Scott Walker has reached a deal that would allow the Forest County Potawatomi to reduce its payments to the state by up to $250 million if a new casino cut into the tribe's revenue.
Aides to the Republican governor said the deal would end 15 years of legal uncertainty and limit the state's potential exposure, which Walker officials believe could have been as high as $500 million.
At issue is how much the Potawatomi could withhold from the state if another tribe were to establish a casino 30 to 50 miles from the Potawatomi operation in Milwaukee.
The Potawatomi have contended another gaming hall — such as ones proposed for Kenosha over the years by the Menominee tribe — would cut into its customer base and profit.
Tribes in Wisconsin pay the state millions of dollars a year for the exclusive right to operate casinos.
The amounts are based on a percentage of their revenue known as net win.
The state typically does not reveal how much individual tribes pay, but calculations in 2014 showed the Potawatomi were expected to owe the state $25 million to $30 million that year. Jim Doyle reached an agreement that barred competing tribes from establishing casinos within 50 miles of the Potawatomi facility.
The Bureau of Indian Affairs signed off on barring competing casinos within 30 miles but not farther than that.
The state and tribe have fought over how much the Potawatomi could reduce its payments to the state if a rival tribe built a casino 30 to 50 miles away.
In 2014, an arbitrator ruled the state would be responsible for the Potawatomi's losses in such a scenario and the state concluded it could be on the hook for up to $500 million, according to a letter from Ellen Nowak, Walker's administration secretary.
The Bureau of Indian Affairs rejected the arbitration decision soon afterward because it shifted costs from the Potawatomi to the Menominee.
The state and Potawatomi have continued to negotiate on the issue since then.