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|2003-4:||Casino Warriors - An Investigative Series .... by John McMahon|
- January 11, 2005 - Artvoice Interview with Gambling Expert John Kindt
- Senecas for Justice and Preservation - Press Release of January 8, 2005
- Buffalo News, August 19, 2004 - Firm Chosen to Study Seneca Niagara Casino's Fiscal Impact
- Michael Beebe, Buffalo News, August 19, 2004 - Seneca Souncil Overrules Court on Gaming Entities
- Greg Johnston, WRWB-TV, Rochester July 17, 2004 - Promoters Fail to Sell Casino in Rochester
- Peter Koch, Artvoice, July 8, 2004 - Bobby Jones and the SJP Take On the Casino Establishment
- Michail Beebe, Buffalo News, June 20, 2004 - Court's Denial of Cheektowaga Casino Doesn't Guarantee One in Buffalo
- Upstate Citizens for Equality, May 2, 2004 - Letter Urging Sen. Schumer to Halt Erie Seneca Casino & End Illegal Gambling
- WIVB-TV, April 23, 2004 - Schumer Urges Residents to Agree on Location for Casino
- Tom Precious, Buffalo News, April 10, 2004 - Tribal Council Set to OK Land Purchase Near Airport
- Tom Precious, Buffalo News, April 7, 2004 - Developer Aims to Stop Casino in Cheektowaga
- David Staba, Niagara Falls Reporter, March 9, 2004 - Promised Jobs Not Materializing in Niagara Falls
- Press Release on www.samhoyt.org, March 7, 2004 - Hoyt Praises Partnership's Stand Against Buffalo Casino
- Michael Beebe, The Buffalo News, February 22, 2004 - 3 Accused in More Cigarette Smuggling
- The Buffalo News, February 1, 2004 - Effort Grows to Get Seneca Casino Downtown
- The Buffalo News, January 21, 2004 - Pataki Wants Major Gambling Expansion
- The Buffalo News, January 6, 2004 - Bankruptcies Rise: Gambling a Big Factor
- The Buffalo News, January 17, 2003 - Byron Brown Now Pushing Downtown Casino
- The Buffalo News, November 16, 2003 - Giambra seeks notification on casino
- <-<-MORE RECENT NEWS ITEMS  EARLIER NEWS ITEMS->->
GAIN DRAIN: Greedy Gambling Would
Threaten Downtown Development, Expert Says
JOHN KINDT - Artvoice Interview, January 11, 2005
Summary by Lauren Newkirk Maynard
Dr.John Kindt, author of "The Business-Economic Impacts of Licensed Casino Gambling: Short-Term Gain but Long-Term Pain"
When asked in an interview this week how he thinks business development will fare in dowtown Buffalo if a casino should rear its blinking, buzzing head, Dr. John Warren Kindt's message was one of crashing doom, hungry invaders and an inevitable and icy wind blowing down Theatre Place. "If you have a casino, it's going to cannibalize your other businesses. It cannibalizes tourism." His scenario, despite sounding more like a scene from Alive! than a cool-headed appraisal of gambling's promised jackpot, spells out a warning: it will take more than Bass Pro and pockets of luxury residential lofts to withstand certain ill effects of the roulette wheel.
Kindt is a casino expert and a professor of business administration at the University of Ilinois. He was in Albany this past Monday to attend the first annual lobby day by Citizens Against Gambling in New York (CAGNY), a newly formed but rapidly growing organization of gambling opponents from across New York State. The group and Kindt were in Albany to support a moratorium on state-wide gambling expansion. Kindt's report, "The Business-Economic Impacts of Licensed Casino Gambling: Short-Term Gain but Long-Term Pain," was presented in a Congressional hearing before the House Committee on Small Business in 1994. In it, he outlines why casinos pose a greater threat than boon to local economies, and comes up with some startling revelations. For instance, he calculates that, for every $1 in taxes legalized gambling contributes to the local economy, $3 must be paid by taxpayers to cover infrastructure, regulatory, social welfare and criminal justice expenses. Buffalo residents would end up paying over double the cost of what a casino would put out-just to try and control its negative impacts. This impact, Kindt stresses, does not merely go away when state or local governments deem the activity "legal." (Plus, as CAGNY pointed out on Monday, casino gambling in New York State happens to be banned by its own constitution.) Kindt cites other revitalization projects, similar to the three waterfront plans mentioned in this section. "In Des Moines, Iowa, there was a multiinillion dollar project to create a riverwalk down the river in the capital of Iowa. Businesses came in, they were being attracted, they were committing to locating on this riverwalk area. And then, a casino interest came in and said, 'You know, we're just a business interest like anyone else. We'd like to locate here on the riverfront as w ell.' The investors for this riverfront property- all of them- said, 'You put a casino anywhere near us and we're taking all of our multimillions and we're leaving town.'
Kindt likens casino cities to "company towns," where the casino becomes the deep pocket and the city's lawmakers, the mouthpiece for gambling interests. The decision whether or not to invest in a casino may seem complex-a risky gamble that may sacrifice a city's social responsibility to one's constituents in order to collect badly-needed revenue for those same citizens-but to Kindt the issue is black and white. "You're either going to be a casino company town, or you're going to be a business-oriented, generating economy catering to consumers and tourists."
So, say a downtown core has already experienced some growth, like the downtown loft district in Buffalo, or already has existing (if not especially vibrant) cultural or business areas, such as the Theater District. How would a casino fit in?
"A casino would reverse all of the positive gains that you've made in the last few years," says Kindt. "And I've been coming to Buffalo for over 20 years. Now, this is a great city, it's making a good comeback, you've had some hard times. The worst thing you can do is bring in gambling and bring in a casino because that would simply cannibalize-and that's an academic term-all the businesses and the new development that you already have. People would be dropping their money into the casino instead of spendin g it on new apartments, cars, refrigerators, which generates a multiplier effect of a consumer economy. And one reason why you're having this resurgence is because Niagara Falls got the casino and you didn't."
Wait-the Falls generating business in BuffaIo? But Seneca-Niagara was supposed to be the massive $80 million-dollar steed bearing that shining knight, or "multiplier effect," to use Kindt's own words, responsible for creating the consumer economy Niagara Falls so desperately needs. Again, Kindt offers up his report findings.
"Businesses are not naive, they're not dumb. We did a study ten years ago, and it showed that when you bring in gambling, businesses know that. They don't want their employees to get hooked. They don't want to locate in high-crime areas. And they don't want to locate near casinos. And I predict that you're going to have a big resurgence in BuffaIo within the next couple of years. Businesses are going to come here, because-whether you realize it or not-you've sent a message that we don't want a casino."
For Kindt's complete Artvoice interview with Matthew Holota, plus other interviews on legalized gambling, visit the "Video Archive" section of Avtv online at www.artvoice.com
-Lauren newkirk maynard
PRESS RELEASE FROM SENECAS FOR JUSTICE AND PRESERVATION
January 08, 2005
Senecas for Justice and Preservation
Contact: Robert Jones, 716-532-4357 or 698-8126 Lloyd Jacobs, 716-945-4202
The Senecas for Justice and Preservation (SJP) hereby maintains its opposition to Class III Gambling being conducted by the Seneca Nation of Indians government. SJP also opposes the sale and distribution of liquor within Seneca territories at the current Seneca Nation Casino facilities.
We believe the Family to be the most fundamental and Sacred unit of any Society and hold the acts of our Tribal Council to deliberately engage in any conduct which hinders or in any way negatively affects any Seneca family to be contrary to Seneca custom and tradition and indisputably in violation of our Seneca Culture.
We warn those within Government at all levels (local, state, and Federal, including our own Seneca Government), that to disregard our Seneca customs and traditions will ultimately result in the disintegration of Seneca Families both immediate and extended.
Therefore, it is with all the love we possess as believers in our good Seneca traditions, which we maintain as eternal-truths, that we respectfully invite New York State and politicians at all levels to consider the enormous negative impact that Class III Las-Vegas style Gambling has on Seneca and non-Seneca families alike, and to immediately declare the Gaming-Compact entered into between the State of New York and the Seneca Nation of Indians to be Null and Void. That compact is indisputably in violation of the New York State Constitution and of the Seneca Nation Constitution/Charter that was granted by the NYS-Legislature to the Seneca Nation on April 11, 1849 [L-1849-P-530].
Senecas for Justice and Preservation (SJP)
FIRM CHOSEN TO STUDY SENECA NIAGARA CASINO'S FISCAL IMPACTBuffalo News, August 20, 2004
Charles Gargano has been a promoter of gambling expansion for many years: In 1993 he served on the board of Alpha Hospitality, which was attempting a casino venture with the St. Regis Mohawks.
Mr. Gargano was a top fundraiser for Pioneers
Alfonse D'Amato and Governor George Pataki, who appointed him Chairman of Empire State Development in 1994.
Gargano has been the subject of many criminal investigation probes. In 2001, N.Y. Times reporter Leslie Eaton revealed that while serving as state economic development czar, he was also on the boards of directors of five troubled companies, two of which were accused of bank fraud, tax evasion, and securities fraud.
Gargano's reputation, and his unstinting support of the gambling industry, are bound to cast doubt on the integrity of his motives in commissioning this study.
- John Bartley, Webmaster, CACGEC, 8/20/2004
NIAGARA FALLS - The chairman of Empire State Development announced Thursday the selection of a Rochester firm to study the economic impact of Seneca Niagara Casino on the city. Charles A. Gargano, the chairman, said a contract was awarded to CGR of Rochester, a firm with nearly 90 years of experience in providing economic analysis and impact assessments. USA Niagara will administer the contract on behalf of Empire State Development, he said.
The study will look at various benefits and costs of the casino to the city as well as visitor spending. It also will provide an assessment of projected casino revenue to support local programs such as tourism promotion, economic development and community revitalization and housing.
"It is critical to understand the impact of the casino on the city of Niagara Falls and this study will help by providing that information," said Gargano.
SENECA COUNCIL OVERRULES COURT ON GAMING ENTITIESMICHAEL BEEBE, Buffalo News, August 19, 2004
A tribal appellate court's ruling that gambling corporations established by the Seneca Nation of Indians are unconstitutional has been overruled by the Tribal Council, sitting in its dual role as the Seneca Nation's Supreme Appellate Court.
The Seneca Council, acting in its supreme court capacity, has overruled the Bench Rulings issued a few days ago by the Seneca Appeals Court. The Bench Rulings had held that the Seneca Gaming Corporations were unconstitutional. The Appeals Court had noted that its rulings were based on evidence presented at trial and were therefore not appealable. My understanding is that in overruling the Appeals Court, the Council met in executive session, not only without the presence of the plaintiff, but without their knowledge.
Up until now, I've refrained from commenting publicly on the internal political and judicial processes within the Seneca Nation, out of deference for Seneca sovereignty. But sovereignty not withstanding, the members of the Seneca Nation are still American citizens, and as such they are entitled to such basic rights as due process. We can only hope that Seneca citizens will not tolerate such a blatant disregard for fair judicial process. This is kangaroo court justice, and it deserves the harsh light of whatever publicity we can muster.
