Wisconsin's gaming tribes rested easy on Friday with a state court ruling that upheld their right to operate and expand their casinos.

At issue in the closely watched case were compacts the tribes recently signed with Gov. Jim Doyle (D). Opponents said the agreements violated the state constitution, which was amended in 1993 to outlaw most forms of casino-style gaming.

Also at stake was the right for the tribes to engage in gaming at all. Opponents said the 1993 amendment effectively shut down the tribal casino industry.

The Wisconsin Supreme Court disagreed on both counts. It said the compacts were legal because the state previously promised the tribes the right to offer gaming back in the early 1990s, before the amendment came into the picture.

"The essence of what is at issue here is whether Wisconsin should break treaties with tribes by walking away from its contractual obligations," the decision stated. "Rules of contract interpretation and the Contract Clauses of the United States and Wisconsin Constitutions compel us to conclude that the state must honor its contractual obligations in their entirety."

Tribal leaders quickly praised the ruling. Within hours, the Forest County Potawatomi Tribe said it would move forward with a $240 million expansion of its casino in Milwaukee that had been in limbo pending the court challenge.

"It's a good day for Indian gaming but it's also a good day for the state of Wisconsin," said tribal attorney general Jeff Crawford.

The Menominee Nation said the decision paves the way for an off-reservation casino the tribe is pursuing. "This could mean more jobs, more money to local and state governments and more opportunities in Kenosha," said interim chair Karen Washinawatok, referring to the casino site in Kenosha.

In Wisconsin, gaming is a big business. According to independent Indian Gaming Industry report, tribes in the state took in $1.2 billion in 2005, an increase of 4.4 percent from 2004.

The tribes have the potential to bring in even more revenue now that the legal basis for the compacts has been secured. The agreements allow for more Class III games and extended hours at casinos, and they don't expire.

A separate court case had questioned Doyle's authority to sign the compacts. The state Supreme Court, in 2004, ruled that he overstepped his bounds.

But on Friday, the court set aside that decision and said the new games were valid. "The court's ruling today affirms what has been the [Doyle] administration's position all along �- that the governor has the ability to negotiate gaming compacts with the tribes in accordance with federal law," said administration secretary Steve Bablitch.

Although the decision was an overall win for the tribes, the court was divided on the two main issues in the case. With regard to the continuing validity of the early 1990s compacts, the judges were unanimous.

With regard to the new Class III games, the judges were split by 4 to 3. The three dissenting judges said the Indian Gaming Regulatory Act makes it clear that tribes shouldn't be allowed to offer gaming that is outlawed for others in the state.

One dissent quoted a 1987 statement by Sen. John McCain (R-Arizona), now the chairman of Senate Indian Affairs Committee, who said "[W]hen we talk about gaming spreading all over this country, let's not forget that no tribe will be allowed to have gaming operations which exceed that which is already allowed in the state."

The plaintiffs in the suit, the Dairyland Greyhound Park, had hoped the court would take statements like these and invalidate the compacts and the basis for Indian gaming. The Dairyland racetrack has seen revenues suffer since the tribes opened their casinos, and the track is in the process of being sold to the Menominee Nation for the off-reservation casino.

Court Decision:
Dairyland Greyhound Park v James Doyle (July 14, 2006)

Relevant Links:
National Indian Gaming Commission - http://www.nigc.gov
National Indian Gaming Association - http://www.indiangaming.org