University Place

Hello, welcome to the UW-Eau Claire campus. This is Native American Heritage Month at UW-Eau Claire. My name, Jim Oberly. I teach in the department of history and in the American Indian Studies program at UW-Eau Claire. There's my email on there if you'd like to write me with any questions that you have. You'll also see the logos of the eleven different-- not just their tribes-- but their casino brands in Wisconsin. They are ubiquitous in the state. You drive on any of our state's major highways and you see the billboards that invite you in. You too can be a winner. How did we get this? Where did these casinos come from? Have they always been here?

That's what I'm here to talk to you today about

How Wisconsin Tribes Got Their Casinos. Now. What do I know about this? I've been studying American Indian history for most of my career at Eau Claire. In the 1990s, I worked on the broad topic of Chippewa treaty rights. Many of you remember that. This is the 1837/1842 treaty. I worked some on that topic and published some on the economic value of the treaties in a book called "The Other Side of the Frontier." I moved on from that to work on the history of the Mohicans, the Stockbridge-Munsee tribe in Shawano County Wisconsin. Published a book,

A Nation of Statesmen

The Political Culture of the Stockbridge-Munsee Mohicans. And I, I still have a deep fondness for, and connection to that tribe. This last decade I've been working more

on another tribe's history

the Oneida tribe of Wisconsin, over by Green Bay. So I continue to be interested in Wisconsin Indian history, American Indian history broadly. But along the way, I had, it was a long time ago. It was 25 years ago. Which is why this is probably a good time to talk to you. Twenty-five years ago I played a very small role in bringing casino gambling to Wisconsin. Of which I am proud. So, there was a case back in 1990. The Lac du Flambeau band of Chippewa Indians, we call them the Ojibwa Indians, the Anishinaabe, and the Mole Lake band, Mole Lake Chippewa communities, Sokaogon Ojibwas filed a law suit in federal court against the governor of Wisconsin, Tommy Thompson, against the attorney general, Donald Hanaway, and various other officials. And that's the case that paved the way for casino gambling in Wisconsin. Before 1990, '91, there were no casinos. There was no Luck of the Turtle. There was none of those other things. That has come since, and I'll tell you about the small role I played. But, 25 years later, it's a good time to reflect on how that came about. Okay, where are we today? Twenty-five years later. We have the same 11 federally-recognized tribes. These are tribes that have political relations with the United States. They deal government to government with the United States. Each tribe has at least one, and some tribes have several casinos. Either on the reservation or sometimes off. And casinos, in case you've never been in one, they offer slot machines, they offer video poker, they offer blackjack, some of them offer roulette, and by my count there's 24 separate casinos in Wisconsin that you can go gamble at if you're of age. I think we've been stunned in this state over 25 years, how much Wisconsinites will gamble if you make it easy for them. Before 1990/91 a Wisconsin resident had to get on a plane and go to Las Vegas or Atlantic City and gamble there and pretty hard to do. Now with 24 casinos, no Wisconsin person is more than a couple hour's drive away and some are minutes away. These casinos have been proved highly successful. Last year, 2014, about 15 million dollars was put into slot machines, roulette tables, Blackjack tables, video poker especially. By my guess about 13 million came back to the gamblers. Those are the people on the billboards with the happy faces. I won at Turtle Lake. I won at Ho-Chunk. Everybody's a winner at Mohican North Star. The tribes kept about a billion dollars of that net. They have expenses of course. Spend it on that. And they paid the state, not corporate taxes, but they pay the state a fee, it's about a 100 million dollars a year or so. So we've had about 25 years of this. We're quite experienced in this state in running casinos and I'll tell you how