The $70 Million Plus Cost in Suspended Revenue Sharing Payments to the State of Wisconsin

A Post-Script to Wisconsin v. Ho-Chunk Nation: The $70 Million Plus Cost in Suspended Revenue Sharing Payments to the State of Wisconsin

4/16/2008
Peter J. Kulick In the last edition of Gaming Legal News we discussed the recent decision of the 7th Circuit Court of Appeals in Wisconsin v. Ho-Chunk Nation, __ F.3d __, 2008 WL 114887 (7th Cir. Jan. 14, 2008). Ho-Chunk Nation avoided directly deciding whether revenue sharing provisions between tribes and states pursuant to Tribal-State Gaming Compacts are valid under the Indian Gaming Regulatory Act. Revenue sharing payments, or lack thereof, were, and still remain, a central issue in the dispute between the Ho-Chunk Nation and the State of Wisconsin - and likely will continue to be a contentious issue when disputes arise under their Compact. A recent audit by the Wisconsin Legislative Audit Bureau monetizes the cost of the dispute to Wisconsin. The audit of the Wisconsin Department of Administration, Division of Gaming covers a three year fiscal period for the 2004-05, 2005-06 and 2006-07 fiscal years. The total revenue sharing payments from Indian gaming received by Wisconsin for each of the fiscal years during the three year audit period were: Fiscal Year - Revenue Sharing: 2004-05 - $27.4 Million 2005-06 - $118.7 Million 2006-07 - $49.8 Million The drop in revenue sharing from the 2005-06 fiscal year to the 2006-07 fiscal year is a surprising result, especially because the national trend for revenue sharing payments is an upward trend. The explanation for the drop in Wisconsin's revenue sharing payments can be easily explained: the Ho-Chunk Nation has ceased making revenue sharing payments during the three-year audit period as a result of its Compact dispute. What is the cost to Wisconsin? Although the Ho-Chunk Nation made a $30 Million good faith deposit during the 2005-06 fiscal year, the Wisconsin Legislative Audit Bureau puts the cost of the loss revenue at approximately $70 Million. The audit of the Wisconsin Department of Administration, Division of Gaming is available on-line at: www.legis.state.wi.us/lab/reports/08-4full.pdf
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