Proponents and detractors of a Sullivan County casino that would be run by the St. Regis Mohawk tribe may have several more months to state their respective cases.
The U.S. Department of the Interior, which must approve the project since it lies hundreds of miles away from the nearest Mohawk tribal land, has said a decision is not imminent.
But one prominent expert on the legal aspects of Native American gaming says the Mohawks may not have such a hard time getting their off-reservation casino approved.
“I think the doors have already been opened in the state of New York,” said Joseph M. Kelly, a professor of business at SUNY Buffalo.
Kelly said if this were the first Indian gaming facility in the state, it might face a tougher challenge. New York currently has four Native American-run casinos, although none of them are off-reservation. However, Kelly noted, there are other off-reservation casinos in the U.S.
“If this were the first off-reservation casino, it would be different,” he said.
Kelly said he believes the Mohawks don”™t have such a difficult path to approval, in part because the federal government has already done an “exhaustive environmental study” of the impact of a casino in the Catskills; there have been several other casino projects proposed in the area for many years.
Kelly, in fact, was an “expert witness” for Park Place Entertainment when that entity unsuccessfully tried to build a casino/resort in the Catskills earlier this decade.
“I think the hurdles have been pretty been surmounted,” for the Mohawks, he said.
Under the compact signed last month between Gov. Eliot Spitzer and the St. Regis Mohawk tribe, the state will receive 20 percent of revenues from slot machines for the first two years, 23 percent for the next two years, and 25 percent thereafter.
The agreement amends an existing compact with the Mohawks, granting the tribe authority to build and operate a gaming facility adjacent to Monticello Raceway. A 2001 state law allowed for three Indian-run casinos in the Catskills, although none have been built.
Kelly said he believes since the state supports the casino that that will influence the federal government”™s decision. “They put a lot of deference to a state compact.”
A spokesman for the Department of the Interior”™s Bureau of Indian Affairs previously told the Business Journal that approval by the department is not guaranteed because of the compact.
Kelly said it is not likely the state will be able to renegotiate the compact and ask for more, such as charging sales tax on cigarettes, because compacts between state governments and tribes nationwide generally focus on slot machine money.
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In fact, Kelly said the Pequot tribe, which operates Foxwoods Resort and Casino in eastern Connecticut, and that state were the first to agree to such a compact, in the nearly 1990s.
“Technically, the (federal) Indian Gaming Regulatory Act says the state gets no revenues except for what they spend policing the casino,” he said. “But the (Connecticut) governor didn”™t complain, the Pequot”™s didn”™t complain and there was no complaint from the federal government. Since then, it allowed almost any other state to take slot money, but it”™s not likely to be any more than slots.”
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Casino competition
For those in the lower and mid-Hudson Valley who want to go to a class III casino, which offers table games as well as slots, the two casinos in eastern Connecticut are probably the closest options.
But if the Sullivan County casino opens, it will take a portion of those gamers away, said Dr. Richard Toltheimer, an economist who heads Toltheimer Research Associates in Lexington, Ky.
“It”™s obviously going to have a negative impact, but it”™s hard to tell how much of an impact,” he said.
According to a study by the Center for Policy Analysis at the University of Massachusetts-Dartmouth, approximately 22 percent of Mohegan Sun”™s customers and 11 percent of Foxwoods”™ come from New York state.
Mitchell Etess, president and chief executive of Mohegan Sun, said he is not overly concerned about potential competition since Mohegan Sun bills itself as a “destination resort” featuring entertainment and sporting events in addition to casino gaming.
However, those solely interested in gaming will likely travel to the nearest venue, Toltheimer said.
The closer another gaming option arises in a market Mohegan Sun and Foxwoods are drawing from, such as New York, “the greater the impact will be of losing some of that market,” he said.
Tolheimer added that the impact of the Catskills resort on “racinos,” which offer video-gaming machines but no table games, such as Empire City at Yonkers Raceway, would likely be less significant since many slot players don”™t play other games.
Someone who lives in Westchester and only wants to play slot machines would likely not stop going to Yonkers in favor of the Catskills, he said.
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