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1436, 24 Jan 15

Walker Denies Kenosha Casino

Put me firmly in the camp that is angry at Walker for this decision.

KENOSHA — Gov. Scott Walker’s rejection of the proposed Kenosha casino Friday prompted anger from Racine- and Kenosha-area officials.

In rejecting the casino, Walker cited the project’s potential hit to the state budget, which he has said is due to compacts former Gov. Jim Doyle negotiated with the Forest County Potawatomi. The compacts called for the tribe to be reimbursed for losses incurred because of a new casino.

Assembly Speaker Robin Vos, R-Rochester, blamed Doyle for creating a “no-win situation.”

But Vos, who is close with the governor, also said Walker made the wrong decision.

On the merits, Walker got it wrong. While there remained a risk that the state would have been held liable for the Potawatomi’s losses per their compact, the BIA has already ruled that provision unenforceable. It is likely that the courts would rule in the BIA’s favor. And even so, the Menomonee had already agreed to make the state taxpayers whole in this eventuality. The risk to the taxpayers was more than acceptable given the opportunity to create thousands of jobs and billions of dollars of economic development for the state.

Walker blew the chance to bring jobs and economic development to Wisconsin. The question is “why?” and none of the possible answers look good for Walker.

The reason for the decision given by Walker is that the risk of losing money from the Potawatomi was too great. First, as I said above, the risk was more than acceptable given the potential reward. Second, it shows that Walker prioritized state tax revenue over jobs and economic development in the private sector. That’s not a conservative position. Even if it came to pass that the state did lose $100 million from the Potawatomi – offset by whatever revenues are generated by the new casino – it represents a tiny fraction of a $30 billion budget. And with the stated goal of reducing the size of government, Walker should have no problem dealing with a decline in revenue from the Potawatomi – assuming he’s sincere about his pledge to shrink state government.

If the stated reason for Walker’s decision is the real one, then it was just a stupid decision. But more troubling are some of the other possible reasons. Both Iowa social conservatives and allegedly Sheldon Adelson, the billionaire casino magnate who has opposed the Seminole casinos in the past, have urged Walker to kill the Kenosha casino. With Walker wanting to run for president, it sure appears that he let his personal political aspirations influence his decision to the detriment of the welfare of Wisconsin.

But even if Walker did make his decision based on politics, it was a stupid political decision too. Walker’s claim to fame is that he is a tough conservative who is not afraid to take on the tough fights. Well, he buckled on this decision. “Unintimidated?” hardly.

Also, Walker stakes his political reputation on being a champion of private sector job creation. With this decision, he has given up that plank. He has little ground to stand on criticizing opponents of the iron mine, Keystone pipeline, or other major projects when he single-handedly turned away thousands of private Wisconsin jobs. And every time Walker complains about job creation, his opponents can rightly point to this decision as hypocritical.

Finally, Walker used the excuse that it was former governor Jim Doyle’s horrible compact with the Potawatomi that forced this decision. While it is true that Doyle signed a sweetheart deal that put the taxpayers at risk and made this decision somewhat challenging, it’s a weak excuse. Walker has been governor for 4 years. He is well past the point of being able to blame his predecessor. He was elected to make changes and move Wisconsin forward – not make excuses and whine about the decisions of previous governors.

This further undermines Walker’s argument for being president. If he should win the White House, he will be succeeding perhaps the most destructive president we have had in a very long time. There will be huge messes left for him to figure out. How is he going to deal with Obamacare? ISIS? Immigration? Massive deficit? Etc. Is he going to just blame Obama and say he can’t do anything about those messes? If he can’t handle a bad compact with a tiny tribe in Wisconsin, how is he going to handle Putin? Again, Walker’s claim is that he is “unintimidated,” but he has severely undermined that image.

Whether you look at it based on the merits or the politics, Walker got this very wrong and the state of Wisconsin has missed out on a rare opportunity for a massive infusion of economic development.

Unfortunately, he can’t be reached for comment this weekend because he’s campaigning for president in Iowa. By such actions he is showing us his priorities.


1436, 24 January 2015


  1. Steve Austin

    Owen, I’m not happy about this either. That said, I’m seeing a knee jerk reaction by a number of conservatives that have not read the compacts signed and agreed to by Doyle and the Poto’s.

    The language in these are ridiculously tough against the state and require the state to reimburse the Poto’s for any losses suffered should a competing casino be authorized. There are also sections that allow for the Poto’s to get a full refund of any payments they made to the state under the compact in prior years if certain provisions are violated.

    Let’s do the math here. The Poto’s currently take in $350 million per year of revenue. Hypothetically they lose $100 million a year in business to Kenosha. That’s $100 million a year the State would have to pay the Poto’s, not once, but PER YEAR, every year.

    Now I’ve heard a lot of nonsense that the Kenosha casino would easily make that up. Maybe, maybe not. The Kenosha casino actually has to make money to recover the cost of building it, pay employees and provide competing payouts to attract clients. They may still be wildly profitable even after paying Wisconsin $100 million a year or they may not. And that assumes the damages are limited at $100 million. Let’s say the Poto’s lose more money per year to Kenosha or let’s say Illinois later decides they are losing too much money Wisconsin and authorize a giant casino in Gurnee that blocks the Chicago money from coming north.

    These numbers being tossed around as to risk to the state are always mentioned as “maybe $100 million” when in reality over the life of the compact we could be talking a billion or two, which might involve the taxpayers of Wisconsin writing out $100 to $200 million dollar checks each year to the Poto’s. That outcome doesn’t sit well with me.