this came about. Okay, but I'm a historian so we have to go back in time. We can't just go back to 1990. We need to go back to before statehood. I can't stress how important this is to understand the concept of tribal sovereignty. It goes back before statehood. I call it fantasy and fact. On the left we have a fantasy. Some of you have seen this before from our former, our late colleague Ronald Satz, his book on Chippewa treaty rights. He found that territorial symbol of Wisconsin from July 1836 when we separated from the Michigan territory. The fantasy there is it's an empty land waiting to be cultivated by Euro-Americans who are bringing their plow, their sailing ships, their lighthouse, their schools. And there's a character in that fantasy, you see there's an American Indian person who's not fighting, not putting up a defensive struggle. He's just walking west to Minnesota and leaving Wisconsin saying my time is over, yours is here. That's the fantasy, the fantasy of the history of the state, that, it was an empty land just waiting for the people to come from Germany or Poland of Bohemia and resettle it and make it into a neo-Europe. The reality is, we have 11 tribes in the state. All 11 were here. Had been here, had had federal recognition since 1827. You're not gonna-- Wisconsin tried to chase many of them out, and did chase a couple out, but they came back. So the fact is we've had tribes in this state with that federal recognition before there was a Wisconsin. I've gotta stress that. That before there was Wisconsin there were tribes here with political relationships with the United States, and they're still here. Much of Wisconsin would never know that if we didn't have these casinos, so it's an important history. Okay, when did we become a state? 1848. And all these tribes were here all these tribes were signing treaties, agreements with the United States. Sometimes helping the United States in war, sometimes in other ways. And before Wisconsin became a state, the basic tenet of federal Indian policy became law, in a famous Supreme Court case. I'll show that to you right here. There is John Marshall, Chief Justice of the Supreme Court at the lower left. An oil portrait. There is a picture of the Supreme Court today. It wasn't in that building then. It wasn't built till later. But a case came before John Marshall's court, Worcester versus the state of Georgia. Where the Cherokee Nation of Georgia, which had been recognized the year before as a domestic, dependent nation. Said to the Supreme Court, "Tell the state of Georgia to trop, "stop trying to legislate over our tribe, over our lands. "Over our reserve lands." They're not Georgia's lands. Even though they were within the boundaries of the state of Georgia. And the tribe won that suit. The Supreme Court under John Marshall said only the United States can act as the trustee for tribes. In their best, in their interest, the United States can give some orders, but a state such as Georgia cannot tell a tribe what it can do on its own reservation. That's outside of state power. That's the most important concept I want to get across. It's called tribal sovereignty. On reservations tribes are sovereign. Not Georgia, and we'll see, not Wisconsin. So that goes back before statehood. 1832 we were still part of the Michigan territory. We wouldn't be a state for awhile. But the basic law was set before Wisconsin became a state. Sadly Wisconsin forgot that many times. Still sometimes forgets it. But I want people to understand that about tribal sovereignty goes back to, in federal law, back to 1832. Okay, let's go do some Wisconsin history. 1848 Wisconsin becomes a state. There is our state seal. The Indian fellow on there has disappeared. It's like he was never there in the Wisconsin fantasy. Instead we have the sailor and the miner, and we've got the badger, and we've got our motto of Forward. And to come into the United States as a state, the Congress said, you must write a state constitution, have it submitted to Congress, Congress approved it. There is the print version. Constitution of the state of Wisconsin. Madison, in the year of our Lord 1,848. Article one was the bill of rights. And Article two and so forth.

