MIGA Disputes Casino Figures

5 October 2004

ST. PAUL, Minnesota – (PRESS RELEASE) -- Officials of the Minnesota Indian Gaming Association today blasted Governor Pawlenty for deliberately inflating tribal gaming revenue estimates in order to justify his continuing efforts to force tribes into revenue-sharing agreements.

A recent report by the Minnesota State Lottery estimated gross tribal gaming revenues at $10 billion, but noted that after prize payouts, net proceeds are estimated at between one and two billion before operating expenses.

In his weekly radio broadcast and comments to state media last week, Pawlenty frequently cited the $10 billion figure, without clarifying that the figure represents total amounts wagered and not the net proceeds to tribes.

John McCarthy, Executive Director of the Minnesota Indian Gaming Association, said, "The Governor claims that tribal gaming in Minnesota is a $10 billion industry. After prize payouts, we estimate that Minnesota tribes generate about one-tenth of that-maybe $1 billion, and that's before operating expenses are paid." McCarthy noted that the remaining net revenues are spread among eleven tribal governments.

McCarthy's estimates were supported by former federal gaming regulator and University of Minnesota law professor Kevin Washburn, in an opinion piece published October 1 in the Star-Tribune. According to Washburn, "the governor's figure contrasts markedly with objective data from the federal agency in Washington that regulates Indian gaming." Washburn said the federal figures are based on actual financial audits of Indian casinos.

McCarthy also criticized the report's authors for deliberately omitting specific information about the number of states that do not have revenue-sharing agreements with tribes. "According to the report, this information is difficult to come by," he said. "Oddly enough, we've had no difficulty finding it. Of the 22 states with compacts, the majority -- 14 states including Minnesota -- have no revenue-sharing provisions." He said the others are Colorado, Florida, Iowa, Kansas, Louisiana, Mississippi, Montana, Nebraska, Nevada, North Carolina, North Dakota, Oklahoma and South Dakota.

"Federal law requires that tribes use gaming revenues to meet their obligations to their own citizens and communities," McCarthy said. "Just like the state, tribes have to pay for schools, health care, social services, senior services, water and sewer, roads, law enforcement, public safety, and so on. That is the purpose of Indian gaming-to fund reservation communities, not to offset state budget deficits. Every dollar that goes to the state is a dollar the tribes can't spend providing services for their own people."

"We find it very disturbing that the Governor is trying to sell his 'squeeze-the-Indians' agenda by promoting misinformation and making the tribal gaming pot look much larger than it really is," McCarthy said. "He's deliberately inflating those numbers so people believe the tribes can afford to bail out the state. In reality, that's just not the case."

According to McCarthy, Governor Pawlenty may be trying to insulate himself from the political fallout of expanding gambling, a step many of his conservative constituents oppose, according to recent polls. "If he can go ahead and expand gambling, but blame the tribes for having to do it, he satisfies his political base, he avoids raising taxes, and he plays into the anti-Indian sentiment that's already out there."

"What we hear the Governor saying is that he doesn't want to raise taxes-except on Indians," McCarthy concluded. "He wants people to keep more of their money-except for Indians. He wants to offer tax breaks for businesses that create jobs-except for Indians. It has taken decades to build a positive relationship between the tribes and the state. Governor Pawlenty seems determined to set that relationship back fifty years or more."