    I’d be fine with all this if the matter had been firmly resolved in Federal court in favor of the State, but it hasn’t been resolved. And we’ve all seen liberal judges like Judge Barbara Crabb (who started all this) toss out rulings from left field. Do you really see a judge like her saying she thinks the Poto’s case should be thrown out of court?

    Again, I’m not happy about this because the Poto’s were granted by Doyle a damn monopoly to print money in exchange for some campaign contributions. But I’d like to see people actually analyze these compacts and the different revenue numbers rather than toss out slogans they heard from Belling that “we should have done this. There is no way the State loses money here. We’d never lose a lawsuit, etc, etc.”

    There is serious money at stake that potentially might not be recouped from the Hard Rock casino. All I ask is that people read the compacts and understand the real numbers involved. If you feel the same way afterwards, that is your right.

    Walker has been a good steward of my money since elected in 2010. He’s been a good steward here as well even though we wish the outcome were different.

  2. Boyd McBoyd

    Could care less about this decision. Adding a casino is not incremental revenue growth – you’re cannibalizing it from another location – either the location in Milwaukee or the casinos in Joliet and Hammond. For last ten years, US-wide gaming revenues have remained flat, and it’s an oversaturated industry where the trend has been to close casinos rather than add them.

    Somewhere down the line, you’d just have another casino pop up – likely in the north Chicago suburbs – that would have cannibalized revenue from Kenosha.

  3. dad29

    Really don’t have a dog in THIS fight–but this sentence: “Is he going to just blame Obama and say he can’t do anything about those messes?” reminded me of the way he simply shrugged his shoulders at the Crabb ruling on homosex marriage.

    And, yes, his pResidential aspirations are showing. A lot.

  4. Kevin Scheunemann

    I don’t care one way or other, but approving it was a big gamble for the state.

    It seems the FL tribe was only willing to indemnify losses owed by state to Potawatomi going forward not litigation risk or retroactive withheld payments to state by Potawatomi.

    Had Doyle not negotiated such a dipstick compact with Potawatomi, then I’d be mad at Walker. these jobs would have been like Democrat job creation, at huge subsidy by the state.

    He made the only reasonable decision to state finances. the other way the state could have won a little more revenue or lost big…probably lost.

  5. Dave

    “Whether you look at it based on the merits or the politics, Walker got this very wrong and the state of Wisconsin has missed out on a rare opportunity for a massive infusion of economic development.”

    So encouraging a bunch of social security recipients to blow their check at the casino is now a massive infusion of economic development?!? That is not the kind of economic development that will make a dent in our massive trade deficit. It’s obvious Walker made this decision because it had less likelihood of damaging his presidential aspirations. However meaningful economic development for the US that positively impacts the middle class will take place only if we can abandon the free trade treaties such as NAFTA, impose import tariffs, and draft tax policy that hurts corporations that do not support American jobs and favors corporations that do.

  6. Boyd McBoyd

    The permanent jobs are low-skill, service jobs – waitresses, card dealers, attendants. Casino workers face a higher risk of heart disease and lung cancer, due to the levels of cigarette smoke. With the morbidity/mortality rates, those workers face a much more difficult time obtaining things like life insurance. Low wage, high turnover and higher risk of terminal illness – sounds like something Wisconsin taxpayers shouldn’t be shouldering.

    Say what you want about Sheldon Adelson, but he runs one of the least-leveraged and most profitable gaming companies. He’s fighting internet gambling, which would kill most brick-and-mortar casinos. If he’s saying a Kenosha casino is a bad idea, it’s probably advice worth heeding. The last thing Kenosha needs in 10-15 years is to look as run down as Atlantic City.

  7. Steve Austin

    I spent 45 minutes of my life I can’t get back last night trying to read the Poto’s compact at the State website. Unfortunately they do not have the entire document with the amendments in one document. Just a number of amendment documents that cross reference the original. Hard to read and I don’t want to invest more time trying to stitch together things. If one of you has the entire document at a link, would love to see it.

    My takeaways though from reading it were that we’ve still got 15 years until Doyle’s deal runs out. At that point the State can terminate the deal, but Doyle gave the Poto’s the ability in 2030 to run to a judge to keep the deal in place if the State is acting unfairly in terminating.

    There also was a provision that if the State violates the deal, the Poto’s have the right to get refunded back ALL monies they’ve paid since inception of the deal. That was ugly. Just by rough math, we might be talking $500 million right there. And a judge like Barbara Crabb could literally interpret that to go back to the compact’s first version in 1992.

    It got worse, as I noticed that the Poto’s paid a lot more money to the State under the deal from 2003-2010 while Doyle was needing it. One amendment referenced special payments to be earmarked for UW Madison operations to save Doyle’s bacon on a budget hole that year I’m presuming. After all the special Doyle payments, the State’s percentage of the take actually declined to 6.5% of the net from 2012 onward. Just in time for Doyle to be out of office.

    Really sad how bad he scammed the taxpayers.

  8. jimspice

    Glad to see you coming around. Maybe now that your eyes are open to the possibility that Mr. Walker in not not squeaky clean, you’ll be able to consider past acts we’ve been pointing out — the fake Koch phone call, the divide-and-conquer kiss, the secret router for campaigning by felons on the taxpayer dime … This guy does NOT have your best interests at heart, and is driven only by personal aspirations.

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