Article four

the powers of the state legislature. The Senate and the Assembly. And there's a puzzling clause in there that the scholars have looked at and wondered. Can you see the fine print? I'll read it. Article four. Legislative section 24. The legislature shall never authorize any lottery or grant divorce. No lottery, no divorce. Divorce one is easier to explain. It's not that there haven't been divorces in Wisconsin. It's rather that until the constitution came along for a couple to get divorced they had to go to the territorial legislature and have a bill introduced John Smith wishes to divorce Jane Smith. It would be debated. Go to committee. Be passed. The governor would have to sign it. It's pretty expensive to get a divorce. And so the constitution is saying legislature you're not going to pass any special bills of divorce. You can pass a law saying county courts can handle divorces, which is the way it's been since 1848. But what's this about a lottery? The state, the legislature shall never authorize any lottery. What was wrong with lotteries? Well, they tended to be, they were very popular in America after the Revolution. Actually more popular before, but especially after. It was an easy way to raise money for public purposes rather than tax people. And we're looking on the screen here of a lottery, I think it's from Pennsylvania, offering a hundred thousand in prizes, 20,000 dollar first prize.

And the beneficiary

the school fund. This is the 1839 version of the bake sale. Of the car wash. And the problem was, you can see in the fine print there, James Phelan and company managers. The problem was too often the first cousin or the brother or the uncle of the lottery managers wound up with the winning ticket. Funny how that worked. And Wisconsin had seen how many corrupt lotteries there were in New York state, in Pennsylvania, and so many of the settlers here, in Massachusetts also. Many of those states had abolished lotteries in the 1830s and 1840s and the settlers here said, "What we know of lotteries is they're corrupt. "So we're going to prevent the legislature "from ever doing that." So that's why that clause is in there. There was a backlash against these fraudulent lotteries. There's a wonderful article published in the Wisconsin Magazine of History some years ago by John Kasparek at UW-Waukesha on the faculty. Void in Wisconsin that covers this history. Okay, if the legislature can't authorize a lottery, what about a private individual? Could we have non-states gambling. What about that? The answer is no. We're a state that for much of its first hundred years of its history as a state said no to gambling whether sponsored by the state, unconstitutional or sponsored by private businesses. So if you've been to the movies you know about the numbers racket in the cities. The policy wheel and so forth it was called. 1883 our legislature passed a statute making in effect, this scratch-off game where you pick a number and if you get it right you win a prize, made that illegal. 1897 horse racing it became illegal to bet on horse racing. Became illegal to bet on baseball in Wisconsin. And as I say, sometimes nothing's new in history. There were people at the time who said, "Well it's not betting if you bet on a horse "and you study the horse and you have some skill there. "It's not betting, it's a game of applied intelligence. "It's a game of skill." Which sounds very much like fantasy leagues today, right?

This is the justification for some of these

that it's not betting, it's applied skill. The legislature would have none of that. They said betting on sports is betting. It's not skill, it's not knowledge, it's luck. So the legislature outlawed betting on sports. Then after World War I reluctantly Wisconsin went along with Prohibition. Tavern owners desperate to attract customers hit on a new-fangled attraction, the slot machine. Come in and drink a root beer or maybe surreptitiously an alcoholic drink under the table and play the slots. And they became hugely popular in Wisconsin, and some of them did pay taxes, so we have some estimates. I think there was ten thousand tavern owners paying taxes on slot machines. Thousands more, you know, not paying. Kasparek estimates there was 45,000 slot machines in the state at the end of World War II. Everyone had them. We see a picture here of some happy beer drinkers and a row of slot machines there. These are pretty primitive machines. They're not really electronic, they're just, you pull a lever and a bunch of gears and wheels spin and three cherries pop up and you win. Or two cherries and a lemon pop up and you lose. And our legislature and our governor, our attorney general, were opposed to that, we're convinced this was bad for our state. And our attorney general played a key role here in giving a legal opinion on slot machines. And what he did is, he said go back and look at the constitution, look at section 24,

Article four

the legislature shall never authorize any lottery. He gave the definition of a lottery. Three points to it.

Number one

you have to pay to play.

Number two

there's an element of chance.

Number three

if you win you get a prize.

Any game that has those three elements

pay to play, element of chance, you get a prize if you win, is a lottery. Even if it comes in a box with one arm and you call it a one-armed bandit. A slot machine our attorney general said was a lottery, and therefore unconstitutional. It took a couple years for the legislature to act on this. They passed a statute saying in effect the attorney general is correct, slot machines are lotteries and district attorneys seeking headlines raided taverns, confiscated slot machines and then invited newspaper photographers to witness the smashing-in of a slots. So you can see the photo here on the screen. There's about 20 slots here. There's a district attorney with a sledge hammer. Doesn't look like he's wielded it too often. Probably not since he stove in a barrel of illegal beer. But he's smashing the slots. We will not be overrun by these. Now it gets more absurd then that. Then taking a few slots away from taverns because again the fear is that Wisconsin will be overrun by these types of machines. As a person born in Chicago, but a long-time Wisconsinite, it's always puzzled me some of Wisconsin's fear of things in Chicago. But the fear was that the mobs, the outfit, the Capone gang. After Prohibition would flood Wisconsin with slot machines, and worse, prepare yourselves, with pinball machines that would corrupt our youth. They would pour their hard-earned nickels into those pinball machines, and the Capone gang would vacuum them up and use them for, oh, purposes too horrible to say. So our fair state made war on pinball. This was my little contribution researching the history of pinball. I stand before you and confess, I love to play pinball. As a graduate student, I should have been in the library studying, preparing, working on my papers, and instead I would go to the student center and play pinball. But pinball has the same three elements as a lottery, correct? You pay to play. And in 1938 you put a nickel in. In my day you put a quarter in. I don't know there's kind of vintage, nostalgia pinball games now. I don't know what they cost. But you put your coin in, there's an element of chance. The ball could go right down the middle or it could go in the gutter. And you'd lose. Or might be able to work the flippers and keep your game alive. And there's a compensation. You get a free game if you rack up enough points. Our attorney general said that pinball is being pushed on Wisconsin youth by the Capone mob and we will not have it because it's a lottery. So pinball was declared illegal and pinball parlors not in taverns, but in soda shops and malt shops, chocolate malt shops here were taken out. Our state Supreme Court said pinball's a lottery. We'll have none of that in this state. Okay. Now we're back to tribal sovereignty. And the idea from the Worcester case that a state cannot prevent a tribe from exercising political power on its own reservation. If slots are illegal in Wisconsin, what about a tribe? Could a tribe offer slot machines on its own reservation? And say, "Wisconsin you can't, you can't touch us." One tribe did so. The Lac du Flambeau tribe offered slot machines after the war. After Wisconsin made them illegal. After the district attorney smashed them with sledgehammers. Up in Vilas County, the Lac du Flambeau tribe opened up in two places slot machines. We have an article here from the Milwaukee Journal. I'll try and read some of the fine print. And you might recognize one or two of the Lac du Flambeau names involved here.

