Competition for gamblers' dollars is getting tougher as one Wisconsin tribe seeks to block another from building a casino between Milwaukee and Chicago.
The Midwest gambling market has changed dramatically over the past couple of decades. There are now 36 casinos in Wisconsin and Illinois and 9,000 slot machines in Illinois taverns, truck stops and similar venues, with an untold number of illegal slots in Wisconsin bars, the Milwaukee Journal Sentinel reported Sunday .
Casinos "certainly do reach that point where they just start essentially cannibalizing each other," said Mark Nichols, of the University of Nevada-Reno's Institute for the Study of Gambling and Commercial Gaming. "You're seeing signs of that now."
That helps explain why the Potawatomi tribe is spending millions to block the Menominee tribe from opening an $808 million casino complex in Kenosha.
The Potawatomi fear a casino between Chicago and Milwaukee would siphon many of its Illinois customers. The Potawatomi Bingo Casino in Milwaukee draws about 35 percent of its customers from the Chicago area.
"A slot machine is a commodity, and if you could travel 20 miles, as opposed to driving 55 miles, to get to a slot machine, you're going to do that," said John Repa, a national casino consultant who is working for the Potawatomi.
The Menominee face an uphill fight to open a Kenosha casino.
Federal law requires approval from Gov. Scott Walker, who has said the Menominee must persuade all 11 Wisconsin tribes -- including the Potawatomi -- to support the casino before he would approve it. In addition, Walker has said the Menominee must show that a new off-reservation casino would result in "no new net gaming," a term his administration has not defined.
Potawatomi Bingo Casino took in nearly $400 million in profits last year. Those winnings allow each tribal member to collect about $70,000 a year in casino dividends. Studies by the Menominee predict a Kenosha casino could eventually net more than $500 million a year from gamblers. Potawatomi officials contend that figure is inflated. In approving the Menominee plan, the U.S. Department of Interior downplayed the impact, predicting that much of the business initially lost by the Potawatomi would return.
Regional casino markets nationwide -- including those in Reno, Nev.; Atlantic City, N.J.; Illinois and Indiana -- have seen gaming revenue drop after new competitors enter the market. The same effect has been felt in the Chicago area since the $445 million Rivers Casino opened in Des Plaines, Ill., in 2011.
"Our feeling is expansion hurts everybody," said Suzanne Phillips, marketing director at the Grand Victoria Casino in Elgin, Ill., which saw gaming revenue fall by nearly one-third after the Rivers Casino opened about a half-hour away. "There is a finite number of gamers."