- Joel Rose, Co-Chair, CACGEC, 8/19/2004
The decision striking down last week's ruling had been expected. The council originally set up the corporations to run Seneca casinos in Niagara Falls and on the Allegany Reservation in Salamanca, as well as a third casino planned for Erie County.
A tribal spokeswoman said the nation would have no comment on the decision, which was reached Tuesday afternoon in a closed-door session.
Robert W. Jones, who filed the action as co-chairman of the dissident group Senecas for Justice and Preservation, called the dismissal of his suit illegal.
Jones said the bench decisions against the gambling corporations, issued by three judges of the Seneca Appeals Court, were not final and under Seneca law could not be appealed until they were. "They panicked and acted prematurely," Jones said of the Tribal Council.
Jones contends that operations at the Seneca Niagara Casino and Seneca Allegany Casino are illegal because the corporations that control them were, the Seneca Appeals Court ruled, independent of the Tribal Council.
But Seneca Gaming Corp., in a statement, said the Supreme Appellate Court, by reversing that decision, "reaffirmed that the Nation's Council had appropriately and validly established (Seneca Gaming) and its subsidiaries and that these entities possessed sovereign immunity from suit."
The gaming corporation also said that the Senecas' payment of $38 million to the state in casino profits in return for a slot machine franchise was no longer before the Seneca courts because of Tuesday's rulings. Jones' suit initially tried to block that payment.
[ See Artvoice article about Bobby Jones ]
Cyrus M. Schindler Jr., a past Seneca president, serves as chairman of the gaming corporation. Its president is G. Michael "Mickey" Brown, a non-Seneca hired by the Senecas to run the casinos.
Promoters Fail to Sell Casino in Rochester
Greg Johnston, WRWB-TV, Rochester
July 17, 2004
After plenty of debate, it appears a casino in downtown Rochester is not in the works after all.
Governor George Pataki's office released a statement to R NEWS Saturday saying there are no negotiations of the sort between New York State and the Seneca Cayuga Tribe of Oklahoma.
A spokesperson from Pataki's office told R News, "We would certainly discuss any relative issues related to the land claim case with local officials if in fact there were any issues to discuss, however there are no negotiations occurring for a casino in Rochester," said Lynn Rasic, Pataki spokesperson.
When asked if the talks ever occurred, Rasic said, "We don't discuss specifics of negotiations."
Rochester's mayor, who's been opposed to a downtown casino, weighed in on Governor Pataki's statement.
Mayor Bill Johnson called the timing "strange."
"If there were no negotiations, I don't know why the governor's office took so long to react to it because this has been front page news up here for about a month now," he said. "So I can't explain the timing, but I do appreciate the message."
County Executive Maggie Brooks says she's not sure what Pataki's statement means.
"Does it mean that Monroe County is out of contention completely?" Brooks asked. "Does it mean that a casino in downtown Rochester is not going to be a reality? I think we need to find out exactly what it means." Pataki's office declined to comment further on the issue.
Local developer Thomas Wilmot said he was working with the state and the Seneca Cayuga Tribe of Oklahoma to build a 500-million-dollar hotel and casino in downtown Rochester.
Wilmot was unavailable for comment for this story.
Bobby Jones And The Senecas for Justice And Preservation Take On the Casino Establishment
Peter Koch, "And Justice For All,"
ArtVoice, volume 3, number 28, July 8, 2004, pp. 10-13.
Ten years ago, Bobby Jones, a Seneca, and Seneca gas and tobacco retailer Ross John were friends. Ross John gave Jones a job at one of his gas stations. As Bobby soon learned, though, working for John meant more than just selling gas and cigarettes.
Jones began hearing stories about John's "associates"--Art Montour, Sr., Art "Sugar" Montour Jr, Paul Delaronde and John Kane--some of whom have serious criminal records, and who are reportedly involved with the militant Mohawk Warrior Society.
Then, in 1995, an incident that resulted in three deaths confirmed Jones' fears about John and the company he was keeping. At the time, the Nation was in the midst of a political standoff between the Seneca Partycontrolled Tribal Council and impeached President Dennis Bowen. According to Jones, Ross John and fellow gas and cigarette baron Barry Snyder, Sr., both Seneca Party members, paid four men to storm the William Seneca Administration Building on the Cattaraugus Reservation in an attempt to remove Bowen's party from the building. The two parties were split on the casino gambling issue--the Seneca Party in favor of, Bowen and his Coalition '94 vehemently opposed. When a gunfight erupted between the two parties, Bowen's supporters inside returned fire, killing three of the four hired men. One of those who lay dead when the smoke cleared was Myron Kettle, 62, shot and killed by his own son, Richard Kettle.
"It was after the shootings in '95 that I began to become suspicious of the way the Seneca Party businesspeople, and the Seneca Party as a political faction, operated," says Jones. After I saw what was going on, I decided I'd seen enough of the Seneca Party, I could no longer be a part of it." Since then, Jones has cut his ties to the Seneca Party and has done everything in his power to oppose its policies.
Opposing the Seneca Party, however, is no easy task. They've held political power steadily since the Party was formed in 1989 by Seneca business leaders, primarily because they have the resources to buy votes. The makeup of the party has changed very little; members include Barry Snyder, Sr., Cyrus Schindler, Ross John, Barry Snyder, Jr., Sandy Abrams, Adrian Stevens and many others who hold both the political and economic power. This means that people like Bobby must rely on the Seneca Nation democratic election process as their only course of relief from Seneca Party policies. However, the Seneca Party regularly buys votes when election time rolls around, making change nearly impossible.
Jones is not discouraged, though. In fact, he and other members of the Senecas for Justice and Preservation (SJP) brought the Seneca Niagara Falls Gaming Corporation (SNFGC), headed by G. Michael "Mickey" Brown, to tribal Peacemakers Court in late December. As a government entity, most of SNFGC's board members are from the Seneca Party. SJP was there to argue what they consider to be the roots of the gaming problem--the gaming compact signed (by NYS and SNI) in May of 2002 and the Seneca Gaming Corporation that it created.
This disagreement was spurred by SNFGC's illegal payment of $38 million in slot machine revenues to New York State. On January 8, 2004, Seneca Appeals Court judges ordered a Temporary Restraining Order, calling for SNFGC to hold the payment to the State. This was a response to Governor Pataki's attempt to collect taxes on cigarette and gasoline sales early this year. The Appeals Court found that if the State was going to break its treaties with the Senecas, the Nation could hold onto the $38 million, promised by the gaming compact, as a bargaining tool. Two days later, at a regular, publicly attended council session, Seneca President Rickey Armstrong announced that the money ($38 million) had already been wired to Albany.
SJP says that, based on the Seneca Nation Constitution (signed in 1848), the gaming compact is illegal and should be declared null and void. This is because the Nation didn't get the consent of three-fourths of the "mothers of the Nation (a term that refers to the matriarchal head of each of the eight Seneca clans)," as is required by very specific language in the Seneca Constitution.
That original case was thrown out when the judges decided that SJP's evidence wasn't verifiable--a decision that Jones calls "political." SJP appealed their case and appeared in tribal Appeals Court a month ago--June 7. If, this time around, the gaming compact were to be declared null and void, the ruling would, as Bobby says, "rock the entire Nation."
OLD VIEWS ON TODAY'S NEWS
SJP is a grassroots movement, co-founded by Bobby and Lloyd Jacobs, devoted to preservation of Seneca culture, history and traditions for the "seventh generation to come." This phrase comes from the Haudenosaunee (or Iroquois) Great Law of Peace and refers to a long-term style of governance where leaders are held accountable for those who come seven generations after them. It is a system that encourages sustainability and responsibility to the future, as well as to the present. The SJP was founded early last year and consists of only a few dozen members. Jones says this is because people are afraid. "People are intimidated by the Seneca Party--if you're associated with an anti-casino sentiment, they make life hell for you, they fire your friends and relatives from Nation jobs...it's pure intimidation. So some people can afford to support us vocally and visually, but most can't."
One of SJP's main concerns currently is halting the Nation's casino gambling operations--a lofty goal, indeed. The Nation has already established two very profitable casinos-- Seneca Niagara Casino in Niagara Falls and Seneca Allegany Casino in Salamanca--and are seeking to construct a third in Cheektowaga.
These casinos have dramatically inflated the Nation's--which is to say the Seneca Party's--political influence. As the casinos promise much-needed cash to the economically depressed cities of Niagara Falls and Salamanca, as well as to the state, those governments now have a vested interest in the success of the Seneca casinos.
Under the gaming compact signed between New York State and the Seneca Nation, the state currently receives 18 percent (a figure that will increase to 25 percent before the compact expires) of all slot machine revenues. That amounted to $38 million last year from Seneca Niagara Casino, alone. Niagara Falls is given a quarter of that $38 million and Salamanca is to get 15 percent of the state's cut from Seneca Allegany Casino.
Though the Nation's newly found wealth (which most of the Nation's members have not seen) has improved its standing in the modern world of political jockeying (they were third monetarily in Albany lobbying last year), Bobby Jones and the SJP see the focus on casinos as a dilution of their tribal traditions. "We try to show the people that this is not our way, not the Seneca way," says Lloyd Jacobs. "I can't see how anybody could feel proud to be prospering at the loss of somebody else. That's all gambling is--prospering on someone else's loss."
The ruling of this most recent Seneca court case could potentially alter the Seneca Nation's gaming practices, but at the least will result in a divide between members of the Nation.
The modern Seneca Nation government should look very familiar to most people; in fact, it bears a striking resemblance to the structure of the U.S. government. This, however, should come as no surprise when one learns that both were structured after the three branch democratic system of the Haudenosaunee League. The American system of democracy--by the people, for the people--was not only based on Greek or Roman systems of representative government, but also on the world's oldest surviving democracy, the Six Nation Confederacy of the Haudenosaunee. In a well-documented meeting at Albany in 1754, Benjamin Franklin and several others met with Haudenosaunee leaders to discuss the benefits of uniting the colonies into a confederacy under a centralized government.
The Constitution is largely based on a Haudenosaunee document called the Great Law of Peace, which guaranteed freedom of speech and religion, as well as the right of women to participate in government. It also allowed for separation of power and a system of checks and balances. The Senecas, although members of the Haudenosaunee, didn't have a representative form of government until 1848. It was then that, due to a lack of transparency over the payment of federal annuities (for lands taken during the 18th Century), the New Government Party emerged, drafted a Constitution and gained federal recognition, officially changing the Seneca government from the chiefs/clan mothers system to a representative democracy.
