Mashantuckets take expertise of emerald tower to Kansas

Author:
Updated:
Original:

MASHANTUCKET, Conn. - Casino politics can be just as convoluted in Kansas
as in the landscape dominated by the emerald towers of Foxwoods, the
Mashantucket Pequot Tribal Nation is learning in its foray into a joint
venture on the prairie.

The owners of the Oz-like Foxwoods Casino Resort recently partnered their
expertise with the Iowa Tribe of Kansas and Nebraska to develop a $270
million gaming resort near Wichita, but the trip was the reverse of
Dorothy's return home from her adventures. The Pequots landed in the middle
of a confusing jostle involving the governor, the state Legislature, a
consortium of two other local tribes and the state's "racino" interests.

To the intense frustration of the Iowa Tribe and its local partners, Kansas
Gov. Kathleen Sebelius had been ignoring their proposal while pushing
alternate gaming plans to save her budget. Dismissing the idea as "a
dream," she refused to open negotiations on a new off-reservation gaming
compact. When the Foxwoods contract was announced April 15, its impact was
something like Dorothy's house coming down in the Munchkin village.

"Now all of a sudden it was not merely the dream of a tribe that didn't
have the financial means or the expertise to pull it off," Gary Armentrout,
chief development officer of Foxwoods Development, told Indian Country
Today. With the backing of the Mashantuckets and the resources of their
highly successful Foxwoods Casino, the project became highly viable "and
needed to be taken seriously."

The plan is part of a growing national cooperation among Indian tribes to
spread gaming expertise and profits. The Mashantucket Pequots of
southeastern Connecticut, proprietors of Foxwoods, "the world's largest
casino," have established the Foxwoods Development Co. with a base in St.
Louis, Mo., to pursue ventures across the country. The Kansas announcement
followed earlier contracts with the Chukchansi Tribe in California and the
San Juan Southern Paiute Tribe in Arizona.

The Iowa Tribe operates a small casino on its 2,100-acre reservation
straddling the Kansas-Nebraska border. It is planning a major
off-reservation casino resort in Park City.

But Sebelius, it turned out, was preoccupied with two other competing
gaming plans, both of which are heading for a crucial state legislative
vote. One, derived from a bill she submitted last year, would set up
state-owned casinos at pari-mutuel horse and dog tracks. The second would
place a joint tribal casino next to a major shopping mall and NASCAR track
in Wyandotte County, near Kansas City, Kan., and the much larger Missouri
city of the same name.

Sebelius signed a tribal compact for the $210 million Wyandotte County
casino last October with the Intertribal Gaming Management Consortium,
composed of the Kickapoo and the Sac & Fox tribes. The tribal consortium
has vehemently opposed the bill for state-owned casinos, which would be a
first in the United States. (It is based on the Canadian model, in which
the government contracts the casinos to private managers for a management
fee.)

Although the part-time Legislature is not currently in session, a standing
committee held hearings April 21 on the inter-tribal compact and it heard
an earful from supporters of the Iowa Tribe.

Former Wichita Mayor Robert Knight, the main local backer of the Iowas,
denounced the governor's refusal to negotiate with them and called on the
Legislature to hold up the intertribal compact until the Iowas got equal
terms. With the Foxwoods name behind him, he apparently made his point.

On April 25, Sebelius finally met with Iowa Tribal Chairman Leon Campbell
and his backers, including Foxwoods' Armentrout. "After the 40-minute
session," Campbell said, "Governor Sebelius approached the meeting very
open-minded and supportive of gaming in Kansas, and we came away feeling
confident that we will find common ground despite minor differences."

Armentrout said he expected two parallel compacts to result, each giving
the state about $50 million in revenue-sharing. In return, each project
would have exclusivity for slot machines in a 100-mile radius.

Exclusivity or some other major economic benefit is an essential condition
for revenue sharing under the Indian Gaming Regulatory Act (IGRA), which
expressly prohibits state taxation of tribal casinos. It would apparently
have the effect of killing off the plan for state-owned casinos by keeping
them out of the state's two main population centers.)

In spite of some reluctance in the Legislature, the state has a powerful
incentive to move forward in a Kansas Supreme Court order to revise its
school funding. If current plans don't satisfy the court, say some budget
analysts, casino revenue sharing could be politically the easiest
alternative.

The governor also demanded a show of local support for the Iowa Tribe's
project. Her spokesmen have argued that the Wyandotte County Unified
Government has backed the inter-tribal compact, but that local governments
around Wichita are split. Although host Park City is for it, the Wichita
City Council and Sedgwick County Commission have hung back.

Knight said after the meeting: "We are all in agreement that this project,
and gaming in general, must have wide support by the public at large. We're
going to work hard to meet or exceed the governor's expectations."

Armentrout added that polls are showing support at 65 percent or more in
south-central Kansas for the Iowa tribe's plan. "Clearly the south-central
market is not at present being served," he said.

"We are pleased by what we see as forward momentum," Campbell said after
the meeting. "We realize that this is a complex process and we took steps
forward this morning."

Armentrout said the two tribal casinos would not hurt each other. "The
market is clearly large enough for both," he said.

He said he hoped to see both compacts approved by the Legislature "by the
end of June."

"If it doesn't happen this Legislature," he said, the Mashantuckets "will
have to go back and rethink" their involvement.