Hanson says he’ll hold off on resolution seeking city-owned casino in Duluth
City Councilor Howie Hanson has a dream of opening a city-owned casino at the Duluth Entertainment Convention Center, but on Thursday night he indicated he would be willing to hold off asking fellow council members to support his vision, at least for a while.
Hanson’s resolution requesting a change in state law to allow the city direct entry into the gambling industry will come before the council on Monday.
Council President Linda Krug asked Hanson if he would consider tabling the resolution to allow for a committee-of-the-whole meeting on his proposal prior to any vote.
Hanson said he would not object to the proposal being tabled, as two of nine councilors will be unable to attend Monday’s meeting because of other commitments. He said a committee-of-the-whole discussion also would allow the council to “possibly go into closed session to discuss how this might affect litigation and negotiations that are currently underway.”
City Attorney Gunnar Johnson supported the idea of a pause, observing that the resolution did not appear to be particularly time-sensitive. The Minnesota Legislature is expected to next be in session in January, and legislative action would be required for Duluth to possibly get into the casino business.
Johnson suggested that city councilors likely would benefit from an update on the status of an ongoing dispute between Duluth and the Fond du Lac Band of Lake Superior Chippewa.
Under a revenue-sharing agreement, the city used to receive about $6 million per year from the band’s operation of a casino in downtown Duluth.
But the band ceased sharing proceeds from the Fond-Du-Luth Casino with the city in 2009 after concluding that the payments could not be justified. The National Indian Gaming Commission agreed, warning the band that if it continued to share its gambling revenues with the city, it would be in violation of the National Indian Gaming Act.
These actions and developments are still being sorted out in the courts. Johnson told the council there are four ongoing lawsuits between the band and the city, as well as a number of other matters that could be impacted if Duluth tries to push its way into a casino operation.
Karen Diver, chairwoman of the Fond du Lac Band, declined to comment on Hanson’s proposal when contacted by the News Tribune on Thursday.
Hanson suggested that if a city-owned casino became reality, Duluth could quite possibly double its prior take from local gambling. He said $12 million per year would go a long way toward beginning to repair and replace much of the city’s aged and failing infrastructure, including streets, sewer pipes and water lines.
The city had previously used the $6 million per year it received from the Fond-Du-Luth Casino primarily to pay for street work. With that revenue stream now cut off, the city council recently approved a street fee that costs local households $5 per month and non-residential properties $20 to $240 per month, depending on their size.
Hanson contends that the city council shouldn’t have called the charge a street fee.
“It should have been called the casino revenue replacement fee,” he said.
Hanson said the band’s actions may actually work to Duluth’s benefit in time, if a city-owned casino eventually becomes reality.
“By choosing not to honor a signed contract, the band may actually end up helping the city in the long-term, because it forced us to look outside the box and find another way to raise revenues,” he said.
Hanson predicts the Legislature will be receptive to the idea of municipal casinos, as cities struggle to pay for basic needs.
“There seems to be a lot of interest and support and energy to begin to have this discussion at the state level,” he said.