Today's Seneca government has executive, legislative and judicial branches. The executive branch consists of the President (Rickey L. Armstrong)--presidents are limited to two-year terms--Treasurer and Clerk. The President has a vote in the Tribal Council, chooses replacements for the Tribal Council and has veto power over the Council. The legislative branch consists of 16 Tribal Council members (eight from each reservation, Cattaraugus and Allegany) who create and vote on laws. The judicial branch includes two lower, or trial, courts (Peacemakers' and Surrogate) and a Court of Appeals (there's also a Supreme Appellate Court, where tribal councilors serve as judges).
IN THE RIGHT CORNER ...
When their court date arrived last month, members of SJP and SNFGC met at the Plummer Building on the Allegany Reservation. There, the two groups, appellants and respondents, presented their cases before three judges in Appeals Court. Each party was given 15 minutes to articulate its arguments, after which court was adjourned.
The court has up to 60 days to reach a decision on the case. Such an abbreviated court session may make this case seem minor, but given the level of the accusations, this is clearly a court decision that the Western New York community-- white or Native American--should pay attention to.
Quite simply, SJP does not accept SNFGC --a corporation created by the Seneca Gaming Corporation (SGC) (which was, in turn, created by the Nation-State gaming compact). With Mickey Brown, the slick Atlantic City lawyer, at its head, the SNFGC has been carrying on the Nation's business with little accountability and no transparency --even within the tribe itself. Brown was hired by the Nation because of his past success as president and CEO of the Pequot-run Foxwoods Casino in Mashantucket, CT (though he was being investigated when he left Foxwoods). Brown is also president of Seneca Territory Gaming Corporation (STGC), giving him control over the operations of the Seneca Allegany Casino in Salamanca.
For Bobby Jones, there are a number of problems with the gaming corporations. In fact, if he and SJP have it their way, those corporations will be dissolved, as they were created by an illegal compact. As is previously stated, it is in violation of the Seneca Constitution, where it is stated that "The power of making treaties (read compact) shall be vested in the council subject to approval of at least three-fourths of the legal voters and the consent of three-fourths of the mothers of the Nation" (Section V).
This, they say, never happened. It is evident that the members of SJP fall on the more traditional end of the scale. Many of them see casinos, and many of the social ills that come along with them, as a deviation from the Seneca value system. Alcohol is one of those deviations. The Seneca Niagara Casino became the first casino in the state to obtain its liquor license in 2002, and the STGC is currently applying for a liquor license for the casino in Salamanca. "Everyone knows Indians have a history of alcoholism," Jones says. "We have a huge problem on the reservations and the statistics show it. So why on earth would they go ahead and sell liquor at these casinos? Because they know there's tons of money in the selling of alcohol... they don't care about the people."
Statistics do show that the rate of alcoholism in the Seneca Nation far exceeds the national average--some estimates put the number at five times that average. When talking about the alcohol problem, Jones refers to the Code of Handsome Lake, a Seneca Prophet and religious reformer from the late-18th to early 19th Century. In the code, it says, "This rum will turn their minds to foolishness/and they will barter their country for baubles;/then will this secret poison/eat the life from their blood and crumble their bones."
Besides the religious code, there are two centuries of legal precedent that support the prohibition of alcohol sales on Indian lands, including federal Indian law established by several court cases and statutes.
As with the Pequots, however, it was found that compliance with state liquor law supersedes the federal law prohibiting liquor sales. All that is required by the state is that its gambling operations are overseen by the Racing and Wagering Board, which already applies to both casinos. Despite that, Jones would be quick to point out that according to Seneca legal precedent, the selling of beer to Indians by a political figure is grounds for impeachment. In 1866, a Seneca man named Silverheels was impeached for just that reason. That means that any members of the tribal government who also serve on the SNFGC or STGC (Rickey Armstrong, Cyrus Schindler, Adrian Stevens and Bergal Mitchell) could potentially be impeached for their role in the sale of beer to Indians at those casinos.
Another problem with the corporation that doesn't require indigenous blood to recognize is its lack of transparency. The point of the casinos was to improve the economic situation of the Seneca people. The people were promised per capita payments (similar to those they receive from the Nation's bingo hall) that would come directly from the casinos each month. However, so far nobody has received a dime from the Seneca Niagara Casino. Instead, all of the profits were "reinvested" in expansion and the building of the casino in Salamanca, a fact that nobody can verify.
Such verification is difficult because when the Nation set up the Gaming Corporation, it gave it a lot of breathing space, including, as part of the deal, sovereign immunity and Freedom of Information Act (FOIA) exemption. This means that members of the tribe have no access to the corporation's records. There are literally hundreds of millions of dollars flowing through each casino annually, and there is no way to find out exactly how much profit is being made and where it is going.
"We have no knowledge and information," Jones says, "because of their exemption from FOIA requests, as to how they're really providing services to the Seneca people through the class 3 gaming facility (casino)." The Nation didn't allow for any system of checks and balances.
The problem today is exacerbated because, with the creation of the Gaming Corporation, the Nation's cash cow is being completely overseen and regulated by several people who weren't even elected (rather, it is an appointed board). This creates accountability problems that wouldn't otherwise exist. The SNFGC isn't even accountable to the Tribal Council. Mickey Brown can hide the financial records from the Nation. For example, if the Seneca Niagara Casino makes $50 million in real profits next year, they could report $42 million in profits and each skim off a cool $1 million. Not a single tribe member (outside of the government) would know a thing.
On top of all this, the Nation, legally speaking, is not even in a position to make per capita payments of casino revenues. According to a letter from Affie Ellis, director of the U.S. Office of Congressional Affairs at the National Indian Gaming Commission, "to make per capita payments, a tribe must first have a revenue allocation plan approved by the Department of Interior. The Seneca Nation does not currently have a revenue allocation plan in place."
So, despite their promises of checks in the mail, the Nation hasn't even bothered taking the necessary steps to process any revenue. The transparency problem is similar to the one that led up to the drafting of the Seneca Constitution in 1848. In that case, chiefs were receiving federal annuity payments for lands lost in the 18th Century, which they would then distribute to the people. The chiefs would routinely take out a percentage of the money for government needs and charitable causes. Many people, however, suspected the chiefs of pocketing an unfair portion of the money, so there was a political revolution.
So what, then, does all of this add up to for the SJP's case? To begin with, they want the Nation's $38 million to be returned from New York State's coffers, and then have it dispersed to all 7300 members of the tribe. In the event that the State can't return the money all at once, they ask that the defendants (Mickey Brown, etc.) pay half of the money back. They also want the gaming compact to be declared void. Their final, and perhaps simplest, request is that all information regarding proposed or currently operating casinos be made available to the people--complete transparency.
IN THE LEFT CORNER ...
Curiously, Mickey Brown and the Corporation didn't address any of the issues that SJP made in court. Instead, they tried to find legal loopholes that would get the case dismissed.
Their first defense is that, as a government entity, they enjoy the same rights as the Seneca Nation, including sovereign immunity. They believe, then, that they are immune from legal action, except from the federal government. However, Jones & co. were able to find a tribal court case in 1956, Seneca Nation v. Kennedy, that guaranteed the tribal courts' rights to try cases between the Nation and members thereof.
SNFGC's second argument regards the proper perfection of the appeal. Because SJP may have been one day late in filing their brief, they could lose their case. It is, of course, telling that Mickey Brown and SNFGC focused on ways to get the case dismissed, rather than address any accusations that were leveled against them.
If SJP loses their appeal, the Fort Stanwix Treaty of 1784 could factor prominently into the future of the Seneca Nation and SJP. What matters most to many members of SJP is not found in the four articles establishing mutual good will between the Haudenosaunee and the U.S., but rather what can be found farther down the document. Close to the very end of that treaty --a federally recognized document (according to the U.S. Constitution, treaties are the "supreme law of the land")--a man named Kayenthoghke became the last signer. Along with the other Six Nations of the Haudenosaunee recognized by the treaty, Kayenthoghke is recognized as a member of the "Seneka Abeals." The name Seneca "Abeal" came from John Abeal, a NYS Indian Commissioner of Dutch descent. He married a Seneca woman in the 1700s and fathered several mixed-race children, one of whom was the famous Seneca warrior chief, Cornplanter. Kayenthoghke's 1784 signature asserts that John Abeal's descendants had established themselves as a federally recognized tribe. Over the next two and a quarter centuries, however, the Abeals mixed in with their closest cousins, the Seneca, and their name and ancestry was largely forgotten.
But today, Bobby Jones, along with perhaps a thousand more Senecas, can trace their ancestry back to John Abeal and his son Cornplanter. With genealogical proof in hand, Jones and company believe they can make a legitimate claim to the Seneca Abeal tribal status.
This is not a simple, overnight process, though. Since the Bureau of Indian Affairs (BIA) set up its Office of Federal Acknowledgment, at least 72 percent of applicants have been unsuccessful. The BIA has seven mandatory criteria that a potential tribe must establish. The Abeals should have no trouble with at least five of those, though two of the criteria will require a lot of work to prove. "We're still working on a lot of the lineage of the people," says Jacobs. "Trying to get ahold of the Cornplanter heirs and make sure they want to follow the direction we'd like to take."
If they are recognized and given tribal status, Bobby says, they will pursue several land claims in the area, including two square miles in the City of Buffalo. Horatio Jones, Bobby's "fourth great-grandfather," owned a one-square-mile plot of land that covers the Riverside area of Buffalo. Horatio was abducted by Senecas in 1777, but later married into the tribe, becoming an interpreter. His tract of land was illegally ceded to Secretary of Navy Samuel Suthert and a lawyer named John Rogers. Jones says there is another tract of land to which the Abeals could lay claim in that area. Jasper Parrish, an adopted Indian, owned one square mile in Black Rock, which was wrongfully taken. Both of these plots were taken without Congressional approval, violating the 1799 Intercourse Act. On top of these claims, there are also extensive lands in the Genesee Valley and Cornplanter's Pennsylvania lands (including part of Warren, PA and an area that was mostly flooded by the Kinzua Dam) to lay claim to. The Seneca Abeals would move onto new land and take the money from other land claims to get their infrastructure set up.
An alternative course for SJP is to run for government office within the Seneca Nation. Many positions are up for election this November, including President. Jones says that SJP's platform will include pursuing land claims, full disclosure of government proceedings, honesty in the government and a referendum to vote on closing the casinos.
No matter what the outcome of the court case, one thing that's clear is that the tribal government can no longer hide from its accusers. The Nation rushed to build its two casinos in less than three years, hoping that it would be safe from criticism once they were up and running. "I think they expected us to quit once they put up their casino," Jacobs says. "But that just gave us more ammunition because there is so much dirty dealing going on with [the casinos.]"
With this latest court action, SJP has established that it will leave no stone unturned in its dogged pursuit of transparency and justice in the Seneca Nation's governance.