Headline

Slots Seized on Reservation. U.S. Brings Action. Not the state of Wisconsin, U.S. Deputy United States marshals have seized nine slot machines in two raids at the Lac du Flambeau Indian reservation, United States attorney Charles Cachin reported here late Thursday. Deputy Marshal Thomas Madden of Superior and John Hyland of Madison raided five of the machines from Richard Bessoir, 48, a French Indian fishing guide. How interesting he's described as, in 1949 as a French Indian fishing guide. At the Minnow Shack which he operates. The U.S. district attorney reported. The deputies took four machines from the Snack Shack operated by Mrs. Hannah Maulsen. Which some of you would recognize as a prominent family at that reservation. Both places are at the village of Lac du Flambeau. Continued, their story is continued.

The subheading

Cite Chicago Gamblers. J.C, Cavill, superintendent of the Great Lakes Indian agency in Ashland, had protested the Lac du Flambeau tribal council against operation of the machines on the reservation. Ah, we learn the tribal council has approved these as a economic development measure saying, "Wisconsin, you may outlaw these, "but you can't tell us that we can't have slot machines." And the United States protests here. Gambling operations on Indian lands has become a problem of major importance this summer according to H.P. Mittelholtz, district Indian agent. Slot machines have been operating on the Flambeau reservation. On the Menominee reservation. Chicago gamblers have put out feelers to tribal councils on the Bad River, Bad River reservation. The Lac Courte Oreilles reservation in Hayward. The official further said, there's no question but these Chicago gamblers are behind these operations. Authorities have been keeping tabs on known gamblers in the Lac du Flambeau area for several weeks. The check for the-- So Bessoir, he's the French Indian fishing guide. Down payment on the original purchase of his machines came from a Chicago bank.

Quote

if something isn't done to stop this gambling, hoodlums will be running these reservations, the agent said. So Wisconsin's fear of gambling spread to the United States. It was the United States which did have that power to tell Lac du Flambeau's tribal council you cannot offer slot machines in 1949. Not because they're illegal in Wisconsin, not because of the state, but because we are the trustee and we're telling you this is no good for you. Al Capone will simply take-- Al Capone was dead by then, his brother will take you over or whatever. But how interesting that as a matter of economic development the tribal council Lac du Flambeau said, this is something that we could get into. We could operate these, and regulate these and be successful. Okay, eventually Wisconsin eases up on gambling. First we allow raffles. Then in 1973 Wisconsin allows bingo, and the voters amend the state constitution. They say bingo will not be considered a lottery. The state can license it. Religious, charitable, service, fraternal, veterans' organizations, all profits must inure to the licensed organization. No salaries, fees, profits, shall be paid to any other organization or person. Bingo Night at the Knights of Columbus. Bingo Night at the VFW. Bingo Night at the Ladies of the Daughters of the Eastern Star is what the legislature had in mind. But why can't an Indian tribe offer bingo and not just bingo for a couple bucks, why not high-stakes bingo? This is what the Oneida tribe thought,

especially led by two influential women

Sandra Ninham and Alma Webster. They said why can't the tribe offer high-stakes bingo? Bingo with big rewards and draw people, both tribal members and non-tribal members to the reservation to play bingo? And so they did. They opened up the first high-stakes bingo game in this state in 1976 at the Irene Moore Center on the reservation. And there still is bingo 40 years later. It still has a devoted group of players. But this was an attempt to make money for the tribe. An economic development operation. This was not what Wisconsin had in mind when it thought of bingo for the Knights of Columbus. The Daughters of the Eastern Star and so forth. And so the attorney general and the Brown Country

