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MADISON – The leader of the Stockbridge-Munsee told Wisconsin authorities Monday her northern tribe was withholding nearly $1 million in casino payments to the state over a dispute with another tribe's gambling operation.

“We have tried to resolve these issues directly; now we are being forced to pursue all legal remedies available to protect our 1,200 tribal members, hundreds of employees and the various local organizations who rely on our support," said a statement from Shannon Holsey, president of the Stockbridge-Munsee Tribal Council.

The decision to hold back the payment escalates the dispute over the Ho-Chunk Nation's plans to expand its casino in Wittenberg, about 15 miles from the facility the Stockbridge operate in Bowler. The Stockbridge contend the state should stop the Ho-Chunk expansion, which it says will financially devastate the Stockbridge.

A recent market study funded by the Stockbridge concluded the tribe would lose more than $22 million a year if the Ho-Chunk completes the plans for its casino in Shawano County northwest of Green Bay. Casino revenue is the main source of money the Stockbridge use to provide services.

The Ho-Chunk opened the Wittenberg casino in 2008 as an “ancillary facility” that the tribe is allowed to have under a compact it reached with then-Gov. Jim Doyle in 2003. Last September, the Ho-Chunk began a $33 million project to add a hotel, 250 new slot machines and table games.

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The Stockbridge and other tribes contend such an extensive upgrade is not allowed for what is supposed to be a secondary casino. What's more, the Stockbridge argue, the Ho-Chunk land isn't eligible for a casino of any type under federal law.

So far, the state has sided with the Ho-Chunk and allowed the expansion to continue.

That's left the Stockbridge with few options, leading to the decision Monday to hold back a $923,000 payment to the state that is due June 30.

Tribes in Wisconsin pay a share of their casino profits each year under a deal that ensures the state won't allow other types of gambling. Dennis Puzz, the general counsel for the Stockbridge, said the payment was being withheld because the state is acting arbitrarily in how it enforces its compacts with tribes.

"This is only one part of our strategy and one part of an effort to communicate to the state that this is of grave concern to the Stockbridge and other tribes," Puzz said.

The Stockbridge is considering taking the issue to mediation, arbitration or a federal judge if it can't be resolved soon, Puzz said.

Steven Michels, a spokesman for the state Division of Gaming, said Monday the state has reviewed the issue a number of times and determined the Ho-Chunk is allowed to expand its Wittenberg casino.

"Simply put, the Stockbridge is getting the deal it agreed to with the state in 2003," Michels said by email. "Likewise, the Ho-Chunk is getting the deal it agreed to with the state in 2003 as well."

Ho-Chunk spokesman Collin Price said his tribe's plans to open its expanded casino in December are in keeping with federal law and the tribe's agreement with the state. The Ho-Chunk and Stockbridge are competing to draw customers, just as other businesses do, he said.

"We don't apologize for trying to be entertainment leader and trying to have a facility that's top notch," Price said.

The Stockbridge is a small player in the state's casino operations and its payment is relatively small compared with those made by richer tribes, such as the Ho-Chunk and Forest County Potawatomi.

The Ho-Chunk has four major gambling facilities, including ones in Madison and Wisconsin Dells.

In a further sign the dispute could reach a boiling point, the Stockbridge recently retained a pair of attorneys — Bryan Newland and Scott Crowell — who specialize in the complex area of Indian casino law.

Newland, of Michigan, served on President Barack Obama’s transition team and was a top aide in the Bureau of Indian Affairs. There, he worked on policies on casinos and Indian lands.

Crowell, of Arizona, won federal court decisions that found California Gov. Arnold Schwarzenegger had negotiated in bad faith with a tribe over a revenue-sharing deal the courts considered an illegal tax.

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