Albany Times Union Wades in On Tribal Areas of Exclusive Gambling

I am just going to post the whole thing........

Perhaps at one time New York state’s strategy of sitting out the Seneca on the issues surrounding casino gambling had a point. Not any more. Not when this impasse is hurting communities.

It’s way past time for the state and the tribe to settle their differences, of which there seem to be fairly few, none of them terribly complex. An accord could free up hundreds of millions of dollars for the state and municipalities at a time when they clearly need it, in some cases desperately.

The benefits of not working this out? Short of keeping negotiators employed, perhaps, we have no idea.

The dispute, which has been going on for several years now, is centered on competition the Seneca face from state-sanctioned racetrack video lottery terminal parlors. The tribe, which operates casinos in Buffalo, Niagara Falls and Salamanca, wants three things: that the racinos not call themselves casinos; that the VLTs not be called slots, and for the state to say it will honor its word not to put competing casinos in their areas through 2023, even if voters legalize non-tribal casino gambling.

Those would seem to be three simple requests. But the state is holding out for a comprehensive solution to other issues surrounding its relationship with tribes, such as the notoriously long and complex saga of Native American land claims. As a result, the Seneca have held back $400 million in gambling proceeds.

The state has a similar problem with the Mohawks, although the amount of money they’re holding back is far less.

To be sure, the state can arguably wait the tribes out, since it’s taking in hundreds of millions of dollars a year from VLTs. Last year, the state says its cut for education from VLTs was $667 million, and the figure has been growing annually in recent years. If this year’s trends stay on track, revenue will be up 45 percent — approaching $1 billion.

The Cuomo administration is also looking to get voters to allow full-fledged casino gambling in the state, which would likely make anything the tribes give it look like a pittance.

It wouldn’t however, square with the state’s exclusivity agreements with tribes limiting competition around their casinos in exchange for a cut of their proceeds. Violating that, which the tribes say the racinos have done at least semantically, is a moral issue Gov. Andrew Cuomo and the Legislature should consider. New York’s and America’s history with Indian tribes is hardly something to be proud of.

If the concept of fair play isn’t enough for the state, there’s a more practical consideration here. Caught in the middle of this gamesmanship are communities like Niagara Falls and Buffalo, which were supposed to get a quarter of the money the state took in from Indian gaming. They’re out an estimated $100 million to date. And the state is out $300 million since 2009, hardly small change even for New York.

Would the racinos make substantially less money if they never used the words “casino” or “slots”? Would it really cost New York that much to rule out casino gambling in the western and northern parts of the state for the next decade or so? After all, New York is, at best, years away from legalizing non-tribal casino gambling. And the real money is closer to New York City anyway.

And if the state won’t do the right thing morally or financially, then it should say why not. Communities struggling to pay their bills are owed at least that much.

http://blog.timesunion.com/opinion/new-york%E2%80%99s-%E2%80%A8dicey-bet/21361/

Indians, the Internet and Withheld Payments to Localities

As things ramp up on the National Level for Internet Gaming, the Native Communities are flexing their muscles in DC.

The Senate Committee on Indian Affairs (SCIA) released a discussion draft bill on Internet gaming titled the “Tribal Online Gaming Act of 2012.” The draft was publicly announced to Tribal Leaders gathered at the National Indian Gaming Association’s Legislative Summit in Washington, D.C.

 A summary provided by the SCIA acknowledges the important economic contributions that Indian gaming provides to this country. It states that Indian Gaming “has created 628,000 jobs for Indians and local communities, and comprises 40 percent of all gaming in the United States,” and finds “that any federalization of online gaming must provide positive economic benefits for Indian Tribes.”

http://indiancountrytodaymedianetwork.com/2012/07/26/scia-releases-draft-internet-gaming-bill-at-niga-legislative-summit-125633

You have to love Robert Odawi Porter, President of Seneca Nation.  He can speak so eloquently, he can make gaming sound poetic.

Robert Odawi Porter, the president of the New York-based Seneca Nation of Indians, said "a thousand flowers bloomed for Indian nations" after Congress allowed tribes to enter the big leagues of gambling in 1988. At a Senate Indian Affairs Committee meeting in February, he said online gaming threatened tribal sovereignty and the tens of thousands of jobs the casinos had created.

http://www.kansascity.com/2012/07/29/3729872/tribes-fear-that-legalizing-online.html#storylink=cpy

However, the municipalities are not looking so kindly upon the Seneca and Mohawks nations right now.  The Albany Times Union is reporting today on the withheld Indian payments to localities:

The Seneca and Mohawk tribes have for years withheld casino payments to the state, claiming that New York violated contracts with the tribes by allowing gambling in their exclusive territories. Consequently, the state stopped sending money — more than $100 million so far — to municipalities where Indian casinos operate.

Without their share of casino money, the local governments are straining to provide basic services. And with no compromise in sight, arbitrators may have to resolve the long-running dispute.

