Tribes, racetracks square off in New York

Tribes, tracks square off in New York over competing gambling plans.

Native American tribes and New York racetracks are squaring off over competing plans to expand casino gambling in the state, a fight with implications from Atlantic City and Las Vegas to Thoroughbred and harness tracks across New York.

“Let the markets sort out what the saturation point is and what’s appropriate," Kim Vele, president of the Stockbridge Munsee Community, a Wisconsin tribe trying to build a casino in the Catskills region of New York, testified Sept. 7 at a state Senate panel considering various gambling initiatives.

“It will be the death of racing," James Featherstronhaugh, president of the New York Gaming Association, a racino consortium, said of plans by some advocates to open new casinos.

No one yet knows how far state officials are willing to go, though it seems certain that government leaders, from Gov. Andrew M. Cuomo to Democrats and Republicans in the legislature, want some sort of expansion of gambling in New York to stem the flow of betting dollars out of state.

On the table at the legislative hearing was a new plan by the nine racetrack-based casino operators to permit them to expand their operations beyond video lottery terminals to include a full array of table games. The tracks are also calling for any expansion of gambling options to be limited to just their operations, arguing they already have proven ventures that provide a steady flow of revenues to the state and racing industry.

The tracks are proposing a change in the state constitution to permit the table games expansion, an effort that could not go before voters until November 2013 at the earliest.

Native American tribes, including the Seneca Nation in Western New York and Shinnecock Indian Nation on Long Island, are instead calling for the state to back additional Indian-owned casinos. They say a constitutional amendment's passage is a risky gamble. Moreover, they note the Obama administration recently changed federal policy to permit tribes to open off-reservation casinos.

Randy King, trustee chairman of the Shinnecock tribe, told lawmakers they should consider Aqueduct--its casino is set to open next month after 10 years of delays--as a lesson for not relying on the tracks to expand gambling revenues.

“We have built an industry in this state," responded Featherstonhaugh, an Albany lobbyist with a financial interest in the racino in Saratoga Springs. He said tracks will pump more than $1 billion in construction if the table game expansion is approved and that they have been pumping in hundreds of millions of dollars a year since the first racino opened eight years ago.

He said the state should avoid the geographic “cluster" approach to casino gambling and permit racinos--already in all major areas of the state--to expand gambling options to bring in more bettors.

Christian Goode, vice president of Genting International, the Malaysian-based developer of the Aqueduct casino, said upwards of 20,000 people could be employed at the track in the years ahead if the additional gambling is approved--giving the green light to a proposal to build everything from a hotel to convention center around the Queens track.

Featherstonhaugh acknowledged that the racino plan would end the exclusivity agreement between the state and the Seneca Nation that calls for about $100 million in annual revenue-sharing payments by the tribe. But he said the tribe stopped paying that tab a couple years ago in a dispute with Albany. The tribe, however, says the racino proposal would put at risk jobs at its three casinos in Western New York; they also say its withholding of revenue sharing funds to the state is, in part, due to racino gambling offerings at three tracks in the region, including Finger Lakes racetrack, that violate the terms of its 2002 compact with Albany.

Lawmakers at the hearing sought to remain open to various plans. But Senate Racing Committee Chairman John Bonacic said the “biggest challenge" is an issue of oversaturation of casino gambling in New York.

“I think we are localizing gambling and that’s a problem," added Sen. Joseph Griffo, a central New York Republican who voiced concerns that New Yorkers will still go to gamble in places like Las Vegas, especially if there are too many non-destination type of casinos in the state.

Griffo said lawmakers are searching for a “more efficient way" to conduct gambling in New York.

A union official, meanwhile, urged lawmakers to ensure that any future casino expansions include worker protections to guarantee certain wage and benefit levels.

“Absent the firm guiding regulation and leadership of the state, the gaming industry will pay workers low wages, provide little or no healthcare, and little or no retirement benefits.  Workers will go home from bad jobs with little to give back to their communities," said Josh Gold, political and strategic director for the 30,000-member Hotel & Motel Trades Council.

Gold said the state must “make it clear" that casino workers be guaranteed certain protections, including the right to organize a union.