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COURT'S DENIAL OF CHEEKTOWAGA CASINO DOESN'T GUARANTEE ONE IN BUFFALO, NOT BY A LONG SHOTMICHAEL BEEBE, Buffalo News, June 20, 2004
A judge's decision last week barring a Seneca Indian casino in Cheektowaga angered the Senecas and town officials, pleased those on both sides of the gambling dispute in Buffalo, and raised the possibility that no Seneca casino will be built in Erie County. And Mayor Anthony M. Masiello, who prevailed in the lawsuit along with downtown property owner Carl Paladino and others, said if the Senecas don't meet an August 2005 deadline to start casino construction, Buffalo could start negotiating with other Indian tribes.
"I would prefer to do it with the Senecas," he added. "If they're not interested, we'll find someone else who is."
Masiello's comments came after Seneca President Rickey L. Armstrong Sr. suggested the Senecas might build no Erie County casino if forced to build in Buffalo. "He can do whatever he wants," tribal council member Michael John said of Masiello, "but the state will never allow that, nor will the (U.S.) Department of the Interior."
An Interior spokesman did not return calls to comment, but only the Tonawanda Band of Senecas and the Tuscarora Nation are mentioned as possible casino operators in the Seneca compact with the state. Both are traditional tribes opposed to gambling.
Gov. George E. Pataki, John said, would never allow another tribe to open a casino in Buffalo because of an exclusive agreement over slot machines and the slot revenue the Senecas send the state from their casinos in Niagara Falls and Salamanca.
"Governor Pataki is not going to give up his two cash cows to give Masiello what he wants," John said.
Indeed, a lot of money is at stake for the state and the community that hosts an Indian casino. Last year, the state got $39 million as its share of the slot machine profits with the Senecas, and Niagara Falls received $9.5 million.
Pataki said last week, following the court's ruling, that he still favors Buffalo as the site of the Erie County casino.
Asked if the agreement requires the casino to be in Buffalo, Pataki responded: "I don't know that the law requires it to be, but I haven't seen the judge's decision. One of the goals is to revitalize areas like downtown Niagara Falls, like downtown Buffalo and like the Catskills."
The casino ruling Wednesday came from Justice Joseph P. Makowski in a State Supreme Court suit brought by Masiello and the others after the Senecas chose Cheektowaga instead of the city.
They sued New York State, the Town of Cheektowaga and Uniland Partnership, which is selling a 57-acre site in Cheektowaga to the Senecas and helping in the development.
The Senecas themselves are not named in the suit. Makowski agreed with Paladino's lawyer, Michael B. Powers, that the case involved state constitutional questions that did not directly involve the Senecas.
Makowski ruled that Pataki went beyond the mandate of the State Legislature by negotiating a Seneca casino agreement, or compact, that allowed the Senecas to choose Cheektowaga over Buffalo for their third casino.
The compact came from a memorandum of understanding approved by the State Legislature that called for Seneca casinos in Niagara Falls, Buffalo and a third on the Seneca reservation. If the Senecas could not agree on a Buffalo site, the memorandum said, they could propose another.
That new proposal, the judge ruled under the memorandum of agreement, would have to be agreed to by the State Legislature. He ruled that part of the compact unconstitutional.
Lawyers for the state, the town and the developer are expected to appeal to the Appellate Division, and either side would then likely take that decision to the state's highest court, the Court of Appeals.
Victory called "hollow'
Armstrong, who called the court ruling a "hollow victory" for Buffalo, suggested the Senecas might build no Erie County casino if only given the choice of Buffalo.
"I think that's just emotion," Paladino said late last week. "Hopefully, logic, good judgment and doing the right thing for the Senecas and Western New York will all come together. The mayor has extended his hand to meet and talk with him, and our hope is that will happen and they'll keep the promise of a stand-alone casino in downtown."
Cheektowaga Town Attorney Michael Stachowski doesn't see it coming to that.
"I don't see this decision standing," said Stachowski, who represented the town in the lawsuit.
He also wondered about the practical effect of trying to force the Senecas, a sovereign nation, to go to Buffalo after they decided against the city.
Cheektowaga Supervisor Dennis H. Gabryszak had similar concerns. "How do you try to make someone go someplace they don't want to go?" he asked. "The Senecas made their decision. They want to go to Cheektowaga. We want them in our town."
Gabryszak said he called Armstrong after the court decision to tell him the town would fight to keep the Seneca casino.
"He gave me every indication, not once, but twice," the town supervisor said. "They've made their decision. They want to locate in Cheektowaga."
Masiello argues that Buffalo was always a part of the Seneca plan for three casinos and said there would be no casinos in Niagara Falls or in Salamanca today if not for this plan that he lobbied the state to approve.
"This gaming opportunity was not just for the Senecas," Masiello said, "it was to benefit the City of Buffalo with new jobs and new revenues, the City of Niagara Falls with new jobs and new revenues, and the Senecas with new jobs and new revenues."
Mayor to renew efforts
Masiello said he would also call Armstrong and renew his efforts to have the Senecas build a stand-alone casino downtown that would benefit existing hotels, restaurants and other businesses.
Masiello said the Seneca vision changed when President Cyrus M. Schindler Jr. left office and Armstrong took over.
"I believe the new leadership wanted more land," the mayor said. "They wanted hundreds of acres of land to build their own casino, convention center, their own entertainment venues and their own hotels. None of them pay any taxes. All of them generate revenue that goes directly to the Senecas."
Gabryszak said he doesn't buy that argument, adding that the Seneca casino, even with developments like those mentioned by Masiello, would spur further development in Cheektowaga and bring needed jobs.
Casino opponents were also heartened by Makowski's decision but not for the same reasons as Masiello.
"I guess my reaction is that anything that throws a monkey wrench into this runaway train has to be considered a good thing," said Joel Rose, co-chairman of Citizens Against Casino Gambling in Erie County.
"It may well be, if the initial reaction expressed by Rickey Armstrong is the considered judgment of the Senecas, then the conclusion they'll reach is exactly what we want, no casino in Erie County," Rose said.
And lurking in the background is another expected court ruling, this one involving the constitutionality of Indian gambling in New York State.
Attorney Neil Murray has been waiting six months for the Appellate Division in Albany to rule on a case that he said would end all commercial gambling by the Senecas and other tribes in New York unless the State Constitution is changed.
"We came in at the outset, before those (casinos) were built," Murray said, "and we put people on notice saying, you do this, you do so at your peril."
LETTER TO SCHUMER FROM UPSTATE CITIZENS FOR EQUALITY
May 2, 2004
Hon. Charles E. Schumer
313 Hart Senate Building
Washington, DC 20510
Dear Senator Schumer:
I am writing on behalf of our approximately 8,000 members in Central and Western New York regarding the Seneca Nation of Indians’ plans to locate a Casino in Cheektowaga. We seek your assistance and support to halt or delay the opening of this facility and to end illegal Class III gaming currently being conducted in New York.
As you are by now aware, the Seneca Nation of Indians has announced its plans to build a Casino in Cheektowaga. This Casino is purportedly authorized by Chapter 383 of the Laws of 2003. There is currently a challenge to this law on state constitutional grounds in the matter of Dalton v. Pataki. This case is currently pending before the New York Supreme Court, Appellate Division, Third Department and a decision is anticipated any day now. It is this very court that stated "Under the circumstances, we conclude that the commercialized Las Vegas style gambling authorized by the compact is the antithesis of the highly restricted and "rigidly regulated" (NY Const, art 1, § 9 ) forms of gambling permitted by the NY Constitution and statutory law and New York's established public policy disfavoring gambling (see, Ramesar v State of New York, 224 AD2d 757, 759, lv denied 88 NY2d 811; accord, Matter of New York Racing Assn. v Hoblock, 270 AD2d 31, 33-34)" in Saratoga County Chamber of Commerce Inc. v. Pataki, 293 A.D.2d 20, 740 N.Y.S.2d 733 (05/02/2002). Furthermore, in your press release dated June 23, 2003 you stated “Before any consideration is given, we need to make sure that the community is on board, and that there's a real sense of how a casino would work and why it would be good for the area. When it comes to drastic redevelopment decisions like this, the federal government should be taking its cues from the real experts and that's the local residents and leaders.” You also stated “This is not a decision that should be rushed into” As you can see we are rushing into this decision by not waiting until it is determined one way or another if New York State has any authority to enter into a valid tribal-state compact absent a state constitutional amendment. Also the community in Buffalo and Erie County is not on-board with this decision. In a recent poll conducted by WBFO on its website (http://www.wbfo.org/) as of this writing there were 563 votes of which 74% were against a casino anywhere in Erie County which includes Cheektowaga and Buffalo. A poll on SpeakUpWNY (http://www.speakupwny.com) a total of 185 out of 302 or 61.26% people voted for “No casino in Erie County.” Furthermore a citizens group, Citizens Against Casino Gambling in Erie County, (CACGEC website: http://www.nocasinoerie.org/) has an online petition that 684 people have electronically signed opposing any casino in Erie County. Rushing into this at this stage will only create havoc both economically and politically if the courts ultimately decide that Chapter 383 of the Laws of 2003 is unconstitutional. These Casinos will be in the same position as Turning Stone and the Akwesasne Mohawk Casino are in, conducting illegal Class III gambling in violation of state and federal law.
As mentioned above in the wake of the decision by the New York Court of Appeals in Saratoga County Chamber of Commerce v. Pataki and the U.S. Supreme Court’s refusal to review that decision the gaming compact that the Akwesasne Mohawk Casino (AMC) was operating under has been declared illegal and void. Therefore the Class III gaming being conducted at that location is illegal under state and federal laws. The compact that the Turning Stone Casino is currently operating under was ratified only by the governor in the same manner as the AMC compact and is therefore illegal and void. A court decision to this effect is anticipated at the next hearing in the Matter of Peterman v. Pataki currently pending in the New York Supreme Court, Oneida County before Justice McCarthy. Recently, Mr. Suddaby, the United States Attorney for the Northern District of New York, was quoted as saying “We have been monitoring the situation," and "It is not our intention to take any action, provided things are moving forward and there is some resolution.” As part of the Executive Branch he is charged with the enforcement of all laws. I am not familiar with any law or doctrine that declares an otherwise illegal act, legal, pending the vote of a bill in the respective legislative body. Particularly, when it is very questionable whether or not that legislative body has the constitutional authority to enact such a bill. I have written numerous letters to Mr. Suddaby and the Commissioner of the National Indian Gaming Commission to no avail. This illegal gambling is still occurring in blatant contravention of state and federal law.
For the above reasons we ask that you support, assist and initiate action in the federal government to halt or delay the opening of the Seneca Casino in Erie County and to compel the enforcement of federal laws and end the Class III gaming being conducted at the Turning Stone Casino and the Akwesasne Mohawk Casino.
Daniel T. Warren
Niagara Frontier Chapter of Upstate Citizens for Equality
SENATOR SCHUMER URGES LOCAL RESIDENTS TO CHOOSE LOCATIONPublished April 23, 2004 on WIVB-TV 4
Senator Charles Schumer says the ongoing debate over a Buffalo or Cheektowaga location may convince the Bureau of Indian Affairs to halt the project all together.