district attorney warned the Oneida tribe

you're in violation of state law. This is for, supposed to be non-profit. It's not supposed to be high-stakes. If you don't shut down we'll come and arrest you and raid you. There was a raid on the bingo hall. The tribe took the state to court, and they won. The same doctrine as all the way back to Worcester in 1832. Worcester v. Georgia which is a state, if a state allows something it cannot tell a tribe that you can't do it. If the state says, "Yes, bingo is okay, "get a license from the bingo division." The state cannot tell a tribe, you can't offer bingo even if its high stakes. Even if you pay people's salaries and all these other things. And the judge said, the basic law here goes back to Worcester in 1832. A state cannot tell a tribe what it does on its own reservation. The tribe has sovereignty. Back to the fantasy and the fact. This is not the empty land. These eleven tribes had relations, federal recognition. Now if the United States had said, "Oh, we are not going to allow bingo at Oneida "because it'll bring in gamblers or something". Oneida would have been in a different position. But the state of Wisconsin could not tell Oneida, "No, you can't do this." And there's a wonderful new book out

from the Wisconsin Historical Society Press

The Bingo Queens of Oneida. Mike Hoeft, just published in 2014/15. Just came out in January of 15. Which tells the story of the women who did this. Who put the bingo operation together. Opened up the bingo hall. They were amazed at how popular it was. How many people came from Green Bay, a couple miles out on highway 54 to play bingo. And then the story of how the tribe would not take no. Would not say-- Would not agree to the state to shut it down. Actually fought and won on this principle of tribal sovereignty. Other tribes followed. In California in the 1980s the tribe, the Cabazon tribe also opened high-stakes bingo, some other games of chance, and California tried to shut them down, saying this is a criminal matter. The tribe fought back saying, "No, there's nothing criminal about offering gambling. "If you allow bingo in California, "We can allow, we can do it". They won their case. Congress said, "Okay, now we're going to have "to get involved as the United States trustee here." Congress passed this acronym the I-G-R-A, IGRA. Indian Gaming Regulatory Act which set out to regulate how tribal gambling would happen. And this is the basic law that all of our casinos are still under. First a tribe has to decide what type of gambling it wants. Class one or traditional games. They're interesting, but not too many gamblers want to play them. Class two is bingo. Class three are casino games, video poker, slots, blackjack, and so forth. Most important, the IGRA required states to negotiate in good faith. Congress said, "We're going to delegate this power "to governors of states, and they will negotiate compacts. "The United States will review them, "the Secretary of the Interior will review them, "but we're gonna, we're gonna trust governors "to negotiate in good faith." They really insisted on that with tribes about what kind of games they will offer, class one, class two, or class three. Now at this time in Wisconsin, gambling, there's no lotteries still. We have bingo and that's it. We have raffles. But our taxes were going up. Our property taxes were going up. The legislature and I think both Democrats and Republicans supported this, said, "Let's do what they're doing in other states. "Let's have a state lottery scratch-off game." I believe New Hampshire was the first to do this in the 1960s. New York copied this. Other states did. It was easier than raising income taxes. The money raised would go to schools or natural resources or property tax relief. Wisconsin decided in 1987, we're going to amend our constitution. We're going to allow for a state lottery. We're also going to allow for parimutuel betting. We're going to have horse racing. We're going to have thoroughbred racing here. I don't think that ever came about. I recall dog racing, but we never got the Wisconsin Derby. But that's another story. And as soon as the voters changed the constitution, we had not the Wisconsin Lottery, the very first lottery in this game, a scratch-off lottery was called Big Green. You have to have been from Green Bay or the Fox Valley to remember this. Big Green was offered by the Oneida tribe. The tribe that had won the case on high-stakes bingo. They said if the state can offer lotteries, and is going to offer a scratch-off game, so can the Oneida tribe of Wisconsin. So Big Green was launched. Turns out as I recall it had a better pay-out than the Wisconsin lottery. Was more popular in Green Bay and the Fox Valley because it was just known to be a better odds for gamblers. And the state didn't like that. The state wanted to have a monopoly on lotteries and, sued to shut down Big Green. The tribal chair at the time Purcell Powless, who died a couple years ago, fought to say, "If you can offer a lottery Wisconsin, "we can offer a lottery". This is what tribal sovereignty is about. This is what the Worcester case is about. You can't tell us what to do on our reservation. So, the Oneida sold Big Green tickets which were quite popular. Purcell Powless is still remembered with great fondness at Oneida. I put his picture there in that, to remind people that tomorrow at the Oneida reservation there is the annual remembrance of his life and his works. And he was involved in the bingo challenge in Big Green as well, and quite a hero. Back to our definition. Can you remember our definition of a lottery?

