthy said. "If the state approves slots at the harness track in Anoka County, the Mille Lacs Band could lose from 35 to 50 percent of its business. That could mean layoffs of anywhere from 600 to 1,300 employees. Can you imagine what that would do to the economy of the counties around those casinos?" The Mille Lacs Band's tribal lands are located in Mille Lacs, Pine, Aitkin and Crow Wing counties.

Once the state opens the door to further expansion, it's difficult to imagine where it will end, said McCarthy.

"It's almost impossible to stop the spread of gambling once it starts," he concluded. "States never cut back on gambling; they only add more and more."

For information on how to get involved in the fight against gambling expansion, click on "Action Center" on the MIGA website.

RACINO PROPOSAL FAILS IN 2010 MN LEGISLATURE

Despite aggressive last-minute political maneuvers by racino supporters, the Minnesota Legislature adjourned on May 17 without passing the racino proposal or any other measure to expand gambling in the state.

Minnesota Indian Gaming Association (MIGA) Executive Director John McCarthy said that opposition to the racino cut across party lines, and reflected a wide range of concerns with gambling expansion.

"Many fiscal conservatives think gambling revenue just gives government permission to spend more money," McCarthy said. "Others worry about the slippery slope--opening the door to unlimited expansion. Some people are concerned that expanding gambling will increase compulsive gambling problems. And, of course, our tribal members and employees were very worried about their jobs and the future of their communities."

McCarthy said hundreds of tribal members and employees signed up as part of the MIGA Action Network on the association's website. Their email messages to legislators helped turn the tide against the racino proposal, he said.

"The racino issue hasn't gone away," McCarthy concluded. "They'll be back next year, and the pressure will be even greater because the state's budget deficit will be even worse in 2011. We'll have to fight the battle all over again. But we're ready."