Sen. Charles Schumer said "the Bureau of Indian Affairs here in Washington, which has to approve these Casino, when they see division and half the people going down there saying, 'don't do it unless it's in Cheektowaga, and half the people gop [sic] down and say don't do it unless it's in Buffalo, they're likely to turn it down. So until the Community is united and gets its act together theres [sic] probably going to be no casino."
HOYT PRAISES PARTNERSHIP'S STAND AGAINST BUFFALO CASINOPublished Tuesday, March 2, 2004 on www.samhoyt.org
Assemblymember Sam Hoyt (D-Buffalo, Grand Island), the State Assembly's leading gambling opponent, today praised the Buffalo Niagara Partnership for issuing a statement against establishing a casino in Buffalo.
Hoyt said, "I have long opposed a Buffalo casino for many reasons but especially because it would be bad for Buffalo's economy. This is no surprise, Governor Pataki issued a report in 1996 demonstrating how establishing a casino would actually result in a net loss of jobs for the region. Now the business experts, the Buffalo Niagara Partnership, have weighed in and confirmed that a Buffalo casino will be bad for Buffalo's economy."
The Partnership cited economic reasons for opposing a Buffalo casino, including, "The Seneca casino, as proposed, could lead to disinvestment downtown." The business group added that most of a Buffalo casino's business would come from locals, not tourists, "The Seneca casino, as proposed, will not create a tourism destination, and thus will fail to bring 'out-of-town dollars' to Buffalo." Hoyt added, "This is how a casino can actually result in a net loss of jobs for the region. Local residents will spen d their money at the casino instead of on Bisons and Sabres games, local restaurants, concerts and clubs and other established businesses. Some will even gamble away money that they should be spending on food, clothing and housing."
The Partnership further explained that "The Seneca casino, as proposed, is incompatible with downtown Buffalo's urban planning/design." Hoyt concurred, stressing that heritage tourism holds a key to attracting tourists to Buffalo for reasons that other cities can't duplicate. "As it stands now, Southern Ontario, Detroit, Niagara Falls, Central New York, Atlantic City, Connecticut and other nearby locations offer tourists gambling options other than Buffalo. But they don't offer buildings like City Hall, the Guarantee Building, the Elliott Square Building, the original terminus of the Erie Canal and the type of architecture that, if properly promoted, could bring in tourists from across the world. The Partnership is correct to point out that a casino would stick out like a sore thumb amongst these and other architectural masterpieces."
The Partnership added that it had originally supported the idea of a casino generating economic development dollars for an economic development fund for the region, but "State officials have all but rejected such a plan. If Seneca casinos and their revenues are not going to be a means to fostering new economic development, we must now question the fundamental value of the overall compact." Hoyt warned that the establishment of video lottery terminals at the Buffalo raceway later this year could pave the w ay for the Senecas to avoid sharing any revenue with the State or local governments. Hoyt said, "The compact only requires the Senecas to pay the state a percentage of profits from slot machines and video lottery terminals, but only as long as they have an exclusive franchise on those devices. If they are half as good business people come May when VLTs open at Buffalo Raceway, as they have been all along, I expect a Buffalo casino to open with VLTs. If so, the Senecas can avoid any revenue sharing at all ."
Governor Pataki negotiated a compact with the Seneca Nation of Indians in 2001 allowing the Senecas to establish up to three casinos in Western New York.. Although the State Legislature never approved the compact, Hoyt opposed legislation allowing the Governor to enter into the compact. The terms of the compact give the Senecas the upper hand in selecting locations. Once chosen, the locations become sovereign Seneca territory, off state and local tax laws, and exempt from other laws such as New York's smoking ban.
TRIBAL COUNCIL SET TO OK LAND PURCHASE NEAR AIRPORTTOM PRECIOUS, Buffalo News, April 10, 2004
ALBANY - The ruling Tribal Council of the Seneca Nation is expected today to approve buying 57 acres in Cheektowaga for a 185,000-square-foot casino that officials say could be open as early as New Year's Eve. The purchase should end speculation that the Senecas may still have an eye on Buffalo as a site for a third casino, tribal leaders said late Friday evening.
"Cheektowaga has welcomed us," Seneca President Rickey L. Armstrong Sr. said in a telephone interview Friday.
Armstrong would not disclose terms of the land purchase, saying he first wants to brief the Tribal Council at a meeting this morning on the Cattaraugus Reservation. The council vote is expected to be completed by noon.
The new casino, which would be adjacent to Buffalo Niagara International Airport, will be far less ambitious than the destination-resort casino operation the Senecas have in the works for their flagship gambling venture, Seneca Niagara Casino on Third Street in Niagara Falls. The Cheektowaga casino will, at first, feature about 1,800 slot machines, a couple of restaurants and entertainment space, Armstrong said.
Armstrong stressed that the property will not include smoke shops, gas stations or hotels. Some non-Native American business leaders worried they would have competition from tax-free outlets for both gas and tobacco products.
"Why would we want a smoke shop or gas station when we'd have a casino generating millions?" he said.
August purchase date
Like the Niagara Falls casino, the Cheektowaga venture would need approval by the U.S. Department of the Interior. Seneca officials hope to complete the purchase by August. The Interior review process takes 60 days, and Seneca officials are confident the federal agency will back the plan.
The Senecas would purchase most of the Airborne Business Park, owned by Uniland Development Corp. of Buffalo, which is directly across Holtz Drive from the airport on Genesee Street.
Cheektowaga Supervisor Dennis T. Gabryszak said Friday night that he had not heard of the impending land deal. "But if that indeed is what's happening (Saturday), I'm very excited about it," he said.
With threats of lawsuits and some powerful political interests still pressing for a Buffalo casino, Gabryszak said he isn't celebrating just yet. "Until it's a done deal, we're not taking anything for granted," he said.
Seneca officials dismissed threats of a lawsuit by Buffalo developer Carl Paladino, who says the Senecas, under an original agreement with the state, promised to locate a casino in Buffalo. Paladino, a major downtown landowner, would possibly benefit financially from a Buffalo casino.
Buffalo out as casino site
But Armstrong and other Seneca sources said the tribe's action should make clear, once and for all, that a Buffalo casino is not going to happen. Though a number of politicians, such as Erie County Executive Joel A. Giambra, sought to block some of the Seneca development efforts downtown, others, from Buffalo Mayor Anthony M. Masiello to U.S. Rep. Thomas Reynolds, R-Clarence, had become major players behind the scenes, pressing for the Senecas to go downtown.
Masiello could not be reached to comment late Friday.
But Seneca leaders have said they couldn't get clear signals from various sides about a Buffalo location.
Armstrong said the tribe is "disappointed that after all the talks and discussions and dialogue between the parties, nothing seemed to come to fruition, and some still insisted that we come" to Buffalo.
"But we're making the best economic choice for our members," he said Friday night of the Cheektowaga location. He said much of the site is already prepared for development, and its location near the Thruway and airport will boost patronage.
Town's welcome aided decision
Seneca leaders have said the reception from Cheektowaga town officials helped push the airport site.
"Our welcome was of the same type as Niagara Falls. They have been cooperative in everything and receptive to our ideas. I think they see the overall benefits of a casino in their area," Armstrong said.
The town, though, would lose property tax revenues with the Senecas taking over the site that is now owned by Uniland, a company controlled by developer Carl Montante. Gabryszak said Friday he did not know precisely how much in property taxes Uniland pays. But he said it would be nowhere near what the town could stand to gain from its share of the casino's revenues.
The state deal with the Senecas calls for 25 percent of slot machine proceeds to be shared with the state. The state then gives 25 percent to the host community, which would likely mean Cheektowaga and Erie County.
Niagara Falls recently got about $10 million for its 2003 share of the casino revenues from that city's casino. Anywhere near that amount for Cheektowaga would be a major boon to the town's budget, which is now about $60 million.
The State Legislature and Gov. George E. Pataki would have final say over how the local revenues are shared and what they could be spent on. Sources say Pataki has talked about trying to steer some of the money from a Cheektowaga casino to Buffalo. Pataki, when he cut the casino deal several years ago with the Senecas, had vowed that the Erie County casino would be located in Buffalo.
Gabryszak said the casino will eventually boost development all around the airport site. "I think the spin-off development could be significant," he said. "It's not something that will happen overnight, but the potential is truly there for a lot of development opportunities."
Plans for casino already under way
Armstrong said it would be an ambitious schedule to get the casino opened by New Year's Day, but plans are already well under way. The initial 1,800 slot machines are about half of the 3,000 machines at Seneca Niagara Casino. But Armstrong said the Cheektowaga site would grow as its business expanded. A source close to the Senecas' negotiations for the Cheektowaga acreage said Friday that the land is being transferred first from Uniland to the Seneca Erie Gaming Corp., which is owned by the tribe, and then
The Cheektowaga site would be the third and final casino owned by the Senecas in Western New York. The tribe is getting ready to open a casino on reservation land in Salamanca.
The tribe is also looking at casino development opportunities in the Catskills. The casinos were permitted under a 2001 law allowing up to six Indian casinos in the state, slot-like devices at racetracks and expansion of the state lottery. A lawsuit against the gambling expansion, brought by legislative, religious and business interests, is still pending in a state appellate court in Albany.
"I'm very excited. I'm looking forward to our third casino being operational very soon," Armstrong said.
DEVELOPER AIMS TO STOP CASINO IN CHEEKTOWAGATOM PRECIOUS, Buffalo News, April 7, 2004
ALBANY - A downtown Buffalo business leader has started the legal process to block the Seneca Nation's attempt to put a casino in Cheektowaga, a move that threatens to at least stall the casino development for months or longer. Carl Paladino, a major developer, said he and other business owners have retained the Phillips Lytle law firm to urge Gov. George E. Pataki and U.S. Interior Secretary Gale Norton to halt the Seneca plan to locate its third casino in Western New York at a spot near Buffalo Niagara International Airport.
"Buffalo real estate developer Carl Paladino is throwing a huge hissy-fit and threatening harassing lawsuits because the Senecas decided to put their second Erie County casino in Cheektowaga rather than downtown Buffalo, where Paladino, because of his huge clout with the mayor, stood to make a lot of money on the deal."
The Buffalo Report, 4/10
If that lobbying effort fails, a lawsuit will be filed to stop the Cheektowaga casino, Paladino vowed. The lawsuit would be based on the original 2001 "memorandum of understanding" between the tribe and the state, in which Buffalo was specifically cited as the location of one of three Western New York casinos the tribe could open, Paladino said.
Cheektowaga officials, meanwhile, were warned Tuesday by a Phillips Lytle lawyer to stop courting the Senecas. Town Supervisor Dennis H. Gabryszak said he was ignoring the letter's demand.
The letter campaign, serving as a legal shot across the bow, is just the latest chapter in the smoldering casino wars between Buffalo and Cheektowaga over a project that promises hundreds of jobs and millions of dollars a year in revenues to the victor.
