Off-rez resorts might shake up Kansas casinos

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MASHANTUCKET, Conn. - If the Legislature moves on compact approvals, Kansas
tribes would be the latest to join a long-breaking new wave in Indian
gaming.

One compact now before a legislative committee, and another that backers
hope will be quickly negotiated, share a common element. They would move
tribal gaming off fairly remote reservations and next door to major
population centers and tourist attractions.

The idea is nothing new. The framers of the Indian Gaming Regulatory Act in
1988 clearly had it in mind in a loophole that is now generating
controversy. But the Kansas tribes have added a novel twist: they are
offering to close their Class III on-reservation casinos seven years after
their urban gaming resorts got up and running. The provision allows their
backers to argue they would actually reduce the number of tribal casinos in
the state, from four to three.

Of course, this is a symbolic concession to anti-gambling sentiment, a
significant element in Kansas. By any measure, the urban casinos would
vastly expand the volume and accessibility of gaming. But the proposals
make gaming much more palatable to state politicians. They would generate
up to $100 million of revenue sharing for the state budget, which needs it
for education finance reform. Under existing compacts the four tribal
casinos pay the state nothing.

The restriction on casinos also makes a neat counterpoint to the main
competition: a bill that would set up five state-owned casinos and slot
parlors at another five pari-mutuel dog and horse tracks. A new coalition
called "Kansas Wins" had hoped to push that measure through the state
Senate in its late April "wrap-up" session.

The tribal strategy in Kansas acknowledges a long-standing fact of Indian
gaming. A few big tribal casinos have become extravagantly rich, but the
majority is struggling along. The three keys to success are, yes, location,
location, location. But the hunt for a good location runs into a whole set
of new controversies.

The federal government has the last say on urban casinos, since it has to
take land into trust for the tribal owner. Interior Secretary Gale Norton
has already made it plain that off-reservation casinos make her
uncomfortable, although so far she has let them go through.

In response to complaints from tribes fighting off competitors, Congress is
focusing on the issue. Sen. John McCain, R-Ariz., chairman of the Senate
Indian Affairs Committee; and U.S. Rep. Richard Pombo, R-Calif., chairman
of the House Resources Committee, have hearings planned or underway. (Pombo
held his second session on "reservation shopping" on April 27.)

The complaints to Congress often conflate the "off-reservation" issue with
the more extreme case of "out-of-state" tribes. Some New York state Indians
have watched in horror as groups that relocated a century and a half ago
accept settlements of their land claims that compromise sovereignty and tax
rights the local tribes have fought mightily to preserve.

But the Kansas proposals show the economic logic of the issue. Each of the
four federally recognized tribes owns a Class III casino on its territory.
According to a long-time observer, a previous Kansas governor floated the
idea of an urban casino jointly owned by the four. Two - the Kickapoo Tribe
of Kansas and the Sac & Fox Nation of Missouri, Kansas and Nebraska -
picked up on the idea, forming an Intertribal Gaming Management Consortium
for the Kansas City market.

The Prairie Band Potawatomi already had an elaborate operation, managed by
gaming giant Harrah's Entertainment, and didn't feel the need to go
off-reservation. The Iowa Tribe of Kansas and Nebraska joined with a
development company owned by a former mayor of Wichita to go into the
south-central state market, but couldn't get the attention of Gov. Kathleen
Sebelius until it enlisted the resources of Fox-woods Development Co., an
arm of the financially powerful Mashantucket Pequot Tribal Nation of
Connecticut.

The two urban proposals have similar features. They would both be
destination resorts with hotels that would expand as casino cash flow came
in. Both would be investments in the $200 - $300 million range. Both would
be accessible to major cities and tourist and shopping districts. And both
would be a far cry from the basic tribal casinos now in operation on the
reservations.

The Kickapoo and Sac & Fox have already purchased 80 acres in Wyandotte
County next to a development called Village West, said to be the largest
tourist destination in the state. Village West, which incidentally offers
tax breaks to its businesses, includes a NASCAR track, a Nebraska Furniture
Outlet store, entertainment and restaurants. The Intertribal Consortium
wants to invest $210 million in a lavishly appointed casino and hotel. It
has already spent $12 million on land and design and, said a spokesman, has
a local contractor lined up to work "24/7" as soon as it gets final
approvals.

The Iowa Tribe is proposing a $270 million resort for a town called Park
City "at the gateway to Wichita." It would open in two phases, with
expansion financed by the casino. The first would feature a 300-room hotel,
a 40,000-square-foot convention and conference center, four restaurants and
an event center seating up to 2,800. The second phase would double hotel
capacity, and add an indoor/outdoor water park and a LeMans speedway.

According to Gary Armentrout, executive officer of Fox-woods Development,
once the new casino-resorts took off, the tribes would be willing to shut
down the old casinos on their reservations. "Kansas would go from four to
three Native American casinos," he said.

Similar plans are popping up around the country. Minnesota Gov. Tim
Pawlenty has been trying to entice three of the poorer upstate tribes,
including the Red Lake Chipewa, to form a consortium for a casino in
Minneapolis, although he recently hit major snags. The Tohono O'odham in
Arizona announced plans April 27 to tear down, its original Desert Diamond
Casino, which opened in 1984 as Papago Bingo, and replace it with an $80
million casino-hotel complex.

The new wave of development might make the old bare-bones bingo halls a
thing of the past, unless someone decides to preserve one as a museum.