Three things

you pay to play, there's an element of chance, and if you win you get a prize. It might be a free game of pinball. Might be a gumball that comes out of a machine. But wouldn't that also describe a blackjack game? You put down chips to play blackjack. There's an element of chance. You get a good hand or you get a crummy hand, If you win you get a prize. Wouldn't that fit blackjack? Yes. Wouldn't it fit a slot machine? You put money in a slot machine. You pull the lever. You push the button. There's an element of chance. Three cherries pop up or two lemons and a cherry, and you either get a prize or not. If you define lottery as Wisconsin did,

with those three definitions

"Pay to Play, Element of Chance, A Prize if You Win." Blackjack, roulette, slot machines, anything you could find in a casino is a lottery. And the Wisconsin tribes had decided, "Yes, we are going to open casinos. "Not just, we're not just going to offer Big Green, "a scratch-off game. "We're not just gonna do high-stakes bingo. "We are gonna open casinos." And they approached Governor Thompson, especially the Lac du Flambeau tribe, and said, "We would like to open a casino "at Lac du Flambeau that will offer blackjack, "video poker, slot machines, "because these are all lotteries "as you understand them in Wisconsin." Governor Thompson said no. So the tribe sued him in federal district court, and here was my tiny, little role for reasons that are obscure in the time, mists of history. I was asked to be an expert witness. So I researched the history of pinball. Now sometimes we historians research matters of life and death. We research epidemics, plagues, catastrophes. Sometimes we research frivolous matters like the history of pinball.

That was my contribution

to write about the history of pinball, and then also to point out, a second, probably more important area. Governor Thompson was negotiating in bad faith. Now, those of you in the audience, many of you know what was going on in the spring of 1989 at Lac du Flambeau. This was the height of Chippewa spear fishing and violent protests against Lac du Flambeau Ojibwa's exercising their rights. Governor Thompson was vocally on the sides of, not of the violent protesters, but vocally against Chippewa treaty rights, saying they were outdated. They should be scraps. Asking Congress to abrogate that treaty. He had proposed a buy-out also. A fifty million buy-out at Lac du Flambeau if the tribe would agree to forgo its right to fish. And the voters rejected it overwhelmingly at Lac du Flambeau, and he was angry. And he said, you had your chance, I'm not going to negotiate with you over a casino. Absolutely not. So the tribe took him to court. They had my little testimony on pinball. I don't think mattered one way or another, but the judge was a little more impressed that Governor Thompson had just stonewalled them, and was not negotiating in good faith. He had no intention of signing a compact where Lac du Flambeau would get a casino. The Sokaogon Chippewa, Ojibwas, the Mole Lake tribe joined Lac du Flambeau and said, he won't negotiate with us either. Because they were one of the tribes that was spearing and he was determined to punish them. And the judge heard that and said, "You know, Governor, you might be governor, "you might have a powerful office, "but the law says you have to negotiate in good faith." Start negotiating. And so the governor lost and was ordered by the federal courts to start negotiating compacts with the tribes. Now he did get a little bit of satisfaction I guess you could say. He said I'll do that. There's eleven tribes to negotiate with, that's a lot. Somehow Lac du Flambeau wound up with number 11 on that list. That he went, got around to talking to. But he eventually did negotiate with all 11 of them, and signed compacts under the IGRA, the Indian Gaming Regulatory Act of 1988. The first ones were signed in 1991, the last one with Lac du Flambeau 1992. And I went back and looked at them, they're posted, the old compacts from 1991/92, they're posted on the Department of Administration's webpage. Here's the one between the Sokaogon Chippewa, the Mole Lake band, 1991. The tribe shall have the right to operate electronic games of chance with videos facsimile game, facsimile displays. I think that's video poker. Electronic games of chance with mechanical displays. Old-fashioned slot machines. Blackjack. Pull-tabs or break-open tickets where not played where the bingo is. And so very simple, but this was in effect Las Vegas style gambling that came first to Wisconsin. It was really the Mole Lake who broke through there. And in that compact there's a little clause that most gamblers don't know much about. I'll read the fine print here.

