Editorial cartoon 1/29/14

OK, I'm willing to concede after all these years that gambling casinos in our state are here to stay.

Wisconsin opened the barn door to gambling back in 1987 when its citizens voted to amend the state's constitution so we could have a state lottery and on-track parimutuel betting. It was a measure that we as a newspaper fought, but we lost the battle, big time.

Shortly thereafter along came the feds, who essentially said that if the white guys could offer games of chance, so could the Indian nations. Hence, along came the Ho-Chunk, the Oneida, the Menominee, the Potawatomi and other tribes to eventually offer Las Vegas-style gambling throughout the state. Although the results have been uneven, there's no doubt that their gambling parlors have helped pull many Indian people out of poverty and changed their lives for the better.

But something disturbing is going on. Several Wisconsin tribes are contemplating getting into the despicable payday loan business. The Lac du Flambeau Chippewa are already offering payday loans online and are hoping to go even a step further — offering an opportunity to gamble online.

Payday loan outfits are notorious for advancing money to folks in a bind and then charging them exorbitant interest rates as they struggle to pay back the loan. I can't imagine anything worse, especially when connected with a casino operation.

For years in this space I've been fighting the payday loan interests. I've cited studies that show the industry collects 90 percent of its revenues from borrowers who cannot pay off their loans when due.

The Washington, D.C.-based Center for Responsible Lending estimates that predatory payday lending now costs American families $4.2 billion a year in excessive fees. Some states have put strict bans on that kind of lending. Wisconsin, unfortunately, has had big problems coming to grips with any meaningful regulation. The industry has been very adept at lobbying state legislators and helping fill their campaign coffers.

The payday loan operations have preyed on the poor and elderly and, most unconscionably, on American servicemen in need of quick cash. They make good money at it — just look at the proliferation of payday loan stores in a relatively wealthy community like Madison.

But making good money by taking advantage of the most vulnerable in our society doesn't make it right. And it's no more right when Indian tribes resort to the same practice.

The Lac du Flambeau Chippewa tribe in Wisconsin has launched three online payday lending companies (the loans are not available in Wisconsin). It's not alone. According to a Milwaukee Journal Sentinel story late last year, about two dozen tribes across the country have launched short-term lending operations online and they may be able to get authority to offer online gambling as well.

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Have a bad day at the online casino? Just take a loan on your next paycheck and keep gambling. Worry later about paying.

Lac du Flambeau President Tom Maulson isn't fazed by critics who say it's unseemly for Indian tribes to be preying on the poor. He told the Journal Sentinel that it's a legal business and they will make sure it's done legally.

There's more to the story, though. There are reports that some payday loan firms are using Indian tribes as fronts for their operations. That way they can get around strict laws in effect in some states.

Regardless of how these payday loan schemes are structured, they're wrong. They hurt people who don't need any more hurting. Our honorable Indian nations shouldn't get caught up in this dishonorable business.

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com and @DaveZweifel

Dave is editor emeritus of The Capital Times.