Duluth won’t be seeking to open a city-run casino any time soon.
City Councilor Howie Hanson, who had authored a resolution in support of a municipal casino, said he still supports the idea but believes the timing isn’t right to move ahead.
“With all the ongoing litigation, I think we need to let it play out a little more,” he said.
Hanson called his resolution “premature” as he withdrew it Monday night, yet he pledged: “It’s an issue that will resurface at a later date.” He said he’d like to put the idea to a citywide referendum vote, perhaps as early as next year.
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Up until 2009, the city of Duluth had received a cut of the Fond-du-Luth Casino’s proceeds under a revenue-sharing agreement with the Fond du Lac Band of Lake Superior Chippewa, which operates the gambling facility. But the band cut off the payments, which totaled about $6 million per year, after concluding the practice of sending so much money to the city of Duluth could not be justified.
The National Indian Gaming Commission later reached the same conclusion, ordering the revenue-sharing agreement to be voided.
That action remains the subject of continued litigation between the city, the band and the gaming commission.
A change in state law would be required before the city of Duluth could ever enter the casino business, and Hanson’s resolution advocated for new legislation that would open the door for municipal casinos.
Hanson predicted that incorporating a casino into the Duluth Entertainment Convention Center could bring significant additional economic development to the city’s waterfront.
Under the terms of a previously signed agreement, Duluth granted the Fond du Lac Band the exclusive right to operate a casino in Duluth, but if that compact has been voided, Hanson contends the city should not be bound by the obligation. “They can’t have it both ways,” he said.
City Attorney Gunnar Johnson said he still hopes a legal settlement or negotiations can provide a remedy.
“We’re still trying to pursue a reinstatement of the agreement between the city and the band. But if that’s not possible, the city is open to seeking to negotiate a new agreement that’s comparable to other agreements between individual bands and municipalities that have been approved all across the country,” he said.
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The city of Duluth had been using casino proceeds to pay for street improvements and has struggled to find replacement funding. Earlier this summer, the council approved a plan to charge residents and businesses a monthly street fee to provide roughly $3 million per year for street maintenance efforts.
But Hanson said he’s unsatisfied with the approach.
“Fees are not the solution to the financial challenges we face as a result of the casino not paying its rent,” he said.
