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Let the Games Begin: New York casino legislation upheld

In the on-going New York State casino saga, the latest chapter was written on July 17 when a state Supreme Court judge ruled to uphold legislation enacted in 2001 authorizing the construction of six Indian casinos in the state. While the state's tribes and other proponents of Indian gaming may certainly welcome the decision, the story is far from over.

Judge Joseph C. Teresi, in an 11-page decision, said earlier federal court rulings allowing Indian-owned casinos "must be upheld" in spite of a state constitutional prohibition against casino gambling.

Cornelius Murray, lead attorney for those opposing the casino legislation, promised an appeal. "We still feel we have a very strong case," he told the Associated Press after the ruling was announced.

The legislation in question, approved in October 2001, also authorized the installation of video lottery terminals at horse racing tracks around the state, which has yet to happen, and New York's entry into the multi-state Mega Millions lottery game, which has occurred.

Judge Teresi also ruled video gaming machines were "true video lotteries" even though "their outward appearance" is similar to that of a slot machine. The judge said the machines, also known as video lottery terminals or VLTs, were "substantially similar" to scratch-off lottery tickets readily obtainable throughout the state and thus legal.

On July 18, the Albany Times-Union reported that Mid-State Raceway Inc., owner of the Vernon Downs harness racing track, will on Aug. 1 break ground on a 32,000-square-foot facility in which it hopes to put 1,100 video lottery terminals into play by November. The track is located only about five miles from the Oneida Indian Nation's Turning Stone Casino Resort.

In the wake of the Sept. 11 terrorist attacks, Albany sought these measures as well as the six casinos to create a revenue stream and with it inject funds into the financially ailing state's depleted coffers. To date, only one of those six casinos has opened - the Seneca-Niagara Casino is located in downtown Niagara Falls and is operated by the Seneca Nation of Indians. While that casino, which opened last New Year's Eve, has been reported to have heavy visitation, the quarterly revenue sharing amounts paid to the state have not been made public.

A Buffalo public radio station, WBFO, reported on July 22 that members of the Seneca Nation (who under the Indian Gaming Regulatory Act are to be the primary beneficiaries of revenue from their casino) are now able to take advantage of tribal scholarships, a burial plan and a home improvement program. Tribal president Rickey L. Armstrong told the station that because gaming revenues have exceeded expectations, tribal leaders are highly motivated to move forward with their other two authorized casinos.

The Senecas are currently examining potential sites for a second casino in and around the City of Buffalo, while tribal members will decide by referendum on Sept. 9 whether to locate a third casino on either of its Allegheny or Cattaraugus reservations.

On June 12, the state Court of Appeals, New York's highest court, declared invalid by a 4-3 vote a 1993 compact negotiated between the St. Regis Mohawk Indians and former Governor Mario Cuomo on the grounds that the deal never received legislative approval. Although the state Legislature failed to address the issue by retroactively ratifying the agreement before adjourning for the summer the following week, the tribe's Akwesasne casino in remote Hogansburg is not expected to close.

On July 7, Governor George Pataki announced his intention to appeal the Mohawk compact case to the U.S. Supreme Court. The governor also asked the state Court of Appeals, to stay its June 12 ruling in order to allow for continued state regulatory oversight of gaming on Mohawk territory. That stay expires on Aug. 1.

Another lawsuit, this one challenging the validity of a 1993 compact agreement reached by the Oneida Nation and Cuomo on the grounds of no legislative approval, is working its way toward the Court of Appeals. Current Governor Pataki succeeded Cuomo in 1994 and was elected to a third term in 2002.

Catskills

In an attempt to move the Catskill casino process forward, Pataki on May 12 signed a comprehensive tentative agreement with the St. Regis Mohawks. Provisions of this deal would have: settled the tribe's land claim against the state; given the tribe rights to one of the three authorized Catskill casinos; and instituted a concept called "price parity." The latter would have required Mohawk business owners who do not collect state taxes to increase their prices to levels comparable to prices charged by non-Indian competitors who do collect the state sales tax.

Since the agreement was signed, however, St. Regis members have elected a new government, which is seeking a re-negotiation of the deal. The New York Legislature never ratified this agreement.

The St. Regis tribe in November 2001 signed a seven-year operating agreement with Las Vegas-based Park Place Entertainment Inc. to develop and operate a $500-million, 750-room casino resort at Kutsher's Sports Academy near Monticello, N.Y., only 90 miles from the potential lucrative metropolitan New York City market.

Last April, the Cayuga Indian Nation inked a deal with casino operator Alpha Hospitality Corp. (which is now known as Empire Resorts Inc.) while also applying to BIA to take a 30-acre parcel of land at the Monticello Raceway in Monticello into trust for gaming purposes.

The Oneida Nation has also expressed an interest in one of the three Catskill casinos. It would appear, based upon previous success (in the case of the Oneidas) and upon federal recognition and financial backing (in the cases of the Mohawks and Cayugas) that these tribes would be the front-runners in the quest for the three Catskill casinos.

Long Island

Gaming issues have also hit the headlines in an unlikely spot - eastern Long Island, where the Shinnecock Indian Nation has begun clearing tribal land in Southampton on which they propose to build a casino. The tribe has met with vigorous resistance; both the state Attorney General and the Town of Southampton have filed suit in state court against the tribe. On July 16, tribal attorneys moved to have both cases transferred to federal court. A state Supreme Court judge has issued a temporary restraining order barring further construction activity by the Shinnecocks until the case is resolved.

Although state-recognized, the Shinnecocks have not been granted federal recognition although they have applied to BIA for such. Tribal officials have been quoted in various media as saying that they need not abide by state and local laws in the permitting and construction processes.

While the tribe's location on the south fork of Long Island has incredible potential for a successful casino, federal law (IGRA) only grants gaming privileges to federally recognized tribes. Unless that recognition is granted and the state authorizes additional casinos, the Shinnecocks are likely in for a long battle.

Although it's closing in on two years since the New York Legislature authorized the building of three Indian casinos each in the Catskills and in Western New York, only one of those casinos has become a reality. Continued legal wrangling ensures, for the time being at least, that the potential financial benefits of Indian gaming will not be enjoyed by the tribes (except the Senecas), the state or local municipalities and counties any time soon.