The Seneca Nation of Indians, which operates casinos in Buffalo, Niagara Falls and Salamanca, stopped sending payments starting in 2009. They say the state violated the compact that gives the Seneca exclusive gambling rights west of the Finger Lakes when it allowed three western New York harness tracks to operate video lottery terminals.

 Seneca President Robert Odawi Porter said about $400 million worth of withheld payments to the state has been placed in escrow. A quarter of the money would have gone to host cities like Buffalo and Niagara Falls.

The St. Regis Mohawks, who operate a casino on their land straddling the Canadian border, separately decided in October 2010 to stop making payments, citing slot machines operating on Indian territory elsewhere in northern New York.

http://www.timesunion.com/news/article/Casino-fight-brings-pain-3745145.php#ixzz227JCnRBn

Internet Gaming and the Indian Tribes

Internet Gaming and the Tribes

I had written earlier this year about the Justice Department opining that Internet Gaming per se is not in violation of Federal Law.  I have not been reporting it closely because New York has, as yet, not shown any real interest.  However, with Congress crawling towards national regulation of on line gaming, the Indian Tribes want to ensure that they get their piece of the action.  Now, this will impact New York as certainly the Oneidas and the Senecas and possibly the Mohawks have the resources,  interest and experience to jump into this ring.

As it stands, New York State will not be entitled to a piece of anything the Tribes garner if they venture into this market.

So now, I will try and keep you updated.

And now the news:

Since a December 2011 Department of Justice opinion that not all Internet gambling is banned by federal law, Delaware has legalized online gambling and Nevada is closing in on making online poker possible. New Jersey, too, is working to make it a reality.

With some states readying to start online gambling, Native American tribal leaders are calling on the federal government to step in as it did with brick-and-mortar gambling and establish regulations that ensure tribes get a piece of the action without having their revenue taxed and their sovereignty compromised.

http://abcnews.go.com/Technology/wireStory/tribes-federal-regulation-internet-gaming-16865932

Indian Affairs Chairman Daniel Akaka, D-Hawaii, has released a draft bill that would outline rules for allowing online gambling by Indian tribes. Like other measures that have been introduced, the Tribal Online Gaming Act would only authorize online poker. Supporters say unlike other forms of Internet gambling, online poker is a game of skill and less susceptible to manipulation.

The Senate Indian Affairs Committee examined how proposals that call for legalizing online poker might impact the current gaming operations offered by Indian tribes. Senate Majority Leader Harry Reid, D-Nev., and Minority Whip Jon Kyl, R-Ariz., are currently in negotiations on developing a proposal that would legalize online poker in exchange for tightening restrictions on other forms of Internet gambling.

http://techdailydose.nationaljournal.com/2012/07/tribes-want-input-on-net-gambl.php

New Jersey

Just as New York appears closer to legalizing gambling, New Jersey Governor Chris Christie is blocking attempts to expand his state’s gambling options beyond Atlantic City, according to Bloomberg News.


After Pennsylvania legalized slots in 2006 and table games in 2010, it began usurping gambling revenue from Atlantic City. In fact, revenue for boardwalk casinos has fallen 37 percent since 2006, to $3.3 billion last year. And with more competition likely to arrive from New York, lawmakers want to amend the state constitution to allow casinos near the Meadowlands, closer to Manhattan.
 But Christie said he wouldn’t back expansion until he knows for certain he can’t turn around Atlantic City. “Atlantic City deserves to have five years to try and get itself revitalized and back on its feet,” Christie has said. He’s working to encourage development in the area, and already gave a $261 million tax break towards the development of the boardwalk’s first new casino in a decade, the Revel.


Newmark Grubb Knight Frank Chairman Jeffrey Gural is pushing Christie to reduce his time frame. He owns the Meadowlands racetrack and wants to develop a casino on the site, which he said could net the state $350 million a year, depending on how it taxes that revenue. Most importantly, analysts say, it would help stop some of the cash-strapped state’s potential gaming revenue from trickling across state lines.

http://therealdeal.com/blog/2012/07/26/gov-christie-opposes-gambling-expansion-to-protect-atlantic-city/

Saratoga Race Course is Off to a Very Good Start

On track handle, total handle, and attendance posted increases from 2011 after the first four days of racing (July 20-23) at Saratoga Race Course, according to the New York Racing Association.

Attendance for the first week was 75,369, up 2% from 73,875 in 2011.

On-track handle for the week totaled $12,731,605, up 14.2% from $11,146,737 last year.

All-sources handle, which includes wagers on Saratoga races both on-track and from simulcast outlets nationwide, was $63,688,669, up 12.3% from $56,688,557 last year.


Read more on BloodHorse.com: http://www.bloodhorse.com/horse-racing/articles/71499/spa-wagering-up-first-four-days#ixzz21YPBk3Zc

The interesting thing here is why attendance is not up all that much, the handle is disproportionately up.  People are spending and betting again.

