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Let the Games Begin; Akwesasne Compact Finally Ratified

St. Regis casino goes Class III

Good news came for the St. Regis Mohawk Tribe on June 23 when the New York
State Legislature finally ratified a gaming compact for the Akwesasne
Mohawk Casino that the tribe originally signed with former Governor Mario
Cuomo in 1993.

The pact, in the state's view, legitimizes slot machines in play at
Akwesasne, in far northern New York, since the casino opened in 1999. Terms
of the deal call for the tribe to install 1,000 slots within a year, and
for Albany to receive 18 to 25 percent in slot machine revenue sharing. The
northern counties of Franklin and St. Lawrence get 25 percent of the
state's take.

According to a report in the Plattsburgh Press-Republican, the state's
total take is estimated at $7 million to $10 million in the deal's first
year, increasing to $15 million to $20 million as revenue sharing reaches
its 25 percent maximum after seven years.

In June 2003 the Court of Appeals, the state's highest, ruled invalid two
1993 gaming compacts with St. Regis and the Oneida Nation. The court
nullified the deals, both negotiated with Gov. Cuomo and containing no
revenue sharing provisions, because they were never ratified by the
legislature.

The casino is one of the few bright spots in economically moribund Northern
New York, employing about 460 people and generating over $45 million in
direct annual spending throughout the region. Had the Democrat-controlled
Assembly failed to approve the compact before adjourning, the tribe would
have likely jettisoned the Class III slots and some employees in favor of a
smaller-scale Class II facility. The state Senate ratified the compact late
last year.

The compact governing gaming at the Turning Stone Casino Resort, owned by
the Oneida Nation, was ruled invalid on June 28. (see related story)

PUBLIC COMMENT

Also on June 23 was a BIA public hearing at Monticello, N.Y., concerning
the draft environmental impact statement on a proposed casino to be owned
by the St. Regis Tribe and operated by Las Vegas-based Caesar's
Entertainment Inc.

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The Middletown Times Herald-Record reported that much of the sentiment
expressed at the meeting in this Sullivan County town was hostile to the
impact statement, particularly in regard to traffic on U.S. Route 17, the
primary route through the region, located some 90 miles northwest of
metropolitan New York City. Residents of neighboring Orange County were
reportedly on hand as well, seeking financial compensation for
casino-related impact on Orange's roadways.

The BIA has taken the proposed site, 66-acre parcel, into trust, but
compact negotiations with the state are apparently stalled.

WHAT'S NEXT?

Reports continue to come from Rochester regarding a pending deal between
Gov. George Pataki and the Seneca-Cayuga Tribe of Oklahoma to place a
casino in this Finger Lakes city.

For years Pataki claimed that he would not negotiate with "out-of-state
tribes" for gaming rights in New York, only to flip-flop in October 2003,
when he said he would entertain offers for the three Legislature-authorized
Catskill casinos from tribes currently located outside the state's borders.
The Seneca-Cayuga, however, are a winning party in the $247.9 million
Cayuga land claim decision, which remains on appeal.

Pataki desperately wants to end the land claim litigation and has reached a
memorandum of understanding with the New York-based Cayuga Nation. The
Oklahoma tribe is attempting to build a bingo hall on land within the claim
area, an effort stymied by lawsuits from surrounding municipalities.
Indeed, there remains considerable local opposition to Indian sovereignty
and gaming within the 64,000-acre Cayuga land claim area.

Perhaps in redirecting the Seneca-Cayuga to Rochester, Pataki hopes to
avoid the prospect of two tribes, the Cayuga Nation and the Seneca-Cayuga,
exerting sovereignty within the same land claim. Or perhaps he seeks an
economic boost for the Flour City.

But in Rochester, he runs into two potential problems. One is that the
Pataki-Seneca compact of 2002 gives the Seneca Nation slot machine
exclusivity from Western New York to Seneca Lake, an area within which
Rochester lies. By all indications, however, the Seneca-Cayuga are
negotiating for a Class II facility. The other roadblock could come from
other politicians; Rochester's mayor is outspokenly anti-casino and
Assembly Speaker Sheldon Silver has reportedly questioned the idea of
gaming in Rochester.

With a newly established hydrofoil ferry to Toronto, a revitalized
waterfront and other regional attractions, Rochester could be a strong
casino/resort market. But as with everything else in the ongoing New York
casino saga, we'll just have to wait and see what's next.