Paladino, who wouldn't identify the other business leaders joining his effort, accused some Seneca officials of "smearing the integrity and character" of its tribe's members because "they're not keeping their promise" to locate a casino in Buffalo.
"The logical thing is to come back here and negotiate," Paladino said of the Senecas.
Backers of a Buffalo casino say the legal maneuvering could open the door for the Senecas to reconsider Buffalo, something tribal leaders and their lawyers have said they will not do. They recently met with state officials in Albany to discourage any further talk of a Buffalo casino.
Masiello is understanding
The legal threat was met with considerable understanding on Tuesday from Buffalo Mayor Anthony M. Masiello, a downtown casino proponent.
"It may happen legally. It may happen through negotiations. I prefer through negotiations," the mayor said of the push for a Buffalo casino.
Phillips Lytle, the influential Buffalo law firm, wrote nine-page letters to Pataki and Norton calling on them to honor the 2001 memorandum of understanding between the tribe and the state in which three possible casino sites were identified as Niagara Falls, somewhere on one of its two reservations and Buffalo.
"I hope this is the first step to avoid a lawsuit," said Michael Powers, a partner at the firm. But he cautioned that if the Senecas don't reconsider the city, his client is "prepared to do whatever is necessary to keep this opportunity from slipping away from Buffalo."
Lawsuit could force delay
No matter the eventual outcome of such a court case, a lawsuit could force a significant delay in the tribe's push to complete its triad of casinos.
A Pataki spokesman declined to say if the governor thinks the Senecas' interpretation of the casino deal is correct or whether he cares if the casino opens in Buffalo or Cheektowaga.
"As the governor has said, he would like to see a consensus reached among all the involved parties regarding plans for a casino in the region," said Pataki spokesman Todd Alhart.
Norton's office did not return calls for comment.
Seneca officials insisted they can look anywhere they want in Erie County for a casino site, and gave no indication they were going to give in to Paladino's legal threats. Seneca President Rickey Armstrong said the tribe is "entitled to look outside the city limits" under the terms of the casino compact with the state.
"It's unfortunate that there are still misconceptions out there, even after this legally binding document was signed by the Nation and the State of New York," Armstrong said in a written statement.
Town won't desist
Philips Lytle on Tuesday also asked Cheektowaga officials to stop efforts to locate the casino in their town, arguing that state environmental reviews are not being adequately conducted. But Gabryszak said the town is not doing any formal work that would activate the environmental review process because there has been no transaction between the tribe for the parcel of land it is considering near the airport.
"The town isn't involved in negotiations. That's between the Seneca Nation and whatever property owner may be involved," he said. Gabryszak said the town, though, will not stop encouraging the Senecas to come to Cheektowaga, or stop answering any questions tribe officials may have about their plan.
In the memorandum of understanding signed in June 2001 by then-Seneca President Cyrus Schindler and Pataki, the deal calls for a casino "in Erie County in the City of Buffalo."
A footnote does say the Senecas can "propose" another site outside Buffalo if a city site isn't available, but there is no procedure noted for how that would work. The State Legislature then authorized Pataki to negotiate a final compact for a casino deal with the Senecas consistent with the memorandum.
Senecas see wiggle room
The Senecas say the compact gives them geographic wiggle room, Senecas say. The April 12, 2002, document states that the tribe will pick a Buffalo site, or anywhere else in Erie County "as may be determined by the Nation in the event a site in the city of Buffalo is rejected by the Nation for any reason."
Tribal leaders initially zeroed in on Buffalo for their third and final Western New York casino, but fled to the suburbs when they encountered a rash of opposition from some business and political interests.
News staff reporter Harold McNeil contributed to this report.
PROMISED JOBS NOT MATERIALIZING IN NIAGARA FALLSDAVID STABA, Niagara Falls Reporter, March 9, 2004
Ed. Note: On March 12th, Mayor Masiello said that a downtown Casino would bring 2500 "Casino-related" jobs to Buffalo. We're not sure what he means by "Casino-related" -- Maybe he's including addiction counselors and bankruptcy lawyers. The story that follows reports that no more than 200 Niagara Falls residents are working full-time in the casino, and the vacancy-rate in N.F. hotels is up.
CITYCIDE: FIGURES SHOW EXECS GET GOLD MINE WHILE CASINO WORKERS GET SHAFTED
By David Staba
It's amazing what comes under the door at the offices of the Niagara Falls Reporter.
Closely guarded financial figures from the Seneca Niagara Casino's first year of operation and revenue projections covering the second, for instance.
Officials of the Seneca Gaming Corp., following the lead of CEO Mickey Brown, have repeatedly refused to disclose any numbers to date, other than the $38 million paid to New York State under the terms of the casino compact. The state's share, from which comes the $9.5 million allocated to Niagara Falls in January, is derived strictly from slot-machine profits. That means every penny spent on table games, as well as food, beverage and souvenirs, goes to the corporation and remains secret.
You could argue that it's an issue of sovereignty, and that the Seneca Gaming Corp. shouldn't have to tell non-Native Americans anything.
Except that Brown and Company are keeping the size of the casino's profits secret from members of the Seneca Nation, as well.
Or at least they're trying to.
The numbers provided to the Reporter, along with an unsigned cover letter printed on Seneca Gaming Corp. letterhead, while by no means comprehensive, do tell many stories:
- In December 2003, the last month for which figures were provided and the capper to Seneca Niagara's first full year of operation, the casino brought in $22,276,773, while showing a profit of $4,644,216 -- $3,327,463 more than budgeted. The surplus came courtesy of the slots, which swallowed $18,283,697 -- $3,197,652 above the budgeted amount. In other words, 82 percent of the casino's gross revenue and almost 96 percent of its excess profits emanated from its slot machines.
- At the end of 2003, the casino's total long-term debt was $83,076,071. Of that amount, $57,300,000 was listed as long-term debt and $13,424,667 as long-term notes payable. The current portion of long-term debt -- what has to paid by Jan. 1, 2005 -- came to $12,351,404.
- The biggest current liability, or short-term debt, was $39,017,277. Of that total, $38 million was paid in January to New York State, with $9.5 million of that trickling down to the City of Niagara Falls.
- The next largest payable line was $10,487,377 in construction liabilities. That went up $5,296,315 during December, while construction on the first phase of the mammoth parking ramp at the corner of Niagara and Fourth streets was in full swing.
- While a number of casino employees have told the Reporter that officials respond to requests for an increase in wages that start at $4.40 an hour, plus tips, by telling them that "we're just getting by," the balance sheet tells a different story. At the end of December, the casino had $62,815,274 cash on hand -- either in the casino itself, in banks or in short-term investments.
- Seneca Gaming Corp. officials budgeted a total of $4,688,896 for labor. Little more than one-quarter of that total -- $1,246,142 -- was slated for people manning and supervising the table games, who make up at least half of the total workforce. Most of the other non-executive workers -- food and beverage workers, slot attendants and the like -- work at the below-minimum-wage-plus-tips level.
"This is obscene," said a financial analyst who broke down the figures for Citycide and estimated at least half of the "labor" budget went to casino executives. "What's going to the actual workers, compared to the total revenue, is pretty disgusting."
- Over the 12-month period beginning last October, the casino expects to comp more than $3 million to patrons -- $1,982,872 in food (that's $5,417 per day), $364,578 in beverages, $990,844 in retail items such as souvenirs and $36,837 in entertainment.
- The same forecast anticipates the equivalent of 621 to 660 full-time employees working in table games at any given time. If that department makes up half the total workforce -- a conservative estimate, according to a number of employees and casino-industry insiders -- that's a maximum of 1,300 full-time slots. Of course, when casino and government officials claim the casino has created 2,000 jobs or more, they don't say "full-time jobs." By minimizing the number of full-time workers, the Seneca Gaming Corp. saves millions in benefits they don't have to pay.
- Between the jobs rightfully reserved for members of the Seneca Nation and other Native Americans, Canadians with experience working at Casino Niagara who came across the bridge to work and employees commuting from Buffalo and elsewhere, the number of full-time jobs Seneca Niagara has provided for residents of Niagara Falls likely numbers about 200.
"If it's that many, I'd be surprised," said one employee who has worked at the casino since its opening weeks.
The stunning success of Seneca Niagara's first year in operation made for a healthy bottom line and big bonuses for executives, who understandably don't want their employees, members of the Seneca Nation or anyone else to know just how healthy or just how big.
This isn't meant to contend that having a casino isn't better than not having a casino. But throughout the entire process of getting the casino approved, politicians prattled on about the jobs and economic impact it would provide as cover for giving away the farm. The Seneca Gaming Corp. was given 55 acres of prime land in downtown Niagara Falls, less than five blocks from a wonder of the world, for free. Sorry, make that $1. Thrown in for good measure: a mammoth building that, for all its shortcomings, cost millions to build and filled a lot of hotel rooms with conventioneers, dog owners and truck-pull fans over its nearly 30-year run -- rooms that now sit mostly vacant, with the old Convention Center and all the acres around it off the city's already-decimated tax rolls forever.
In return for all of that, the city gets $9.5 million and maybe 200 jobs, while footing the bill for extra police and maintaining infrastructure. Quite a bargain.
Brown has made it quite clear that how much money is being made on the land and in the building you gave the company he runs is none of your business. Nor does he think much of it should get back to the people he's supposedly working for.
But it is, and it should. Whether you're a member of the Seneca Nation, a resident of Niagara Falls or just a New York State taxpayer, you have a right to know.
And now you do. At least some of it. Something tells me, though, more of the story will be sliding under our office door soon.
David Staba is the sports editor of the Niagara Falls Reporter. He welcomes e-mail at mailto:firstname.lastname@example.org
3 ACCUSED IN MORE CIGARETTE SMUGGLINGMICHAEL BEEBE , Buffalo News, February 22, 2004
Three convicted tobacco smugglers, including a son of Seneca Nation Tribal Council Chairman Barry E. Snyder Sr., have been accused of taking part in another smuggling ring, this one allegedly involving $37 million worth of contraband cigarettes from China and Taiwan. The three men are among the targets of the nation's largest-ever investigation of contraband cigarettes, according to U.S. Immigration and Customs Enforcement agents in Texas. The alleged smuggling ring cost the federal government and various states $8 million in lost taxes, the agents said.
The defendants, who will be sentenced in coming weeks in Brooklyn for their part in the earlier smuggling of phony Marlboros from China, were arrested along with two Niagara Falls men and 14 others after they were indicted on the new charges in El Paso, Texas.
Scott Snyder, 41, of the Cattaraugus Indian Reservation, and two non-Seneca business partners, Donald Deland, 43, and Timothy Farnham, 38, both of Fredonia, were indicted on numerous counts of trafficking in contraband cigarettes, money laundering and fraud.
The two Niagara Falls men, Peter Pembleton, 45, a Seneca who runs a Salamanca smoke shop, and Anthony Leone, whose age was not available, were indicted on similar charges that also involved avoiding federal taxes on both legitimate and counterfeit cigarettes.