2012 Saratoga Institute Conference On Racing and Gaming Law

On August 14th and 15th, the Albany Law School Saratoga Institute will be once again be holding its Conference on Racing and Gaming at the Gideon Putnam Hotel in Saratoga Springs. 
The first day is going to focus on more of the nuts and bolts of what is going on in horse racing in New York today.
The second day is going to focus more on the gaming side of the equation.  Under discussion shall be:
Siting of Casinos in New York: From Racinos to Resort Destinations;
On-Line Gaming in New York; and
A New NYRA with a New Regulatory Framework.

The Siting of Casino discussion should be lively as Robert Odawi Porter, former Professor of Indian Law at Syracuse Law School and the current President of the Seneca Nation is one of the panel speakers.  In the Seneca's Gaming Compact with the State of New York, the Senecas were granted a  exclusive right to offer slot machines and other gaming devices west of State Route 14.  State Route 14 (I had to get out my map) runs from Seneca Falls down to Elmira.  That is one big chunk of real estate! Seneca Nation takes the position that since the State has authorized VLT's at Batavia Downs and Hamburg Casino, the State has violated the Compact.

Needless to say, Seneca Nation does not want any of the potential full blown casinos envisioned by Governor Cuomo to be placed in their back yards, siphoning off customers.

The discussion of the Reorganization of NYRA should be interesting as well, with representatives of the industry and the regulatory government piping in.  However, I wish they had gotten some elected representatives up on the panel to discuss where they see this going from a policy perspective.

For more information on the event:

http://www.albanylaw.edu/sub.php?navigation_id=2151

And the NYRA Takeover is Firming Up.

Fred Dicker of the New Post Reported yesterday that Governor Cuomo will make his move on NYRA after completion of the Saratoga Meet.

Gov. Cuomo will put the New York Racing Association out of its scandal-scarred misery “promptly” after the historic Saratoga Race Track meet that begins this Friday, The Post has learned.

The much-anticipated Cuomo action, authorized by the Legislature last month in the wake of a long series of NYRA scandals, will take the form of the appointment of a new 17-member board of directors, a majority of which will be picked by Cuomo and the legislative leaders.
It is rumored that Current NYRA President/CEO Ellen McClain will be fired as part of the transformation as soon as the meet ends on September 3.

http://www.nypost.com/p/news/local/cuomo_whip_coming_down_OtS0rKivU181FjKqojxjfN#ixzz20t4Q2ZzL

I had missed this article a couple of weeks ago, but names are being floated out there for possible appointment to the new NYRA Board.  Some very good candidates and a couple who may be too bureaucratic in their approach to like.
http://www.saratogian.com/articles/2012/07/03/news/doc4ff1ce1e4531f423660891.txt?viewmode=fullstory

Some people in the horseracing industry are concerned about the NYRA Board appointment process.

http://www.horseraceinsider.com/players-up/07152012-where-is-press-spotlight-on-nyra-board-appointment-process/

http://tenoonan.com/2012/05/18/something-fishy-about-nyra-controversy/

OK, It Appears that NYRA has a LOONNNGGGG Way to Go

The Oversight Borad for NYRA (Where have they been for the last decade?) has issued a report of their review of NYRA, indicating that the out of control spending by NYRA, if it does not abate, will outstrip the income from VLT's.  That is a whole lot of money!

Is this report blowing smoke to make it politically palitable to reign in NYRA, or have things actually been that bad?

The board that oversees New York state’s horse racetracks is urging the New York Racing
Association to take steps to boost revenue beyond video lottery terminals in order to remain in financial health.

The Franchise Oversight Board in an extensive examination of the Adqueduct Racetrack, Belmont Park and Saratoga Racecourse presented its view of the state of the sport, outlined financial improvements due to video lottery terminals and called for efforts to reinvigorate racing.

While the board said video lottery terminals provide a way of supplementing income, it indicated that horse racing itself must be operated in a way that is profitable.

The report, which outlined concerns over the credibility of the sport and growing costs amid declining wagering on races, cited “NYRA’s growing expense structure in the face of declining handle across the industry.”

“This status quo is simply unsustainable,” the board wrote. “If expenses are allowed to continue to grow, not even the substantial investment made by the state into NYRA through the VLT support payments will be enough to cover the losses incurred by NYRA’s operations.”

NYRA in 2011 lost more than $24 million, up 40 percent from a $17 million loss in 2010, despite a $6.3 million infusion from the introduction of video lottery terminals at Aqueduct. NYRA’s growing salary and fringe benefits, according to the report, helped boost general and administrative expenses by 14.7 percent or $20.9 million in 2011.

NYRA projects $18.9 million in profit for 2012, due to $20.6 million in payments from VLT proceeds and $27.5 million in VLT capital funds, according to the report.

http://libn.com/2012/07/06/ny-tells-nyra-to-look-beyond-vlts-for-revenue/