CHICAGO Detroit voters have changed their minds about gambling.
Last Tuesday, voters approved two advisory referendums on bringing casinos to the city after rejecting four previous referendums on gambling issues. A referendum allowing Native Americans to operate a casino in downtown Detroit was approved by 60% of voters, while 59% of voters supported a referendum on riverboat gambling.
Mayor Dennis Archer, who has opposed gambling, reportedly said he will not stand in the way of voter sentiment and will work to secure the best deal for the city.
Still, gambling is not a sure thing for Detroit.
Gov. John Engler of Michigan remains "consistent in his opposition to gambling" in the state, according to John Truscott, his spokesman. That includes casinos proposed for off-reservation Native American casinos such as the one proposed for Detroit, and for privately owned riverboats, Truscott said.
Truscott said that Engler "has not been convinced" that casinos help the economy.
On Thursday, Engler announced that he will form a special committee to study the issue of gambling in the aftermath of the advisory referendum. The committee, to be made up of business and community leaders, will analyze the financial impact of gambling and its regulatory effects. A report could be completed in the next few months, Truscott said.
"We know that the pro-gambling people will be out in force. We want both sides--the negatives and the positives," Truscott said.
The Republican governor's position on gambling is particularly critical to the plan proposed by the Sault Ste. Marie, Mich., tribe of Chippewa Indians to put close to one acre of downtown Detroit land into trust for the tribe and build a $60 million casino on it.
John Hatch, a tribe spokesman, said the Chippewas have petittoned the U.S. secretary of the interior to make the land already purchased by the tribe into sovereign land that could then be used for a casino. The Indian Gaming Regulatory Act of 1988 allows casino operations on tribal land after an agreement is struck between a tribe and its respective state on the types of gambling that would be offered.
The Chippewas' petition is currently pending before the Department of the Interior to determine whether the trust land is in the best interest of the tribe and is not detrimental to the surrounding community, according to Bob Walker, a department spokesman.
Walker said that if the secretary grants the petition, Engler would have to concur with the decision in order for the land to be put into trust for the tribe:
Engler's Democratic opponent in the Nov. 8 election, Howard Wolpe, a political science professor and former U.S. representative, has said he will not oppose gambling. Sandy McClure, his spokeswoman, said the candidate believes local communities should be able to do what they want.
Hatch said that because Indian land is exempt from taxation, the Chippewas are willing to turn 5% of the casino's net revenues over to Detroit and to community groups, He said the 5% is expected to total $20 million a year.
In addition, the tribe has offered to pay for any infrastructure needed to accommodate the casino and for any increase in city services, such as police, fire, and sewer, caused by the casino's operation.
Hatch said he believes that the referendums passed this time because of Detroit's chronic unemployment and the fact that a new casino across the river from the city in Windsor, Canada, has been attracting patrons from the Detroit area.
The Indian casino is expected to generate 4,000 jobs in Detroit, Hatch said.
Meanwhile, a private group is promoting a riverboat gambling plan for Detroit that would reportedly generate about $68 million in revenues for the city and the state. Executives from the group did not return phone calls.
Rating agency officials, who have been monitoring Detroit's declining financial position, said the impact of casinos on the city is unclear.
"So much is unknown and undetermined," said Charles Kishpaugh, an assistant vice president in the Great Lakes region at Moody's Investors Service. "Detroit has so many difficulties and challenges ahead it's hard to comment on how a casino would fit into the city's situation:"
Joe O'Keefe, a director at Standard & Poor's Corp., said the impact would depend on the kind of deal the city strikes with casino promoters. However, he pointed out that it would be "hard to say if [casinos] would be a net positive or negative economically and financially" for Detroit.
