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Wisconsin is projected to receive at least $70 million less over the next two years than originally expected in gaming revenue from Wisconsin’s tribal nations, according to a study from the Wisconsin Policy Forum.
The study attributes the downward trend to the pandemic, which has casinos temporarily closed or operating with capacity limits.
The state of Wisconsin outlaws most kinds of gambling. But tribal nations are sovereign, and write their own rules for gambling on their land. Ari Brown is a researcher with the Wisconsin Policy Forum. He says the revenue generated from gaming that goes to the state of Wisconsin is used for Tribal programs.
“Essentially, anything that the tribal governments get from those games that they don’t have to pay back to those who win is something considered ‘net win,’ and every tribe pays a small proportion of their net win back to the state,” said Brown. “That goes into two different buckets, the first of which is direct appropriations to individual state departments. Among the bigger ones are tourism, health, education, justice, so those appropriations go to fund individual programs directly in the communities of tribal residents. The second big bucket would be the state’s general fund, so anything left over after those appropriations are fulfilled goes to the general fund of the state budget, which is the state’s largest source of revenue.”
But that revenue from casinos is now one-sixth of what it was before the pandemic hit, and the loss in revenue has impacted Wisconsin’s budget.
In 2019, tribal casinos contributed about $29 million to the state of Wisconsin. In 2020, that number was only about $5 million.
Those tribal gaming payments fund myriad state programs. The largest is tourism and travel marketing, but gaming payments are also used for culturally-sensitive programs, such as tribal language revitalization grants.
Marlon WhiteEagel is president of the Ho-Chunk Nation. He told the Wisconsin State Journal last June that the revenue loss from casinos delayed approval of the Ho-Chunk government’s next budget.
Meanwhile casino workers have lost their jobs. While it was closed between last March and June, the Potawatomi Hotel & Casino in Milwaukee – the state’s largest casino – laid off about 1,600 workers.
While Wisconsin continues to vaccinate its residents, the casino revenue the Wisconsin state government lost due to the pandemic might need to be paid back. Brown says that there was a precedent for this back in 2014.
“There’s a history of tribes making up payments in the future when they were unable to pay or there’s a contract dispute and they didn’t pay in one year,” said Brown. “In 2014 and 2015 there was a dispute with the Forest County Potawatomi, in 2014, they repaid their amount in 2015. Potentially, things could go really well. We could get a huge proportion of the state vaccinated, people are back in casinos, they’re excited to go out and visit those casinos again, and we have record revenues in casinos next year. So that’s certainly one possibility, and then the tribes are repaying larger amounts in future years, so that’s one possibility.”
Brown says that tribal budgets are not publicly available, and that they still do not have the full picture of the impact of lost casino revenues on tribal governments.