Deficit-plagued Legislature more likely to embrace gambling proposals in 2011

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Republican state Rep. Tom Hackbarth proposes to expand gambling in Minnesota almost every year, but his bills have been repeatedly shot down by Democratic leaders in the Legislature and a Republican governor who was less than excited to see them on his desk.

This year Hackbarth might get his wish. A historic $6 billion deficit, coupled with a likely partisan split between the legislative and executive branches, stands to push the state toward gambling revenues as a means of patching the budget. And with the Minnesota Vikings’ lease up at the end of 2011, the team will be lobbying hard for money to pay for a new, nearly $800 million stadium. Dedicated revenues from gambling expansion were floated as an option last session.

“Chances are better now than they’ve ever been,” Hackbarth said. “[A Vikings/racino proposal] would probably be one of the first bills I’d write and introduce.”

Other gambling proposals will also be on the table, including expanded use of electronic pulltabs and gaming in bars and restaurants, an effort led by a newly formed organization that is boasting of an extra $630 million in state revenue every two years.

And DFL Gov.-elect-apparent Mark Dayton has floated a few new ideas of his own. He supports building a new casino at the Mall of America or at the Minneapolis-St. Paul International Airport, and likes the idea of a state-owned casino.

Gambling, however, is an issue that has divided both Democratic and Republican Legislative caucuses. Many Democratic leaders have long held the line on expanding gambling – including former Speaker Margaret Anderson Kelliher and former Senate Majority Leader Larry Pogemiller – but there have been a few defectors who have either proposed or supported expanded gambling bills.

This year Republicans have control of both the Senate and the House after a stunning upset on election night, and they are bringing about 50 new freshmen legislators to the Capitol. Very few know where new legislators stand on the issue, and returning Republican incumbents have been split over the years. Some Republicans support the idea as a way to bring extra cash into the state’s hemorrhaging coffers, but more conservative members are against gambling outside of the tightly regulated Indian-owned casino system.

But former Republican Senate Minority Leader Dick Day, who is now a lobbyist for RacinoNOW, agrees with Hackbarth, saying there’s “no doubt” racino and other gambling initiatives chances at the Legislature are in better shape after the election. “We used to have people like Pogemiller, [Tony] Sertich and Ann Rest in control, and they wouldn’t even give us a fair hearing, but that’s not going to be the case this year,” he said.

Passing a proposal

Some recently announced Republican committee chairs in the House have shown support for gambling proposals, including the new chair of the influential Ways and Means Committee, Rep. Mary Liz Holberg, and Hackbarth, who chairs the Environment, Energy and Natural Resources Policy and Finance Committee.

In a recent Star Tribune article, Holberg, a 12-year legislator from Lakeville, said she would consider using money from a racino to help fund a Vikings stadium. “I don’t have a problem with racino,” Holberg told the Star Tribune. “I think, one way or another, it’s going to be addressed this session. The question is whether or not it’s resolved. It’s not going to go away.”

Hackbarth said any gambling proposals would likely end up in the State Government Finance Committee, to be chaired by Denny McNamara. McNamara, who could not be reached for comment, has said in the past that he favors renegotiating the state’s tribal gaming pact and is open to the possibility of a state-run casino.

Day said most of the recently announced committee chairs are supportive of a racino, and he estimates that he has the votes to pass a racetrack gambling bill in the Senate, where Majority Leader Amy Koch has supported the idea in the past. He acknowledged that he’s about 20 votes shy in the state House. He sees the Vikings’ stadium as the best way to push the idea.

Soon-to-be Speaker of the House Kurt Zellers has opposed racino in the past, but said in a recent interview with Capitol Report that he is a lifelong Vikings fan and wants to keep the team here. He expects it to come up later in the session, but added that state money is an unlikely option.

Minnesota Vikings lobbyist Lester Bagley said he and his colleagues are in the middle of picking up the pieces from last session, and are working to put a package together for legislators. He said he is open to any solution – including expanded gambling – that state legislators can agree on to fund the stadium.

“The 2011 session is a critical session,” he said. “We respect state’s priorities but we also need to protect the franchise.”

Not a “deficit remover”

Day noted that advocates for Indian-owned casinos saw some key allies in the Legislature tossed out of power in the primary and on Election Day. “I think the biggest loser was the Indian casino cartel,” he said.

The groups donated the most to Kelliher before she lost in the primary election to Dayton, giving her bid a total of $15,000. The tribes even threw $2,000 the way of DFL gubernatorial primary candidate Matt Entenza, and $1,250 to GOP nominee Tom Emmer. Dayton received only a single $1,000 contribution from tribal groups.

Tribal PACs did little to hedge their bets against a possible Republican takeover of the Legislature. The nine tribal political action committees put nearly $1.2 million into elections this year – nearly all of it to DFL party units and candidates, according to campaign finance reports. Most of the cash went to the House and Senate DFL caucuses, with more than $350,000 going to the Senate DFL and about $397,000 to House Democrats. Republicans received paltry sums by comparison, with the House Republican Campaign Committee taking in about $33,000, and the Republican Senate Victory Fund getting about $14,500 from tribe-affiliated groups.

Minnesota Indian Gaming Association Executive Director John McCarthy admits his side lost key players in the Legislature, but said he doesn’t see impending doom in the new legislative makeup, especially with a large crop of first-termers coming in.

“Some of them, I suspect, are very suspicious of gambling,” he said. “This is also a group that is somewhat independent. They campaigned on smaller government and a different way of doing business, and I don’t agree with the idea that they are going to come in and just become a part of the existing power structure.”

McCarthy said they are preparing information and plan to meet with legislators before new gambling proposals hit the committee table. He knows some of the Republicans who supported expanded gambling now have committee gavels, but he thinks things will be different now that they are the dominant force in both chambers. “There is a platform in their party that says they are opposed to gambling,” he said. “It’s going to be more difficult to make those votes in the spotlight.”

McCarthy plans to drive home the message that gambling proposals outside of regulated Indian facilities could bring the activity into neighborhood bars and restaurants and is nowhere near the “deficit remover” some tout it to be.

“While I’m not saying $100 or $200 million over the next biennium is nothing, it’s not at all what is needed to take care of the deficit,” he said. “People pushing it make it sound like the ultimate solution. There will have to be a lot more done than just that.”