Friday, Feb. 6, 2004 | 9:26 a.m.
ST. PAUL, Minn. -- Call it either a threat or a bluff, but Gov. Tim Pawlenty suggested on Thursday that Indian tribes with casinos had better share some profits with the state or prepare for more competition.
In perhaps the most provocative segment of his State of the State speech, Pawlenty noted that while he's opposed expanding gambling in the past "we need to recognize that times have changed."
He said the compacts the state negotiated with tribes nearly 15 years ago "do not reflect current circumstances" and "we need to explore a better deal for Minnesotans."
His aides refused to elaborate on what he meant, although they said Pawlenty met with tribes early last week. There are a number of bills pending to give the state money by sanctioning private casinos.
"There'll be more news in the next week or two," Pawlenty spokeswoman Leslie Kupchella said. "Stay tuned."
John McCarthy, executive director of the Minnesota Indian Gaming Association, downplayed Pawlenty's comments, saying he doesn't see them as a direct threat.
"He has been actively seeking input from the tribes on where gambling is going in the next two years," he said.
McCarthy said he doesn't think Pawlenty will seek to reopen the compacts -- something that the tribes would have to agree to.
But he said the administration is trying "to explore situations with the tribes," adding of the tribes, "I think they're open to other options."
Sen. Dick Day, the top Senate Republican and a proponent of adding slot machines to the Canterbury Park horse track site, said he hopes Pawlenty really intends to back new casinos.
"I think he's finally telling them: 'Hey guys, I'm going to go full throttle so I wish you guys would come forward with some money and then you can keep your monopoly.' " Day said.
This year, the Canterbury plan and at least four other casino proposals are being pushed by Republican legislators.
The so-called racino bill that passed the House last year would allow slot machines at Canterbury, but give tribes with casinos the ability to block the expansion by giving 6 percent of gross receipts to the state.
It has not received a vote in the DFL-led Senate, which has traditionally aligned with the tribes on the issue.
Two dozen states have gambling compacts with tribes, according to the National Conference of State Legislatures, and seven states have agreements to share revenue. Many other states require that the compacts be renegotiated periodically. Minnesota does not.
Minnesota was the first state to negotiate gambling compacts with its 11 tribes, in 1989 and 1990, and gets only about $150,000 annually from them to cover the costs of some state regulation.
New compacts recently signed in Wisconsin are expected to bring the state more than $100 million per year.
If he switches, Pawlenty's approval of more gambling would head against a tide of his own words. Last year, he strongly questioned the worth of the racino bill, asking why, if the government wants to get involved in private businesses, it doesn't open a government-run Wal-Mart.
"I call racinos the flavor of the day," said Sebastian Sinclair, a gambling industry analyst and president of Christiansen Capital Advisors. "It seems to be the politically palatable form of gambling now."
He also said it's not unprecedented for a tribe to offer a state cash beyond what's demanded in their compact. He said one Connecticut tribe has continued to pay the state 25 percent of its casino revenue -- the most generous arangement in the nation -- even though it is no longer technically required to.
Melanie Benjamin, the chief executive of the Mille Lacs Band of Ojibwe, said in a written statement that she hopes to learn more about Pawlenty's plans.
"While we are open to considering any proposals the governor may have, it is important that he understand that we have long-standing policies and deeply held interests to defend," she said.
The DFL' House minority leader, Rep. Matt Entenza, said Pawlenty's been "wishy washy" on gambling. "I don't see a reason to renegotiate the compacts but it's always good for people to talk."
House Speaker Steve Sviggum said getting tribes to kick in additional money "would seem to be a reasonable approach to the situation."
For his part, Day hopes to see a new racino. "I think the governor would rather have the money. I prefer to have both the money and the casino and not worry about someone else giving it to us."
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