Software requirements

each electronic game of chance must meet the following maximum and minimum theoretical percentage payout during the expected lifetime of the game. Electronic games that are not affected by player skill, like a slot machine, there's no skill in playing a slot machine. Payout a minimum of 80%. And no more than a 100%. Wouldn't it be hard for a slot to pay out more than a 100% of what's wagered? But that is the range. Every one of the compacts was like that. Some of them I think were 85%. Which explains, ah, if fifteen billion is gambled, about anywhere from 12 to 13 billion's gonna go back to the gamblers. So the state wrote that into the compacts. It still can be a very successful business. Think about that folks. For every dollar that puts in if you get to keep 15 cents, that's a very successful business. And every one of the tribes wanted to get in on it, and they did. They also agreed to pay a small-- I wouldn't call it a maintenance fee-- an administrative fee to the Wisconsin Department of Administration to do background checks, review contracts and things like that. It's not that the state could regulate them, but the state wanted to make sure these were done above board and the tribes agreed. Governor Thompson became the biggest booster of casino gaming in the state and took credit for it and said, "Look how it has transformed Indian country. "Look at the prosperity after so many decades, "centuries of poverty, "look how this state is turning around." And he was very proud of those. These were five year agreements set to expire in the mid to late 1990s. Every tribe negotiated with the governor to renew them. And they were. But the governor said, "Well, you have been so successful tribes, "you should give something back to the state." Now under the Worcester doctrine, he couldn't tax them, but he said, "You know, companies in this state "pay the corporate income tax. "We've lowered it under my term, "it's about 6.5, that would be a fair payment "back to the state for signing these compacts." And the tribes agreed, so there was some give and take, and you can see by the second round of compacts, there was quite a difference between successful tribes that had profitable casinos, and tribes that just struggled to meet payroll. Under that last category we'll put the Red Cliff Ojibwa way up in Lake Superior. They agreed to pay in their second compact $64,000 a year every year for the next five years. If the corporate income tax was six and a half percent, I don't think that the-- I think it used to be the Island Vista, now it's some other name. The casino there made more than a couple hundred thousand dollars a year. By contrast, the Oneidas who were the pioneers in this, said "Yes, governor, "we'll pay you 5.4 million dollars a year "in lieu of a corporate income tax." Which suggests that their net revenue was more like 85 million dollars a year. No tribe had ever been this successful in any economic endeavor. That's why it was, why the governor, took credit for it. Tribes were eager to renew these. In between we see the Stockbridge-Munsee one. $650,000 a year. So by the late 1990s there already were some very rich tribes, the Oneidas have a lot of members and a lot of needs, and some poor tribes that didn't really benefit from the casino gaming nearly the same. The explanation was the nearer a tribe was to a population center, as Oneida was to Green Bay and the Fox Valley, the more people would gamble. The farther away a tribe on Chequamegon Bay in Bayfield, it's just not gonna draw that many gamblers. So already there was kind of a divide between casino wealthy tribes and casino poor tribes. Not just in this state, but other states. There's a third round of compacts under the Doyle administration which extended not just five years, but I believe they're 25 years. And we see the amount of money involved, here's the Ho-Chunk compact of 2008. Going forward from 2008 to what would that be? 2033. And the Ho-Chunks agree to pay $45 million dollars a year to the state of Wisconsin which gives some idea how successful that has been. Again I am struck by how much Wisconsinites will gamble when you make it easy. $15 billion going into those slots, those video poker machines, those blackjack tables. Who would have thought it in 1990 when those first casinos were in Quonset huts. Were in shacks and barns, and now everyone, just about everyone has a modern, exciting casino with a resort hotel attached or golf courses. It's remarkable, and as I say, who would have thought that Wisconsin with its, its tradition of hard work and thrift and savings. When you made it easy for people to go to casinos, so they would wager $15 million dollars a year. Now they get that back, they get 13 million back, but this has still been by far the most successful economic development project for Wisconsin tribes. Not shared equally of course, but it is. And it has weathered the recession. There was a bit of a dip in the handle, the amount that tribes were receiving from gamblers, during the great recession 2007, 2008, 2009, but it's pretty much stabilized. It seems like a permanent feature of Wisconsin now. That casino gambling run by tribes, probably won't be any new ones, not much expansion, but this is here to stay, and seems to work pretty well. And with that, thank you very much for coming today. (audience applauding)