All five men pleaded not guilty in El Paso earlier this month and were released on bail ranging from $20,000 to $50,000.
Federal agents said the ring was run by Jorge Abraham, 34, of Sunland Park, Texas, who they said is known along the Mexican border as King Fayuca, Spanish slang for King of the Smugglers.
Abraham, a quadriplegic after he was shot in a dispute in Juarez, Mexico, was already in custody on charges of smuggling 400 pounds of marijuana across the Texas border.
The five Western New York defendants, if convicted, could face up to 20 years in prison and millions of dollars in fines, authorities said.
Snyder and Deland already could face prison terms of between 37 and 46 months in the New York City case; Farnham could face 30 to 37 months in prison.
Snyder's attorney, Barry N. Covert, is working with an El Paso lawyer on Snyder's defense. He declined to comment, other than to say that he is reviewing the indictment and that Snyder pleaded not guilty. Texas lawyers for the other four defendants did not return calls seeking comment. Those defendants, too, pleaded not guilty.
Senecas sell cigarettes and avoid charging state tax by using the sovereign status of the Seneca Nation of Indians. Some of them said they were baffled about why Snyder would risk buying contraband cigarettes when there is so much money to be made by doing it legitimately.
New York State has suspended efforts to collect taxes on sales to non-Senecas while it tries to work out settlements with various tribes.
The lengthy indictments, which authorities say were based on thousands of recorded conversations and forged shipping documents, accuse each of the defendants of buying millions of cigarettes and wiring hundreds of thousands of dollars to Texas.
The indictments accuse Pembleton of wiring $440,020 for the contraband cigarettes; Farnham with sending $332,350; Leone, $228,000; Snyder, $185,250; and Deland, $100,750.
Seneca officials banned Deland and Farnham from Seneca reservations after their earlier arrests and convictions, and Deland's Double D Smokeshop was closed.
Barry Snyder Sr. was one of the first Seneca businessmen to use the nation's sovereignty to sell tax-free cigarettes at the Seneca Hawk in Irving and Seneca Hawk Petro in Salamanca. Barry Snyder Jr. has two gasoline stations and smoke shops, Jr.'s and Jr. II, on the Cattaraugus Reservation.
Scott Snyder does not own a gas station but sells cigarettes as Snyder Enterprises and Iroquois Tobacco Co. from a small trailer near his home on the Cattaraugus Reservation.
EFFORT GROWS TO GET SENECA CASINO DOWNTOWNTOM PRECIOUS, Buffalo News, February 1, 2004
ALBANY - State, congressional and city leaders are intensifying efforts to persuade the Seneca Nation to abandon plans for a new casino in Cheektowaga and instead refocus on the downtown Buffalo Convention Center. Besides enticing the Senecas, the officials also are trying to change the minds of opponents, including County Executive Joel A. Giambra. He pulled the convention center off the table a year ago and has recently tried to line up supporters to slow the new Seneca outreach, sources said.
Top Seneca leaders are cautiously enthusiastic about the renewed emphasis on the downtown site, though obstacles remain, said sources involved in discussions that have stepped up over the past three weeks. As a show of interest, Seneca officials have toured the convention center site in recent weeks.
Among those lobbying the Senecas to place their third Western New York casino in the convention center are a bipartisan coalition led by Rep. Thomas M. Reynolds, Assembly Majority Leader Paul A. Tokasz and Mayor Anthony M. Masiello.
The players pressing the Senecas appear united on two issues: They don't want the Senecas going to Cheektowaga or to Buffalo's waterfront.
Reynolds, a Clarence Republican, has been a major point person in the talks with the Senecas, sources say. He did not return repeated calls to comment.
Tokasz, a Cheektowaga Democrat, declined to characterize the efforts but said he has "always favored a casino in Buffalo as an economic engine for the city."
"That was the intention of the law," he said of the 2001 state legislation approving the Seneca casino deal, "and my opposition to a casino in Cheektowaga just reinforces the belief that it should be in downtown Buffalo."
Sources involved in the discussions say Reynolds, Tokasz and Masiello are pressing Giambra to join their effort to attract the Senecas to downtown. The county executive has offered different ideas about where a Seneca casino might go.
Over the past year or so, Giambra has blocked efforts for a casino at the convention center, which the county owns.
Giambra once suggested the Senecas build a second facility in Niagara Falls but later said Buffalo could be home to a casino, and he gave approval to talk about a waterfront site.
Giambra was out of town Friday and could not be reached to comment; his top adviser, Bruce L. Fisher, did not return calls to comment.
The Senecas are getting anxious to decide where to locate their third and final casino in Western New York, sources say. But the Buffalo casino location idea still has a long way to go, according to some Senecas.
One leading Seneca official said hard feelings remain among some tribal members over the coolness they were given when suggesting a Buffalo casino a year ago.
"When they talk to other people, they're willing to give them anything," Barry E. Snyder Sr., a longtime Seneca leader, said of government officials. "When dealing with the Senecas, it's one way: their way.
"They were willing to give Adelphia $100 million to go downtown. When it comes to the Senecas, they don't do anything. They just expect us to come downtown. It's a one-way street."
Masiello, although optimistic about the renewed effort, also was critical of those who oppose a casino downtown.
"If this was a private-sector company coming from Ohio or Florida wanting to create a new business downtown with 2,500 jobs, people would be falling all over themselves," he said. "But here, we don't like what they are making or their product or service."
The stakes are large and involve competing interests among political and business leaders.
The key issues include:
Can the Senecas, angered over perceived sour treatment by public officials in past Buffalo casino development efforts, be wooed to abandon a suburban gambling hall?
Does any Seneca deal also include a plan to build a new convention center in Buffalo, and who will pay for it?
Can downtown accommodate the traffic and other issues a casino will bring?
Several scenarios are being examined. One has the tribe locating in the Buffalo Convention Center while it either does, or does not, contribute financially to a new convention center. The Senecas put their first casino in the Niagara Falls Convention and Civic Center. Another idea, though less popular, has the tribe moving temporarily into the Statler Towers while a new convention center is built, and then locating in the existing convention center.
Although talks have been going on, opposition already is building to the convention center casino plan.
"Yes, we understand there continues to be a significant interest in the Buffalo Convention Center as a location for a Buffalo casino, and there are a lot of issues and concerns remaining about proceeding with that interest," said Andrew J. Rudnick, president of the Buffalo Niagara Partnership.
But Rudnick said his group's members doubt the site would be right for the city and question how local revenue sharing from casino profits - local governments get a share of Seneca casino revenues - would work. He added there are "conceptual and constitutional" questions still remaining about the Senecas' casino gambling compact with the state.
The state Constitution prohibits casino gambling, but because the Seneca Nation is recognized as a sovereign nation, it is allowed to build casinos if it reaches an agreement or compact with Albany.
The Senecas have looked at various sites in Cheektowaga after studies they commissioned showed more money could be made by a gambling hall located in the eastern part of Erie County than downtown. Several tracts of land near Buffalo Niagara International Airport were being eyed last year as possible sites.
Seneca President Rickey L. Armstrong Sr. and former president Cyrus M. Schindler, who officials say have been discussing the convention center idea for the tribe, did not return calls to comment.
Those involved in recent talks say Rep. Jack F. Quinn is also involved in the downtown effort. But an aide said Quinn prefers a Buffalo location other than the convention center.
"His basic position is he's not too crazy about gambling in general, but if the decisions are made and they are coming to the area, he'd prefer it to be in downtown Buffalo, and specifically the waterfront," said his spokesman Charlie Keller.
Quinn is, Keller noted, "very opposed" to a Cheektowaga site for a Seneca casino.
NEVADA OF THE EAST?TOM PRECIOUS, Buffalo News, January 21, 2004
ALBANY - The handwriting was on the wall Dec. 7, 1994. Just a few weeks from taking office as governor, George E. Pataki was lamenting to reporters the proliferation of gambling in nearby states and a new Indian casino in Central New York. On that day Pataki backed away from his opposition to casino gambling and talked of wanting to have "far greater state control" over gambling.
In the nine years since, Pataki has more than fulfilled that desire, using an estimated $2 billion to balance his latest budget, and now he is looking ahead to double that amount in the near future.
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The latest turn to gambling by the governor came Tuesday in his 2004 budget plan. He proposed that the state sell franchises to eight companies for the exclusive right to open gambling halls with thousands of video lottery terminals - devices that look, sound and play like slot machines.
The Legislature's leading gambling opponent, State Sen. Frank Padavan, R-Queens, has predicted that Pataki "will leave office having converted New York, if he's successful, into the mecca of gambling in the nation."
The $2 billion a year from gambling the state generates to balance its budget comes from lotteries, tracks, off-track betting parlors and the 1-year-old Seneca Niagara Casino in Niagara Falls.
That number is now projected to at least double once tens of thousands of slotlike devices, known as VLTs, come on line in New York over the next few years at eight previously announced gambling halls and eight new ones Pataki is seeking. In all, Pataki said the video lottery terminals will bring as much as $2.5 billion in added annual revenue. By comparison, the state estimates taxes on all businesses will generate $5 billion annually.
The gambling revenue is dedicated to education. Pataki is proposing that the money from the 16 new casinos be deposited into a special fund. That money would be used to comply with a major court ruling last year ordering the state to devise a new school funding system to end educational inequities in New York City schools.
"The notion that our kids are going to be educated based on how much money people are going to lose is offensive," Padavan said.
In Albany, no one publicly admits to liking the spread of gambling. Pataki said Tuesday, in a session with reporters, that it is not his "personal preference" to use gambling revenue to balance the budget. But for years, Pataki has said that people are going to gamble - witnessed by New Yorkers traveling to casinos in Atlantic City, Las Vegas and Ontario.
"I want to see New Yorkers spending those dollars . . . in New York," he said Tuesday.
Asked about the social impact of his new gambling plan, the governor insisted it is "very limited." He called his plan "prudent, intelligent, constrained."
The governor's office declined to say how many firms might want one of the franchises or where they could go. But Pataki's proposal would not stop anyone - a hotel, casino company or even a Native American tribe - from opening a VLT facility in, say, Buffalo or Niagara Falls or Amherst or anywhere deemed potentially profitable. Under the governor's plan, local residents have no say in accepting or rejecting a new gambling hall.
Within hours of Pataki's proposal, the state racing industry, facing its own fiscal crisis, began railing against it. In 2001, eight racetracks were given approval by the state to begin VLT betting. Today, after much delay, the tracks are poised to spend several hundred million dollars to build VLT gambling halls.
"The timing is terrible," said Dennis Lang, chief executive of the Erie County Agricultural Society, which owns Buffalo Raceway. There, $8 million is being spent on a facility that, come March 17, will have 996 VLTs.
"We are concerned," Martin Basinait, president of Western Regional Off Track Betting Corp., said of the governor's plan.
