An Indian tribe that runs three casinos in southwestern Michigan announced Wednesday it will open another in South Bend.
The casino is expected to draw business from Indiana's existing casinos, which have already been seeing business shrink because of competition from surrounding states.
The Pokagon Band of Potawatomi Indians said Four Winds Casino South Bend is expected to open in early 2018. Tribal Chairman John Warren said ground was broken this past weekend. Warren said the casino should help the tribe's 5,200 members as well as the South Bend community.
"Our citizens live here in South Bend in this area. We have a chance to better the community and their lives, and then everyone else benefits from that," Warren said.
Ed Feigenbaum, editor of the Indiana Gaming Insight newsletter, said that even though the casino won't be as big as the tribe indicated in documents to the Bureau of Indian Affairs, it will still have a significant impact.
"It's a big game-changer regardless," he said.
Those documents indicated the tribe would build a casino with 216,000 square feet of gaming floor space, which would have made it larger than any of the 13 casinos licensed by the state of Indiana, which includes two racinos. The tribe announced the casino would initially open with 55,000 square feet of gaming space and 1,800 gambling devices, saying this was the first phase.
The square footage would make it the sixth largest casino, smaller than the Blue Chip Casino's 65,000 square feet about 30 miles away in Michigan City. It would have the fourth highest number of gambling devices.
But while most Indiana casinos have Class III style gambling devices, the Pokagon casino would be able to have only Class II style devices until it reaches a compact with the state. In 1988, Congress gave tribes authority over Class II games, such as bingo-style games, but required them to reach a compact with states for Las Vegas-style Class III games. But because of innovations in technology, the difference between Class II and Class III type devices is blurring.
"To the unsophisticated consumer, it doesn't really vary that much," Feigenbaum said.
Warren said last year that a law approved by the General Assembly prevented Gov. Mike Pence from negotiating in good faith with the tribe on a compact, voiding the need for such an agreement. He said Wednesday he will wait to hear from Gov.-elect Eric Holcomb about negotiating a compact after Holcomb takes office next month.
"We're always open to have a conversation if anybody wants to have one with us," he said.
Warren said the tribe could decide to stick with Class II games.
"Until we get some history behind us and see how things are going, we may go into a different direction," he said.
He also said business will determine how big the casino in South Bend becomes.
The tribe has reached an agreement on how it will share revenue with the city. South Bend Mayor Pete Buttigieg said the city will receive 2 percent of the casino's annual net win. The annual payments will not be less than $1 million if the casino has between 850 and 1,699 games and will not be less than $2 million if it has 1,700 or more games.
"We think it will be considerably more than that," said Buttigieg, who declined to speculate how much more.
The tribe also will give $5 million to local initiatives and organizations over five years.
Buttigieg said the 1,200 jobs that are expected to be created also will help the community.
"Those jobs lead to other jobs, so it's a big deal," he said. "This is an economic engine."