Gaming thunder shakes upstate NY

Jun 15, 2004 6:28 AM

While the thunder of MGM Mirage’s offer and Mandalay Bay’s rejection and now subsequent acceptance in principle echoed over Las Vegas for the past 10 days, there were other booming thunderclaps shaking gaming 3,000 miles away.

In New York, Governor George Pataki and Cayuga Nation chief Tommy Two Guns came to an agreement after a long simmering battle over 64,000 acres of Cayuga ancestral lands in New York state. The land was set aside in a 1789 treaty between New York and the Cayugas, and last week Pataki acknowledged the legitimacy of the claim by agreeing to pay the Cayugas $250 million and seeking federal legislation that would provide the Indian nation with 10,000 acres within the claim territory.

But there was more to the agreement.

It also calls for a compact for the Cayugas to operate a gaming facility adjacent to Monticello Raceway, the once picturesque harness track in the Catskills that has fallen on hard times recently.

At the end of this month Monticello expects to open a racino with 1,800 VLTs, and Empire Resorts, which now owns the track, says it also hopes to have all necessary state and federal approvals and legislation in place by Sept. 30 for the Cayugas to move forward with the $500 million casino project.

A little geography is in order here.

Monticello once was the center of the thriving Catskill mountain resort area — the Borscht Belt — that catered to thousands of New York City families and others around the state. It is little more than 90 miles from the city, and it once was home not only to vacation cabins that dotted the mountains, but also luxury hotels that offered big name entertainment. The Concord was one of them, Kutshers Country Club another. Another huge Vegas-backed Indian casino is on the drawing board for Kutshers.

When these begin operating, the Borscht Belt will be revitalized, which has been a major objective of George Pataki for years. It will change the balance of power of Atlantic City, throwing much of it north of New York City and not south of it. "The Mountains," as they are known in New York, will come to life again, emerging from the economic doldrums and dreary and depressing depths to which they have sunk in recent years.

While all of this was going on in Albany, another serious threat to Atlantic City developed to the south, in Maryland.

There has been a fierce and frustrating political dogfight going on there for more than a year, between Governor Robert Ehrlich, and the powerful Speaker of the House Michael Busch. Ehrlich wants slots and Busch has been able to stop him from getting them. Busch gave some signs of relenting in recent weeks by suggesting a public referendum next November, but Ehrlich has rejected that idea, saying his election was the referendum on the issue since he supported slots when campaigning.

A possible breakthrough came last Saturday when the Cloverleaf Standardbred Horsemen’s Association, which owns Rosecroft Raceway through its Cloverleaf Enterprises, voted to sell the track to the family of Peter Angelos, majority owner of the Baltimore Orioles, for $13 million and assurances it would remain a harness track.

Angelos is a power force in Baltimore and the state capital in Annapolis, enough of a power that he may be able to end the stalemate that has paralyzed the state legislature for a year. Rosecroft sits just off the Capital Beltway, which circles Washington. It is a pretty little track that has operated for 55 years. It also is an ideal site for a racino, and the Angelos family has indicated it would build a major entertainment complex at the track if slots are approved.

Until now the legislature and the Maryland Racing Commission did not seem to care too much what happened to Rosecroft. Under the ownership of Peter Angelos’ family that is likely to change.

The sale is set, with a hoped-for closing by August 31. If VLTs follow or possibly precede that closing, more thunder will be heard in the gaming skies of the east.