Updated:
Original:

Reversal for fortune: N.Y. Cayugas drop anti-gaming stand

Author:

VERSAILLES, N.Y. - Surprising turnarounds continue to mark the growth of Indian gaming in New York state.

The Cayuga Nation, formerly on the anti-gaming side of an ideological split in the Six Nations of the Haudenosaunee (Iroquois League), announced a deal April 7 with Alpha Hospitality to develop a $500 million casino at Monticello Raceway, a harness horse track at Monticello in the state's faded Catskills resort region. The announcement revives earlier plans to put 29 acres at the site into federal trust for an Indian casino.

Clint Halftown, Cayuga chief, said his tribe continued to oppose gaming on its own ancestral territory on the northern side of the Catskills range but he pleaded overwhelming economic reasons for the deal. "The Cayuga people have been landless and in economic distress for over 200 years," he said in a prepared statement. "Our people need housing, education, medical care and the means to keep links to our culture and our land."

According to Martin Gold, lawyer for the Cayuga Nation, the shift reflected a unanimous decision by the Cayuga Tribal Council, reached earlier this year as Alpha Hospitality broached its proposal. The Cayuga Nation is now submitting a comprehensive land-into-trust application to the BIA.

The gaming foray, said Halftown, also reflects frustration with the slow pace of the Cayuga land claim suit. U.S. District Court Judge Neal McCurn awarded $247.5 million in damages last year, ruling that New York state illegally took more than 64,000 acres of the tribe's land at the turn of the 19th century. But the state, Cayuga and Seneca counties and more than 7,000 private landowners are appealing to the U.S. Second Circuit Court of Appeals in Manhattan, recently filing a 249-page brief alleging that McCurn made more than a dozen erroneous rulings in the 22 years he handled the case. The case will be argued orally in the fall.

"It's a major case," said Gold, who is also representing the Cayuga Nation in the land claims. "It could take a long time."

The Cayuga reversal leaves only the Onondaga Nation south of Syracuse and the Tuscarora Nation near Niagara Falls as the remaining Haudenosaunee members in New York to condemn Indian gaming on religious and ideological grounds.

The deal also underscores the complexity of the maneuvering to set up tribal casinos in the Catskills region, a potentially lucrative market just an easy day-trip north of New York city. The principal figure in Alpha Hospitality, Robert A. Berman, is a controversial native of the Monticello area who was spurned after dealing with two other Haudenosaunee governments, the Oneida Indian Nation of Central New York and the St. Regis Mohawks of Akwesasne.

Several tribes, including the St. Regis Mohawks, are pursuing other plans in the region under recent New York State legislation authorizing three Class III casinos in the eastern part of the state and three more, owned by the Seneca Nation, in the west. (According to press reports, the Oneida Nation has also explored a Catskills casino. The Oneida Nation, which already operates the Turning Stone Casino Resort in upstate New York, also owns Four Directions Media, Inc., the publisher of Indian Country Today.)

Complicating the picture, some of the contenders are out-of-state tribes with historic ties to New York, which were pushed west during the Indian removals of the early 19th century.

The deal also reverberates in the Cayuga's back yard, where leaders of the Cayuga-Seneca Nation of Oklahoma have established an outpost with plans to open a bingo hall in the autumn.

On the business side, Berman's Alpha Hospitality is emerging from a tumultuous period following the collapse of an agreement with the St. Regis Mohawk tribe to build a casino at the Monticello Raceway, which is owned by Berman and his group of investors. The BIA approved the project and its off-reservation taking of land into trust just over three years ago in a letter to New York Governor George Pataki on April 6, 2000. But within days, the St. Regis Tribal Council severed its ties to Berman and his group, then working as Catskill Development LLC. The council instead signed an exclusive management contract with Park Place Entertainment, the Las Vegas-based casino giant once known as Ballys.

To push the complications to extremes of mind bogglement, the St. Regis council, a return to a traditional form known as the Three Chiefs council, was then emerging from an intense internal political battle with a rival Constitutional Council, members of which continued to support the deal with Berman. Bitter court battles followed on two fronts, one in a tribal court allied with the Constitutional Council, which was repudiated by the Three Chiefs, and the other in U.S. District Court.

Berman's group charged that Park Place improperly interfered with its contract with the Mohawks and asked enormous damages. The St. Regis tribal court (the one set up by the Constitutional Council) agreed and awarded Berman's group a judgment of $1.8 billion. The Three Chiefs Council promptly dissolved the tribal court, and Park Place sued court officers and the tribal plaintiffs for defamation. The judgment would have no further effect unless courts beyond the reservation were willing to enforce it, and that event became increasingly remote as the BIA recognized the Three Chiefs as the legitimate St. Regis government.

On the other front, the U.S. District Court in White Plains, N.Y. heard out Berman's suit and this February rejected all his claims. Berman's group announced it would appeal, but was not yet clear how the deal with the Cayuga Nation would affect the suit.

In the meantime, the Berman group was engulfed in an internal crisis, wind of which had caused the Three Chiefs to end the management contract in the first place. Alpha Hospitality's other casino venture, gambling boats in Mississippi, was literally a disaster. After years of losing money and accumulating tax liens, its boat, the Jubilation Casino Vessel, was severely damaged in a storm. According to a recent Multex business profile, Alpha "does not have any operations that generate revenue."

In addition, several former associates, principle figures in the Tollman-Hundley Hotels, are under indictment for alleged fraudulent activity. According to an Alpha Hospitality filing with the Securities Exchange Commission, the last of these figures, including the father of a current Alpha director, resigned from the company in February 2002. Gold, the lawyer for the Cayuga Nation, told Indian Country Today, "They're no longer involved with the project."

After hitting a low point late last year in its stock price, however, Alpha has undergone a reversal of fortune closely tied to its negotiations with the Cayuga Nation.

It launched a recapitalization last December shedding a group of investors and consolidating its holdings. As part of the restructuring, Alpha took over rights to the Monticello Raceway from Catskill Development.

Its ace in the hole now is the BIA's prior approval of the site for the Mohawk casino. Although the Cayugas will be making a separate application, Gold said that a good part of the work on major issues was done the first time around. The environmental impact, he said, would be the same. The impact on the community, he said, "hasn't changed." As for the benefit to the tribe, "That's clear," he said.

The new application, he said, differed in giving the tribe a better deal in the management contract. This point could be crucial down the road, since the National Indian Gaming Commission had raised a series of objections to the management contract between Alpha and the St. Regis Mohawks, among others refusing to approve its management fee of 35 percent of net revenues.

Yet, all in all, said Gold, he expected BIA approval to come quickly.