The rebirth of plans for a huge Indian-owned casino in Kenosha could place an unexpected hurdle in the path of Waukegan’s bid for Illinois’ last remaining casino license.
The Menominee Tribe of Wisconsin has announced it has acquired an option to buy Dairyland Greyhound Park, a dog-racing track 20 miles north of Waukegan where it hopes to build a casino that would be two or three times bigger than any in Illinois.
The $40.5 million Kenosha deal faces political and regulatory obstacles. A similar plan failed in 2001. But if the Menominee succeed, their casino could slice into the revenue of a Waukegan casino and make the city’s proposal less attractive to the Illinois Gaming Board, some officials said.
“Obviously, it will hurt [Waukegan] tremendously,” said Summit Mayor Joseph Strzelczyk, whose town is one of five vying for a casino. “Part of the romance and enticement of this is that taxes will be generated for the state.”
The development comes to light as bidding for Illinois’ 10th and last casino license is being considered.
Speaking at an education rally Monday on Chicago’s West Side, Gov. Rod Blagojevich weighed in on the idea of a state-owned casino for the first time. He said it is something the state might consider with the proper provisions.
“If you have the right kinds of safeguards built in, [if] you have the right kind of vigilance placed in the process … it’s something we seriously have to take a look at,” Blagojevich said.
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Ultimately, the decision rests with the Gaming Board, he said.
The governor’s comments followed the disclosure by industry sources last week that Penn National Gaming, the Pennsylvania company that owns Hollywood Casino in Aurora, bid more than $500 million for the casino license, $200 million more than any other bid. The company promised to transfer ownership of the casino, to be built in Rosemont, to the state in exchange for a long-term contract to manage it.
Waukegan Mayor Richard Hyde said he is not worried about what happens in Kenosha or Wisconsin.
“We are further along getting [a casino] here than they are there,” he said.
Developer Alan Ludwig, a partner with the city and Harrah’s Entertainment Inc., has said the threat of a Wisconsin casino is all the more reason to build in Waukegan. A Waukegan casino will “protect our borders” by keeping Lake County gamblers from spending their money out of state, he said.
Illinois lawmakers who opposed the Menominee’s earlier Kenosha plan do not care for the latest proposal either.
“We would like to see a casino in Waukegan, not Kenosha,” said state Sen. Adeline Geo-Karis (R-Zion), one of at least seven Illinois politicians who wrote letters in 1999 to the Bureau of Indian Affairs denouncing the plan to expand gambling in Wisconsin. “It might as well be in our county. It will help our schools.”
Waukegan has agreed to give 32 acres to Harrah’s to build a $200 million casino if the city and the company win the license.
The Menominee proposal calls for a casino with 2,500 to 3,500 gambling positions, compared with the 1,200 allowed in Illinois. More tentative plans include a 200-room hotel, restaurants, conference facilities and a water park. The tribe acquired its option last month.
“It’s not a casino for Illinois,” said Evan Zeppos, a spokesman for the Menominee. “My sense is you would find interest from people on both sides of the border–strong interest.”
But a 1998 analysis by Crowe Chizek, an Indiana consulting firm, concluded that casinos in Waukegan and Kenosha would wrestle for many of the same customers. The report estimated that a Kenosha casino could expect revenue as a high as $296 million without a casino in Waukegan, but 22 percent less with a Waukegan competitor.
Because the casino would be outside the Menominee reservation, the project must clear tough regulatory hurdles. Nationwide, Indian gambling regulators have approved only a handful of off-reservation casinos.
Most Wisconsin observers agree that the political climate for a Kenosha casino is rosier than three years ago, when then-Gov. Scott McCallum effectively killed the Menominee plan by announcing he would not support it.
Current Gov. Jim Doyle won’t pass judgment on the proposal until it has been approved by the Kenosha and Kenosha County and has approval from federal regulators, a process that can take months or years, spokesman Dan Leistikow said.
The city and county approved the Menominee’s earlier plan, along with a deal that promised them millions of dollars in shared revenue.
“My sense is that it’s a strong possibility,” Kenosha County Executive Allan Kehl said.
Dairyland Greyhound Park’s fate is an example of what can happen in the gambling industry when competition heats up.
One of the largest dog tracks in the nation when it opened in 1990, Dairyland has watched its revenue dwindle in recent years as Indian casinos opened across Wisconsin.
“The bloom is off the rose,” said Roy Berger, executive vice president of Dairyland. “We have lost money for the past five years.”
Gamblers betting on dog races at Dairyland one recent afternoon remembered the heyday of the track, an enormous multistory facility with room for thousands of bettors.
“On a weekend, three-quarters of this place was filled up and down,” said Frank Wagner, 75, a Sussex, Wis., retiree who gambles $2 to $6 a race on dogs once a month with his friends.
Many gamblers at the track said they would welcome a casino in Kenosha, with the caveat that the new owners “keep the puppies” racing, Wagner said.