The Pokagon Band of Potawatomi Indians is a step closer to building a Four Winds Casino in South Bend, which could grab market share from Northwest Indiana casinos already facing stiff competition from Illinois.
The Pokagon Band announced Wednesday it has reached agreements with the city of South Bend regarding utilities and payments in lieu of property taxes.
The Pokagon Band will pay the city two percent of its net gaming revenue annually. The payment will not be less than $1 million if the casino has fewer than 1,700 games, and not less than $2 million if it has 1,700 or more.
It will also pay the city $400,000 to replace a sewer lift station. And, it will contribute a total of $5 million to various city projects and non-profit organizations.
South Bend Mayor Pete Buttigieg called it "a generous agreement" after the city's Board of Public Works approved the sewer and water utility deal Tuesday.
A draft environmental impact statement for the proposed $400 million casino and tribal village is currently under review. A final version of the statement must be issued by the federal Bureau of Indian Affairs before construction can begin.
The draft EIS describes a preferred development on 166 acres at Ind. 23 and U.S. 31. It contemplates a casino with as many as 3,000 slot machines, and an 18-story hotel with 500 rooms. That would be the largest casino complex in the state.
The potential size of a new Four Winds Casino and the probability of lesser financial obligations to the state have caused concern regarding its competitive impact.
A study by the Casino Association of Indiana concluded the new casino would "significantly affect the investment climate and the competitive landscape" and create "formidable competition."
Blue Chip Casino in Michigan City would be closest Northwest Indiana casino to the new Four Winds in South Bend. The spokesman for its parent company said Blue Chip has continued investing in its casino, and is concentrating on things it can control.
"All we can really focus on is doing what we do well. Then we're well-positioned to compete," said Boyd Gaming vice president David Strow.
The tribe must still enter into a compact with the state detailing its rights and responsibilities, including payments to the state in lieu of taxes.
Ultimately, authority lies with the Bureau of Indian Affairs to determine whether the state has negotiated "in good faith," as required by law, and to approve a compact.
When the General Assembly approved land-based casinos last year, it included a provision in the bill requiring its approval of any state compact with the Pokagon Band. It also sent a resolution to Indiana's Congressional delegation asking for a change in federal law that would prohibit a casino on tribal lands in Indiana.