Kansas tribal casino compact is announced

John Hanna

Tuesday, Oct. 19, 2004 | 9:01 a.m.

TOPEKA, Kan. -- Two Indian tribes and Gov. Kathleen Sebelius agreed to a compact permitting a large casino in Wyandotte County, guaranteeing the state revenue based on how much it restricts gambling elsewhere, a Sebelius aide said Monday.

Under the compact reached with the Kickapoo and Sac and Fox tribes, the state could receive $50 million or more annually, said Matt All, the governor's chief counsel. Wyandotte County could receive $10 million or more, he said.

However, to get its full share, the state must limit the number of slot machines elsewhere and oppose another new Indian casino within 100 miles if federal law requires Kansas to be consulted first, All said. If the state permitted too much other gambling, its share of revenue could drop to only a few million dollars.

It would be the first Indian casino in Kansas to share revenue with the state. Seven states -- Arizona, California, Connecticut, Michigan, New Mexico, New York and Wisconsin -- have such agreements with tribes, according to the National Conference of State Legislatures.

The Kickapoo and Sac and Fox have proposed building a $210 million casino-and-hotel complex near Kansas Speedway. The state would regulate the operation.

All outlined the compact during a briefing with reporters and said it will be presented Wednesday to the Legislature's Joint Committee on Tribal-State Relations.

Legislators must approve a compact, and the U.S. Interior Department must agree the casino site is eligible for gambling.

"This project will create hundreds of jobs, attract thousands of tourists and generate millions of dollars for the state and local governments," Sebelius said in a statement.

Representatives of the two tribes called the compact fair.

However, Jason Hodges, a spokesman for the Oklahoma-based Wyandotte Nation, called the compact "a pipe dream." He said federal law required the Wyandottes to be consulted because they have land in downtown Kansas City, Kan., within 50 miles of the proposed casino.

The Wyandottes opened a small casino without a compact last year, and the state shut it down in April. A federal judge recently ruled the state had no authority to do so but also said the Wyandottes couldn't reopen their casino.

Hodges said the Wyandottes will sue the Kickapoo and Sac and Fox if they seek federal approval of their casino site.

"If they think we're not capable of dragging this out, they're insane," Hodges said.

Meanwhile, another Oklahoma-based tribe, the Delaware, said it plans to seek Interior Department approval for gambling at another site near the speedway in Bonner Springs, Kan., then negotiate with Sebelius. A Las Vegas development company working with the Delaware expressed disappointment with the compact's market protection provisions.

However, All said: "We think one large, high-quality attraction will more efficiently and more effectively bring people into the region."

All also said Sebelius plans to negotiate only with the four tribes that have reservations in Kansas, all of which are in the state's northeast corner -- the Kickapoo, Sac and Fox, Iowa and Prairie Band Potawatomi.

As for the Wyandottes, All disagreed with their assessment of federal law and said, "I would just suggest the Wyandottes ought to take a different approach."

The four northeast Kansas tribes already operate casinos under compacts signed in the 1990s, though none give the state any revenue.

The Kickapoo and Sac and Fox would continue to operate their existing casinos, in Brown County, for an additional seven years, with Kansas receiving 4 percent of the gross revenue from those facilities.

The state would receive 14 percent of the first $100 million in gross revenue from the new casino and 24 percent of the revenue above that, with 1 percent covering regulatory costs.

Wyandotte County is guaranteed 4.2 percent of revenue.

A Kansas Lottery study earlier this year suggested gross revenue could be $288 million, leaving the state with $56 million after regulatory costs and Wyandotte County with $12 million.

The state would face penalties if it permitted more than 500 state-owned slot machines or video lottery terminals within 100 miles of the new casino and more than 1,500 machines outside 100 miles. Penalties also would apply if the state did not oppose another Indian casino.

Under the Kansas Constitution, only the state or Indian tribes can operate casino gambling. The Constitution also permits a state-run lottery and betting on dog and horse racing.