MERCER: If new casinos approved, gambling explosion awaits

• Bob Mercer

Bob Mercer

Talk about it

PIERRE — We have entered a new phase of legal gambling in South Dakota. This summer, the Flandreau Santee Sioux Tribe is pursuing a casino in Sioux Falls, by openly dangling the promise of millions of dollars for local and state governments.

Details of the deal sought by the tribal government came to light recently when its president, Anthony Reider, met with the Legislature’s interim committee on state-tribal relations.

No mention of the tribe or the topic appeared on the committee’s agenda for the June 27 meeting.

Instead, Reider and Steve Christensen, general manager for the tribe’s Royal River Casino at Flandreau, stepped forward during the committee’s scheduled period for public testimony.

Reider told the legislators how Royal River’s business is down about 40 percent since the new Grand Falls Resort casino opened in Iowa a short drive east of Sioux Falls.

“Right now we’re looking to lose $10 million a year from Sioux Falls, the Sioux Falls area,” he said.

What the tribal government wants is state approval to build a casino near the intersection of I-29 and I-90 at Sioux Falls on a piece of land that would cost $27 million.

Reider said the tribal government has a $300 million line of credit waiting to use for the project.

A tribal casino at Sioux Falls would be a first in South Dakota. To this point, tribal governments have been required to operate their casinos within the recognized boundaries of their jurisdictions.

In fact, to avoid state jurisdiction, every tribal government to this point in time has avoided opening casino businesses in Deadwood.

Deadwood is the only place where casino gambling is allowed under the South Dakota constitution. South Dakota voters approved the constitutional amendment in 1988.

The tribes, because of federal law, have been allowed to operate casinos in their reservation areas as a result of the Deadwood exemption.

By keeping the tribal casinos solely in tribal areas, the tribal governments haven’t been required to share any of the casino revenue.

The Sioux Falls deal sought by FSST would change all that.

President Reider suggested establishing a system of revenue sharing for a Sioux Falls casino, similar to the way state and local governments receive money from Deadwood casinos.

Reider said the state and local share from a Sioux Falls casino would “conservatively” total $6 million to $10 million annually.

The offer by a tribe of money is new in South Dakota. There have been tribal contributions to community programs, but those took the form of grants.

If Gov. Dennis Daugaard agrees to a Sioux Falls deal, his decision would open the door for other tribal governments to pursue off-reservation casinos in South Dakota.

It isn’t much of a stretch to foresee that people in every South Dakota community of any size will want their own gambling casino as a form of tourism development.

We also could expect to see tribal casinos spring up in communities along the two interstate highways.

Saying no would become difficult and likely would prompt lawsuits in federal court.

Thus we could have a situation where the Cheyenne River Sioux Tribe, for example, would operate off-reservation casinos but continue to be opposed to a casino within the reservation.

Of the nine federally recognized tribes in South Dakota, the Cheyenne River Sioux are the only one that doesn’t operate a casino.

Then there is the Blood Run question.

Hundreds of years ago, thousands of native peoples gathered there from throughout the region. The state Division of Parks and Recreation is working on a development of the site south of Sioux Falls.

Tribal people who could claim ancestral lineage to those who stayed at Blood Run would present an interesting argument in federal court about whether they have the right to pursue casinos in South Dakota, too.

Likewise for tribes who now are based outside of South Dakota but whose ancestors were regular visitors to the Black Hills.

Lawyers who specialize in gambling law might consider those situations to be far-fetched. But in gambling, as in political money, the old rule applies: Water finds the crack.

In South Dakota we have a history of water finding the crack when it comes to gambling.

It’s why video lottery is so widespread. It’s why there are tribal casinos.

It’s why we have repeated expansions of the definitions for legal gambling devices, as new technology moves beyond old law.

So here’s the two-part question: What end would this expansion of gambling serve and at what cost?

Sometimes you wonder whether South Dakota should place a state-run casino on the campus of each public university and public technical institute.

The campuses have the workforces. The campuses could receive the profit.

The connection would be clear, rather than washing the money through a series of private hands, taking a cut for the state treasury and then using the government’s share as part of the general budget.

Why, we already have a University Center campus at Sioux Falls at a prime location, near the intersection of I-90 and I-29. And Southeast Technical Institute is just down the street.

Think of the possibilities. Good, bad and otherwise.

Because if South Dakota is truly considering going down this road to community casinos, we should do it with eyes wide open, and with maximum benefit in full sight.

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