Opponents vow lawsuit to stop N.Y. casinos

Jun 25, 2001 10:40 PM


An agreement between New York Gov. George Pataki and the Seneca Indian Nation to build two casinos in Buffalo and Niagara Falls, and possibly a third, is being challenged with threats of a lawsuit by a group once affiliated with Donald Trump.

The New York Institute for Law and Society says Pataki’s agreement violates the state Constitution, which bars slot machines in New York, according to a Reuters report. The group also says the agreement violates the 1988 U.S. Indian Gaming Regulatory Act.

The institute played a prominent role in winning a state Supreme Court ruling earlier this year stating that Pataki cannot negotiate federally mandated gaming compacts with Indian tribes without the Legislature’s approval. That ruling has left a proposed $500 million casino in the Catskills in limbo.

At one time, the group received as much as $1 million in funding from Trump, its chairman, Thomas Hunter, told Reuters.

Trump has long opposed casinos in New York in an effort to protect his Atlantic City casinos from competition. His prior support for the institute netted him a $250,000 fine last year for not disclosing contributions to the group.

The state Senate has already signed off on the Seneca proposal, agreeing with Pataki that the casinos would be an economic development tool for the depressed northwest region of the state, promoting jobs and investment similar to the two casinos operating in neighboring Niagara Falls, Ontario.

Pataki has also been amenable to tribal casinos as a way to settle outstanding Indian land claims against the state.

New York currently has one major Indian casino, Turning Stone, owned by the Oneida Nation, located near Syracuse.

One estimate has the Buffalo and Niagara Falls casinos generating $115 million a year for the state, of which 20 percent would go to local governments.

The deal calls for the tribe to take over the 153,000-square-foot Niagara Falls Convention Center for $1 a year. If the full Legislature approves it, a casino could open on the site as early as next spring, according to a report this week in The New York Times.

No site has been announced yet in Buffalo.

The third casino would be built on Seneca land in western New York.

The projects will also requires federal approval.

N.J. sues online sites

New Jersey is suing three Internet casinos, claiming they violated state law by taking bets from New Jersey residents.

Three casinos ”” 7sultans.com, Alohacasino.com and royalclubcasino.com ”” are named as defendants in the suit because they advertised in New Jersey, using billboards along the Atlantic City Expressway, according to an Associated Press report.

Investigators placed as many as 20 bets with the sites, the suit alleges. Three teenagers also were able to log on and wager, authorities said.

Officials with the sites could not be reached for comment, according to AP.

State attorneys, in the meantime, have asked a judge to let them serve the legal papers via e-mail because of difficulty locating officials for the sites.

Expansion in A.C.

Colony Capital announced it will add a 30-story art deco-style tower to its Resorts Atlantic City hotel, which it purchased two months ago.

The $125 million addition will replace the hotel’s old 170-room wing, and bring the total number of rooms to 970.

Colony Capital is also considering renovating the Steeplechase Pier with 200 hotel suites, ballroom, swimming pool and cluster of retail shops. The project would cost from $50-$100 million, though a decision on it won’t be reached until next year.

Mississippi’s May

Mississippi gaming win was up 7.2 percent in May to $237.6 million.

The increase was the strongest statewide in more than a year, according to the Mississippi Gaming Association, a trade group representing the state’s casino operators.

The Gulf Coast casinos paced the jump over April’s flat revenues, suggesting the state may be moving off a sluggish spring. The coast reported a 13 percent increase in year-over-year results.

The river counties had a 4 percent increase year over year.

Statewide win was up 8 percent over May 2000.

Observers remain cautious, however, as summer unfolds, as reports indicate June visitations have been slower than hoped for.

Hollywood boosts win

Louisiana’s casinos won $153.8 million in May, a 9.3 percent increase from $140.7 million won in May 2000. Part of the increase was attributed to the opening of the Hollywood Casino in Shreveport.

The state’s 14 riverboat casinos won $132.9 million, compared with $119.7 million in May 2000. The three riverboats in New Orleans won $24 million in May, compared with $22.1 million in May 2000, an increase of 9 percent.

Harrah’s New Orleans, the state’s only land-based casino, generated $20.9 million in gambling revenue in May, up 4.7 percent from April, but down 0.4 percent from May 2000.

In all, the state tax on all casinos in May was $31.3 million, up from $30.6 million in May 2000. These tax figures include Harrah’s New Orleans Casino, whose tax bill was cut in half by the state, from $8.5 million in May 2000 to $4.25 million last month.

Tribal economics

Arizona’s Indian casinos generated $40 million in state and local taxes last year and more than $28 million in federal and state payroll taxes, according to a University of Arizona study.

The results for 2000 also showed the casinos as one of the state’s largest employers, with 9,324 workers, comparable to the state’s large mining sector. Fifty-seven percent of those jobs were held by non-Indians. Jobs related to the casinos number 14,784, according to the study’s estimate.

Economic spin-offs were estimated at $468 million last year. The casinos spent $254 million on goods and services.

The data was collected from 13 gaming tribes.

K.C. bonanza

May was the second-richest month for Kansas City’s riverboat casinos, which won $48.7 million from gamblers.

According to a report in the Kansas City Star, the results approached March’s $54.3 million, the best month ever for the region.

The casinos are on a pace to win $576 million, beating last year’s record $535 million performance.

Leading the pack were Ameristar and Isle of Capri. Ameristar edged Harrah’s North Kansas City by .01 percent. The Argosy Riverside accounted for 16 percent of the market’s win. Isle, located near downtown Kansas City, also grabbed 16 percent of total revenues.

Ohio VLTs dead

A resolution calling for a statewide referendum on slots at racetracks died in committee in the Ohio Senate, making it unlikely the machines will appear in the Buckeye State anytime soon.

Ways and Means Chairman Louis Blessing, who sponsored the measure, pulled it before it got to a vote, realizing it faced an uphill battle. One amendment, by anti-gambling Sen. Jim Jordan, would have put the existence of the state lottery up for voter approval along with the machines.

Supporters said 1,500 video lottery terminals at the tracks would generate between $700 million and $800 million over two years.

Opponents said the VLTs were a shortcut to casinos, which have been rejected twice by Ohio voters.

Two no-Trump

Two would-be investors in the Trump Indiana riverboat casino were rebuffed in their attempt to sue owner Donald Trump for failing to include them as investors in the facility.

A U.S. Appeals Court panel sent the case back to District Court for a new trial, citing insufficient evidence of a binding contractual agreement.

William Mays and Louis Buddy Yosha said they had an enforceable agreement granting them 1 percent ownership in the casino, which is located on Lake Michigan in Gary. The two said they believed they would become minority partners based on an agreement between Trump and the city setting up terms for local minority groups to invest in the project.

Six other Gary investors have settled similar disagreements with Trump.