Park Place, Mohawks catch heat over Catskills deal

March 27, 2001 6:44 AM
by

share

Controversy raged last week when Park Place Entertainment (PPE) and its partners, the Mohawk Indians of northern New York, made an application to the U.S. Bureau of Indian Affairs to build a casino at the legendary Kutsher’s in the Catskills.

Under the plan, the property would be held in trust for the Mohawks while PPE renovates the huge hotel into a casino. The plan, conceived by the late Arthur Goldberg, was announced last April. Part of the delay was caused by Goldberg’s untimely death in October.

Prior to the filing, Park Place Entertainment was sued by Catskill Development, which had the original deal with the Mohawks but was cast aside when Park Place came into the picture.

Also, a dissident group of Mohawks sued Park Place Entertainment in the St. Regis Mohawk tribal court and was awarded a judgment of $1.8 billion. The allegation was that PPE had induced three tribal chiefs to break the agreement with Catskill Development, derailing the process that could have resulted in a casino in Sullivan County much sooner than the Kutsher’s deal.

Park Place said the tribal court was invalid and had no power to act in the matter.

Solid February numbers

Maybe it was all the publicity the New Orleans Harrah’s Casino received while state politicians considered its fate but, whatever the reason, the controversial property had gaming revenues of $23 million in February.

This was a major turnaround from January, when it banked $18 million, and February the year before, when its total was $20.4 million. In the past few weeks, the casino was much in the news as Gov. Mike Foster battled with state lawmakers to provide the owner, JCC Holding Co., and its 43% partner, Harrah’s Entertainment Inc. (HET), with a major cut in its mandated $100 million annual tax.

On the local front, JCC Holding negotiated with the city to reduce its annual tax, as well as with local hotel and restaurant owners for the privilege of expanding its hospitality services.

Last week, Foster generated enough support to reduce the tax to $50 million this year, and $60 million for the next two years. Had the relief not been granted, Harrah’s Entertainment said it could no longer have carried the burden of providing the $100 million annually and the property would have had to close.

JCC Holdings’ Fred Burford said he knew of no particular reason why the casino did so well in February, other than perhaps it was just catching up from a poor January.

Hospitality Summit

The inaugural Millennium Hospitality Summit, attracting industry leaders from around the world, will be March 29-April 1 at four hotels in Las Vegas: The Venetian Resort Hotel Casino, Bellagio Resort Hotel, The Rio Hotel, and the MGM Grand Resort Casino.

Speakers will include Terry Lanni, chairman and CEO of MGM MIRAGE Inc. (MGG); Gary Loveman, COO, Harrah’s Entertainment Inc. (HET); Brad Stone, executive vice president, Las Vegas Sands Corporate/Venetian; and Richard Goeglein, president and CEO, Aladdin Gaming.

Celebrity chef Wolfgang Puck, operator of a half dozen restaurants in Las Vegas, will put on a special cooking demonstration. Arte Nathan, an officer for Unifi, a division of PriceWaterhouseCoopers, will host a special session on "Creating a Balance Between Work & Life." A panel will discuss "How Technology Has Transformed Tourism and Hospitality."

DeBartolo name remains

"Eddie D." DeBartolo, whose entire career was shot down because of involvement with convicted ex-Louisiana Gov. Edwin Edwards, won’t be involved, but the owners of the San Francisco 49ers will finally be getting their Louisiana casino.

Eddie D’s sister, Denise, and her husband, Dr. John York, received approval to install more than 1,700 slot machines at their Louisiana Downs racetrack. It is in the midst of an $86 million expansion into a racino, a combination racetrack and casino.

The younger DeBartolo paid a $1 million fine for his involvement with Edwards in seeking Louisiana’s 15th riverboat casino license (a license that has still not been granted). The NFL then forced him out of his operating position with the 49ers. He then sold his interest to his sister.

Mr. and Mrs. York, through a spokesman, said the casino expansion was the only way to keep the racetrack open since its revenues have declined sharply in recent years.

OTB battle heats up

New York Mayor Rudy Giuliani is getting ready to sell the New York City Off-Track Betting Corp. to the highest bidder, but Magna Entertainment Inc. (MEIC) and its partners are looking for a little inside help.

The group, recently incorporated in Delaware under the name GMR-NY, has agreed to pay $110,000 to lobbyist Patricia Lynch, a close adviser to Assembly Speaker Sheldon Silver, a Manhattan Democrat. They are also trying to make a deal to hire William Powers, a GOP powerhouse.

Partners in the group with Magna are Greenwood Racing of Pennsylvania (via England); and two individuals, William Mack and Robert Baker.

Considered leaders in the bidding process are the executives of the New York Racing Association, who have developed strong friendships in the Legislature. Also prominent is the partnership of Churchill Downs Inc. (CHDN) and TVG, a division of Gemstar-TV Guide.

Southern Gaming Summit

A diverse group of gaming leaders has been lined up to speak at the eighth Annual Southern Gaming Summit in Biloxi, Miss., May 9-10.

Among the gaming leaders scheduled to speak are: Terry Lanni, chairman and CEO of MGM MIRAGE Inc. (MGG); Glenn Schaeffer, president and CFO of Mandalay Resort Group (MBG); and Phil Satre, chairman and CEO of Harrah’s Entertainment Inc. (HET).

Joining them will be Mississippi Gov. Ronnie Musgrove, as well as two Native American representatives: Tribal Chief Phillip Martin of the Mississippi Band of Choctaw Indians and Tony Pico, former chairman of the Viejas Band of Kumeyaay Indians of Alpine, Calif.