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Let the games begin

Forging a compact, Mohawk style

Prospects for Indian gaming in New York's Catskill Mountains took a major step forward on Feb. 19 when Gov. Eliot Spitzer and the St. Regis Mohawk Tribe announced a compact agreement. But is a Mohawk casino in the Catskills a sure thing? Don't bet on it quite yet.

The Catskills region, once a tourist Mecca, is mired in a decades-long economic skid. State politicians have touted casinos as one way to revitalize the area's economy. In October 2001, the Legislature gave its OK for former Gov. George Pataki to negotiate Class III compacts for up to six tribally owned casinos, three in western New York and three in the Catskills.

In order to comply with IGRA, the federal Interior Department must take some 30 acres of land into trust for St. Regis on which the casino itself will be sited. The distance between the tribe's Akwesasne reservation and the potential casino site in Monticello - some 350 miles by road - could create problems. Interior Secretary Dirk Kempthorne has been vocal in his opposition to ''off-reservation'' casinos. Spitzer has said he will urge Kempthorne to approve the land trust application. After all, it was Albany that decided to site casinos in the Catskills, not the state's tribal governments.

Interior must also approve the compact itself. And of course, there is a lawsuit by a coalition of anti-casino groups pending in federal court, litigation which could delay things.

Terms of the deal

The St. Regis/Albany compact calls for the Mohawks to ''share'' 20 percent of their slot revenue with the state for the first two years of the agreement. Payments to Albany increase to 23 percent for the next two years and then to 25 percent thereafter. The deal expires after 14 years.

Separate from the compact are local impact agreements with Sullivan County and the town of Thompson, in which Monticello is located. Sullivan gets $15 million annually, while Thompson gets $5 million. This money is meant primarily to offset the impact on local schools, transportation infrastructure and the like.

These terms are similar to those in the compact governing the tribe's Akwesasne Casino in northern New York. But the Akwesasne compact includes no expiration date, while the Catskill compact moves to the 25 percent level more quickly than does Akwesasne.

Did the Mohawks suffer a sovereignty setback by agreeing to allow the enforcement of state labor laws on what would be tribal trust land? James Ransom, one of three chiefs on the Mohawk Tribal Council, said that finding ways to compromise in regard to state laws is tough.

''In regard to the labor laws, that landscape is changing, given the recent court decisions that have gone against tribes,'' Ransom said, adding that the National Labor Relations Board is moving to flex its muscles over tribal lands. ''So, eventually tribes may have no choice in the matter as it is probably going to be required, if this decision [on the NLRB] stands.''

Ransom pointed out the traditionally strong ties between the Mohawk people and organized labor. He said that a local ironworkers union is active on the Akwesasne reservation and that workers at the casino there are currently - and will continue to be - covered under ''a self-insured worker's compensation program that is consistent with the requirements of New York State Worker's Compensation Laws.''

As for the Catskill casino, the Mohawks agreed to both provide access for labor organizers and to participate in the state's worker's compensation program. ''This really was not an issue for us,'' Ransom said.

This issue of state taxes remains open. Ransom said that the Catskill compact calls for the tribe to withhold state payroll taxes but says nothing about state sales tax collection. He added that he remained committed to a proposal he made to the Pataki administration that the parties negotiate a trade agreement.

The Mohawks, Ransom said, ''would agree to collect and remit sales tax from the Sullivan County casino. In exchange for this concession, the state would agree to leave the Akwesasne reservation alone.'' He remains adamant that if such an agreement is ever forged, it must be approved via a referendum at Akwesasne.

Ransom said that state negotiators have told him that they are still ''interested'' in negotiating such a trade agreement.

''The tax issue with the state is not going to go away,'' Ransom said. ''I believe the state is going to attempt to seek tax agreements with tribes that involve tax revenue sharing by tribes to the state for sales on reservations. I think they want to model it after tax compacts in other states. I believe very recent Spitzer comments reflect that position.''

Compact comparison

Terms of the compact between Albany and the Seneca Nation of Indians, signed April 13, 2002, offer an interesting comparison. Under that agreement, the Senecas ''shared'' 18 percent of their net slot-win (after payment and before expenses) with Albany on an annual basis. That percentage rose to 22 percent on a semi-annual basis during years five through seven, and will jump to 25 percent quarterly for years eight through 14 of the compact.

This compact, which governs the Senecas' two existing casinos in Niagara Falls and Salamanca and a third currently under development in Buffalo, has a 14-year lifespan with an automatic seven-year renewal if neither party objects within 120 days of expiration. The Senecas do not collect the state's sales taxes.

Rather than making direct impact payments, local infrastructure impacts are covered by taking a percentage from the payments to the state and earmarking it for the affected county and local governments.

The Seneca/Albany compact also stipulates that if Albany agrees to a compact with another tribe on terms more favorable to that tribe than that compact's terms are to the Senecas, the nation may automatically apply the better terms to its compact.

The Oneida Indian Nation of New York currently operates its Turning Stone Resort and Casino under a compact signed in 1993. That agreement calls for no revenue ''sharing'' and contains no expiration date. [Indian Country Today is owned by Four Directions Media, an enterprise of the OIN.]

If it comes to fruition, the Mohawk Monticello Raceway Casino will be located in Sullivan County, a 90-minute drive from New York City. As proposed, the $600 million gaming facility will contain a 200,000-square-foot gaming floor with 3,500 slot machines and 125 table games. Other amenities will include restaurants, entertainment facilities and retail stores.

The casino will be located adjacent to the Monticello Raceway, a harness track owned by Empire Resorts Inc., the company that has partnered with St. Regis to construct and operate the tribe's casino.

Best estimates indicate that the casino will create approximately 3,000 permanent full-time jobs and will attract some 6 million visitors during its first year of operation.

The St. Regis tribe currently operates two gaming facilities at its reservation on the St. Lawrence River in northern New York - the Class III Akwesasne Mohawk Casino and the Class II Mohawk Bingo Palace. These operations employ 1,200 people, according to the tribe's Web site.