Gambling is back in the mix for stadium

Plans to build a casino in downtown Minneapolis or install slot machines at horse racing tracks are re-emerging at the Capitol as possible funding sources for a new Vikings stadium.

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Proposed casino for Block E, Minneapolis. Credit: Gensler, Los Angeles

Plans to build a casino in downtown Minneapolis or install slot machines at horse racing tracks are re-emerging at the Capitol as possible funding sources for a new Vikings stadium.

Gov. Mark Dayton met last week with casino developers eyeing the troubled Block E retail and entertainment complex as a gambling site, an idea that has strong backing from some prominent Minneapolis business leaders.

Dayton and his staff also have met with Rep. Tom Hackbarth, R-Cedar, who is preparing legislation that would authorize racinos -- slots at the state's two horse racing tracks. Hackbarth, who plans to meet with Dayton again this week, said the governor is "very, very interested'' in his proposal, which like the casino plan would likely face formidable opposition.

Meanwhile, a top NFL official told the Star Tribune that the league could agree to a stadium funding plan that includes gambling revenue, as long as customers could not wager on games in the betting facility.

"It's not something we would have an absolute prohibition against," said Neil Glat, the NFL's senior vice president for corporate development.

Dayton, who also met with NFL officials last week, has not said he would support either proposal but has been willing in the past to look at expanding gambling to raise revenue. A top administration official confirmed the private meeting with Hackbarth but would not characterize the governor's views of it.

But it's clear that Dayton wants the stadium issue settled soon. He is calling for a possible special legislative session by Thanksgiving to address the Vikings' stadium needs and last week said he will unveil his own stadium plan by Nov. 7. That plan is likely to include his preferred site and details on how to pay for the state's share.

The Vikings want to build a $1.1 billion stadium in Ramsey County's Arden Hills. The team has pledged at least $407 million to the project, and has a tentative agreement to have Ramsey County contribute another $350 million, financed by a countywide sales tax. The Vikings want state officials to provide $300 million. Some civic and political officials are still pressing for a new stadium in downtown Minneapolis, even though the Vikings have repeatedly said they are only interested in the Arden Hills site.

The NFL has long been wary of direct ties between professional football and gambling. The Vikings, when asked about using gambling money for a stadium, have generally sidestepped the issue, deferring to the NFL and legislators.

If casino or racino money was used to help pay for a Vikings stadium, and betting on NFL games occurred at the gambling facility, Glat said it could be "potentially problematic."

But, he added, it would be "more than acceptable" to use lottery scratch-off game money to fund a new Vikings stadium, and said it's been done to finance other new stadiums. The NFL, he said, would closely scrutinize any significant gambling money funding a stadium.

Expect strong opposition

Gambling revenues could provide a source of non-tax funding to pay for the state's share of a Vikings stadium, but also provoke strong opposition, even legal action.

A new state calculation, released last week, said that Hackbarth's racino plan could produce at least $120 million a year by 2015. Hackbarth said he wants to use the money to help build a Vikings stadium, have the state pay money it owes to K-12 schools, and even finance a new St. Paul Saints stadium.

Meanwhile, developer Bob Lux, who is pushing the Block E casino plan at the Capitol, said his plan would funnel $100 million to the state every year.

"We are very excited," Lux said after meeting with Dayton for the first time since he became governor.

The casino pitch appeared to fizzle at the Capitol earlier this year, but since then some business leaders have been looking at it as a way to improve the fortunes of downtown Minneapolis. Ralph Burnet, who owns the downtown hotels the W Minneapolis and the Le Meridien Chambers Minneapolis, said that he and many downtown CEOs are strongly advocating the Block E casino project.

"I really think it would be fantastic for the city,'' Burnet said Saturday.

Despite the enthusiasm in some quarters for using racino or casino money to build a Vikings stadium, both ideas could face an array of problems.

Minnesota's Indian tribes control the state's 18 casinos, and could file legal action to block any gambling expansion, which would tie up the issue in court.

"The tribes are not going to roll over,'' John McCarthy, executive director of the Minnesota Indian Gaming Association, said Saturday.

Earlier this year, however, one of Minnesota's most prominent lawyers told racino backers that they need not worry about the tribes.

Former Minnesota Supreme Court Chief Justice Eric Magnuson, now a private attorney, issued a June 16 opinion to Canterbury Park -- one of the state's horse racing tracks -- saying he thought any court fight would last less than a year.

"It is my firmly held opinion that the proposed legislation is constitutional and that any suit brought challenging the legislation would fail," Magnuson wrote.

Lux also downplayed the impact of a Block E casino on existing Indian casinos. "[It] has a minimal effect," said Lux who, along with Phillip Jaffe, an associate, gave $1,500 last year to Dayton's gubernatorial campaign.

But a 2005 opinion from then-state Attorney General Mike Hatch concluded that a state-run casino would not be constitutional. At the time, Republicans accused Hatch, a DFLer, of having a political motive -- tribes are more likely to give money to Democrats than Republicans. But some legal scholars say the attorney general's argument has merit.

"There are serious constitutional issues with any state-owned casino," David Lillehaug, a Minneapolis attorney who represented Dayton during last summer's state government shutdown. "If I were an elected official, I would not want to go all in on an opinion from Eric Magnuson, who no longer has a vote on the Supreme Court.''

Rep. Morrie Lanning, R-Moorhead, chief House stadium legislation author, said he sensed that "there's more potential Republican and DFL votes for racino" than a Block E casino.

Minneapolis Mayor R.T. Rybak, who will meet with Dayton Monday on stadium issues, has said he is against expanding gambling.

John Stiles, a spokesman for Rybak, said Saturday the mayor's opposition would be heightened if proceeds from a Block E casino would be diverted from Minneapolis to build a stadium in Arden Hills.

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