Nebraska likely to approve Class III gambling

David Melmer
10/27/04

LINCOLN, Neb. - With two initiatives on the Nebraska ballot, and good
chance that one will be approved, the state's tribes are eyeing Class III
gaming after years lobbying and negotiations with the state.

No matter which initiative is approved, Class III gaming will be open to
the four tribes located in the state.

Advocates of initiatives that would legalize Las Vegas-type gaming in
Nebraska are not pre-dominantly focused on Indian gaming, but are designed
to generate tax revenue and to stop the flow of revenue across the borders.

Tribes have worked for years to negotiate compacts with three different
governors with no success, yet Nebraskans across the state supported the
tribes' right to have casinos.

Gaming has opened in every state surrounding Nebraska, not all of it Indian
gaming. Reluctant supporters of the initiatives use the revenue factor as a
platform. Most of the casino parking lots in surrounding states are packed
with Nebraska license plates.

Taxes on gaming revenue are proposed with both initiatives on a two-tier
scale. For gaming revenue that is lower than $15 million per casino the tax
rate would be 36 percent. Gaming revenue over $15 million would be taxed at
20 percent.

The two initiatives on the ballot conflict. Amendment 3 calls for just two
casinos. The legislature would be left to come up with details like the
actual tax rate and where the casinos would be located.

Initiatives 417-420, incorporated into one ballot initiative, would allow
for two casinos in Omaha, allow for small casino operations with video
poker machines in bars and restaurants, provide for slot parlors along
Interstate 80 and limit the number of slot machines and video terminal
machines to 4,900.

In either case, the tribes of Nebraska win. With either initiative's
approval, Class III gaming will become legal.

"Passage of one of them looks good," said James Snow, vice chairman of the
Winnebago Tribe.

The Winnebago Tribe owns WinnaVegas Casino in Iowa. Iowa opened Class III
gaming in 1990 with river boat gambling.

The Winnebago Tribe also opened a Class II gaming operation in Nebraska in
anticipation of the ballot initiatives' passage, and will then upgrade that
casino to a Class III operation.

Snow said the Iowa casinos including WinnaVegas, gain most of their revenue
from Nebraska patrons. He said WinnaVegas will have a reduction in revenue,
but the casino has its base of clients.

Casinos on the South Dakota side of the border also have Nebraska
clientele. A casino that could stand to lose the most would be Fort Randall
Casino, owned by the Yankton Sioux Tribe. When that casino first opened
after the Indian Gaming Regulatory Act was approved in 1987, patrons were
bused from Omaha and some as far away as Lincoln.

The opening of Iowa gaming hurt Fort Randall, but because of the rural area
in South Dakota and Nebraska many of the regulars continued to come by bus
and car from the small, nearby towns. Tourism and recreation is also a
major source of revenue for Fort Randall. It is located on Lake Francis
Case which was created by the huge, earthen Fort Randall dam. Hunting and
fishing are major attractions in the area.

The Rosebud Casino, located on the Nebraska-South Dakota border has
developed plans to expand on tribal lands that extend across the border
into Nebraska and increase the number and types of gaming devices.

Trent Poignee, general manager of the Rosebud Casino said they expect to
see a decrease in traffic at the casino, how much, he couldn't say.

Rosebud doesn't attract many people from the larger population areas of
Nebraska. But should the gaming initiatives pass, Rosebud casino would be
able to offer games such as roulette, additional card games and other games
not allowed in South Dakota.

One of the big winners would be the Santee Sioux Tribe. For years they have
battled the Nebraska governor's office to meet at the compact negotiating
table. The tribe has suffered federal court orders to close its small Ohiya
casino and has been subjected to fines and bank account seizures for the
past seven years.

The tribe opened a Class III operation in the small village of Santee to
exercise their sovereign rights. They now operate a Class II gaming
facility, with a restaurant and bingo facility, a motor fuel station and
plans for an RV park and other business ventures with the help of revenues
from the small casino operation and the help from sister gaming tribes.

As for negotiating a compact with the state now: "We have a secretarial
procedure and all we need to do is add that type of gaming to it. I feel we
don't have to go back to the governor. I don't see logically why we would
go back to the governor to expand on what is in the procedures," said Roger
Trudell, chairman of the Santee Sioux Tribe.

"They didn't want gaming tribes to game, so I can't imagine them coming
after us for more money," Trudell continued.

The Oglala Sioux Tribe owns the Prairie Wind Casino on the western edge of
the Pine Ridge Reservation and a high percentage of its customers come from
Nebraska. Because of the western-most location with no large communities
nearby the Oglala casino may not be affected too adversely, officials said.

The Oglala Sioux Tribe also has claim to lands by treaty across the border
in Nebraska. No officials were available to comment on what plans they may
have for any expansion into Nebraska.

Snow said over the years many attempts to acquire approval for Indian
gaming just missed by one or two votes in the legislative committees. This
time advocates got enough signatures to put the initiatives on the ballot.
Neither initiative on the Nebraska ballot focuses on Indian gaming, but if
either one is approved it will open the doors to Class III gaming.

The tribes will still need to enter into a gaming compact with the state,
according to the Indian Gaming Regulatory Act. The stumbling blocks to any
compacts has been the fact that Nebraska had not legalized gambling.

Should Initiative 417-420 be approved it would have a large impact on the
state of South Dakota. State video lottery multi-game machines are all over
the state. Every small town and large community has convenience stores,
free standing bars that have video lottery machines, and restaurants
bearing the name casino are located on many street corners throughout the
state. Video lottery generates some $100 million per year for the state.

Tribes with gaming in South Dakota are preparing to renegotiate their
gaming compacts. According to rumblings from the state, additional slot
machines may be approved, but it appears the state will be looking
seriously at some type of fees from the gaming revenues. There has been
little public disclosure of what the tribes or the state will bring to the
table.

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