The OTB's track, Batavia Downs, is set to open in July with 750 VLTs. A new gambling facility at the track is costing taxpayers - the OTB is a public benefit corporation - about $6.5 million.
"It would have been nice if we could have been up and running for a year or so to see what the market could stand and be on the road to recouping our investment," Basinait said.
State already a betting hub
Gambling critics say New York is quickly becoming the Nevada of the East. Prior to the big 2001 gambling law expansion, the state already was a betting hub. There are 250 OTB facilities, as well as telephone and Internet wagering allowed by some OTBs. Meanwhile, eight tracks plan to offer 16,500 slotlike machines. The first track VLT casino opens next week in Saratoga Springs.
The 2001 law also legalized up to six Indian-owned casinos in New York, including three Seneca-run facilities in Western New York. So far, only the Senecas have opened a casino under that law. The Niagara Falls facility last year took in $4 billion in bets.
When all six casinos are opened, they could offer more than 20,000 slot machines and thousands of table games. That's on top of the betting already under way at two casinos that opened in the 1990s - the Oneida-run Turning Stone in Verona near Utica and the St. Regis Mohawks along the St. Lawrence River.
Meanwhile, Pataki has urged that New York join a multistate, high-stakes lottery game. Tuesday, he proposed relaxing all restrictions, such as limits on the number of hours betting can take place, on Quick Draw, a video keno-like game. Last year, New Yorkers bet $5.4 billion on lottery games.
The Rev. Duane Motley, a Rochester-area minister who is among the plaintiffs in a pending lawsuit challenging the constitutionality of the 2001 gambling law, quipped: "This shows the governor has a gambling addiction. Maybe he ought to go to Gamblers Anonymous."
Cornelius Murray, the lawyer representing Motley, Sen. Padavan, Assemblyman William Parment, D-Jamestown, and business and civic representatives against the 2001 gambling law, said Pataki's latest gambling proposal violates constitutional bans on commercial gambling.
"It's putting a hole so big in the Constitution you can drive a truck through it," Murray said.
Pataki defends plan
The governor on Tuesday defended his new plan, coming as the 2001 law is still under court challenge. "We're very confident" the law will be upheld, he said.
While the gambling companies have been spreading around campaign contributions and hiring lobbyists, Pataki has said the reliance on gambling is necessary to bring in revenue and create economic opportunities in areas of the state with lagging job growth.
But the timing and methods of the governor are curious, observers say. They note his opposition to the lawsuit over education funding that he lost last year. The Court of Appeals ordered the state to improve its school financing system. His funding response is the new gambling expansion, worth $2 billion a year to schools.
Later this year, the high court is likely to consider the lawsuit challenging the 2001 gambling expansion at tracks and Indian casinos. Will the same court that ordered school financing reforms be willing to strike down the way Pataki is proposing to fund that edict?
"In a way, it's the governor sticking it to the Court of Appeals," said Bennett Liebman, head of a racing and wagering think tank at the University at Albany Law School and a former state gambling industry regulator. "It's almost as if he's playing a game of chicken with the Court of Appeals."
Still, Liebman said, the new plan proposed by Pataki, while harmful to racetracks, could be more profitable for the state. That's because the racing industry keeps 29 percent of the revenues from its VLT operations. The measure proposed Tuesday by Pataki gives a maximum of 20 percent to operators.
Legislative leaders, meanwhile, know that if they reject Pataki's plan it means having either to find other revenue sources to make up the difference or, cut spending.
As of Wednesday, though some offered concerns, no top lawmaker was ruling out Pataki's gambling plans. Senate Majority Leader Joseph Bruno said he has long abhorred the notion that gambling money balances the budget.
"It's nice to pontificate and be idealistic," he said, but Pataki "is dealing in realities" and has to find revenues.
Real slots versus VLTs
What about the Native Americans? They, too, will be pinched by more competition for the betting dollar. Indeed, one lawyer said the state may be hard-pressed to continue demanding revenue-sharing from future Native American casinos if the tribes no longer are guaranteed exclusive gambling arrangements in a particular region.
But Mickey Brown, head of Seneca casino operations, said bettors prefer real slots to VLTs, which often don't take or dispense cash, but use debit cards, and are hooked up to a central computer unlike a stand-alone slot machine.
From a business perspective, he said, Pataki's plan "doesn't bother me."
BETTING ON BANKRUPTCYDAN HERBECK, Buffalo News, January 6, 2004
It's one last piece of bad financial news from a year that left many Western New Yorkers reeling. The region set a dubious one-year record in 2003, with 9,547 bankruptcy filings. That tops the previous record by almost 15 percent. And most of the cases were filed by individuals, as opposed to businesses.
Several factors fueled the increase, bankruptcy experts say, including unemployment, rising health care costs, bankruptcy lawyer advertising, the aggressive marketing of credit cards and a new casino in Niagara Falls.
"The one new factor that has emerged in the past year is the opening of the new casino," said Bankruptcy Court Judge Carl L. Bucki. "To me, that sends up a red flag."
The number of people seeking counseling for gambling problems also set a record at the Gambling Recovery Program run by Jewish Family Service in Buffalo.
"Since the new casino opened, we've had 268 new applications for service, which was 53 percent above the previous record," said Renee Wert, director of the program. "Most of the people who come to us for counseling on gambling have filed for bankruptcy. Unfortunately, the bankruptcy works as a financial bailout for some of these people."
Others point to a stagnant local economy as a prime reason for the bankruptcy increase.
"If you ask me, the problem is this - jobs, jobs, jobs," said Edward M. Williams, director of counseling for the Consumer Credit Counseling Service of Buffalo. "We need more jobs, and especially more good jobs, in Western New York."
"The increase (in bankruptcies) is happening on a national level; not just locally," said Jeffrey M. Freedman, a bankruptcy attorney with 13 law offices in the region. "Locally, we're seeing more bankruptcies filed by single mothers who are receiving no financial support from the fathers of their children."
Western New Yorkers - the Buffalo court accepts bankruptcies from people in Erie, Niagara, Allegany, Cattaraugus, Chautauqua, Genesee, Orleans and Wyoming counties - now file more than twice as many bankruptcies as they did a decade ago.
The previous record for bankruptcy filings in Buffalo was 8,331 in 1998.
No comprehensive studies have been done to determine what is behind the rise, but Bucki - a judge since 1993 - is convinced that the increased availability of legalized gambling is a major factor.
"I definitely believe that an increase in gambling is one of the factors," he said. "More and more, we see people standing up in court and saying, "I gamble too much.' "
The Seneca Niagara Casino opened in Niagara Falls just over a year ago. It has been estimated that patrons bet approximately $4 billion at the casino in its first year of operation. In December 1996, Casino Niagara opened in Niagara Falls, Ont.
"They don't list the casinos as creditors, because casinos don't take credit. But I believe people are getting behind in their mortgages or car payments because of money they're gambling away at the casinos," Bucki said.
"Most people don't admit to a gambling problem, but you see people with huge amounts of unexplained debt," said the attorney, a nationally known expert on bankruptcy trends and practices. "I went to the casino for dinner about three months ago, and I ran into five or six of my clients there."
A reporter who contacted the casino for comment on the issue Monday was referred to John Pasqualoni, a vice president in charge of slot machine operations, but Pasqualoni was unavailable.
[Ed. note: The rest of this article has been omitted because is was not directly relevant to the gambling issue. It is available in the Buffalo News archives]
SENECAS URGED TO RECONSIDER BUFFALO CASINOSHARON LINSTEDT, Buffalo News, January 17, 2004
State Sen. Byron W. Brown hopes the prospect of Bass Pro Shops is a draw for a Seneca casino.
If downtown Buffalo is good enough for Bass Pro Shops' consideration, it should also be a fine place for a Seneca Nation of Indians casino, according to State Sen. Byron W. Brown. Citing Bass Pro's stated interest in developing a retail/entertainment complex in Memorial Auditorium, Brown is calling on the Senecas to give downtown another look.
CALL TO ACTION!!!
If you think Byron Brown's effort is wrongheaded, and casinos are NOT good for Buffalo, please write him to let him know. For your convenience, here is
Sen. Brown's Address, and
a Sample Letter
"I believe it's time to reopen discussions with the Seneca Nation to reconsider opening their Erie County casino in downtown Buffalo," Brown said.
He said Bass Pro's proposed megastore, museum, hotel and restaurant, combined with HSBC Arena and other existing attractions and amenities, will enhance downtown's status as the region's entertainment hub.
In August, the nation announced it had eliminated city sites from its list of potential locations and had turned its focus to a handful of undisclosed sites near Buffalo Niagara International Airport. The nation has not wavered from that position and has stated it will announce a Cheektowaga site by March.
Seneca leaders were in state tribal meetings Friday and could not be reached to comment.
Mayor Anthony M. Masiello, a longtime advocate of a downtown gambling venue, said Bass Pro's serious interest in the Aud compounds the benefits of tapping into a city site.
"More is more. If I was the Seneca Nation, I'd want my casino to be in a location that could feed off other exciting attractions," Masiello said. "That's the beauty of having an entertainment district and an exciting downtown."
The mayor said he has been working behind the scenes with political leaders and downtown stakeholders on efforts to change the Seneca Nation's casino plans.
"The dynamics have changed. With Bass Pro in the picture, downtown has become an even more compelling location for gaming," Masiello said.
Cheektowaga Supervisor Dennis H. Gabryszak said his town's attributes as a casino destination are not diminished if Bass Pro opens on the downtown waterfront.
"I'm sure a Bass Pro will attract a huge volume of people to downtown Buffalo, but we've already established ourselves as a destination for millions more local residents and out-of-town visitors. We have synergy," Gabryszak said.
GIAMBRA SEEKS NOTIFICATION ON CASINOThe Buffalo News, November 16, 2003
If you don't think a casino should be in Buffalo either, please write to Joel Giambra. Write in you own words, or use our sample letter.
County Executive Joel A. Giambra has written the U.S. Department of the Interior and the Bureau of Indian Affairs, asking that he be notified as soon as any application to acquire property in Erie County is made by the Seneca Nation. Giambra said he hopes to head off any attempt by the Senecas to buy property to build a casino in Cheektowaga, particularly along the Transit Road-Genesee Street corridor.
"We will use whatever resources are available to us to prevent an ill-conceived decision from being made," Giambra said.
He said he also intends to join forces with Tim Sherry, who heads the neighborhood group Citizens Opposing New Casinos in Existing Residential Neighborhoods.
While Seneca Nation officials have repeatedly stated that they don't believe the county executive has any role in determining the casino site, Giambra referred in his letter to a section of the Indian Gaming Regulatory Act that says the secretary of the interior must determine "after consulting with state and local officials" that casino placement won't hurt the surrounding community.
Giambra said once he discovers the Seneca Nation has chosen a particular Cheektowaga location, he intends to request a traffic study that he believes will highlight the problems associated with building on such a site.
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