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Catskill casino may not see the light of day

By Daniel Michaels, May 20th 2005
MONTICELLO, N.Y. A plan for casino gambling in the Catskill Mountains is finally in the works. Although the first lots bells won't ring until 2005 at the earliest, the CEO of the company that plans to build the first of three Indian casinos is already warning Atlantic City of fierce competition.
"This is New York versus New Jersey, it's nothing else, nobody in Atlantic City wants to see a casino in Sullivan County, New York, in the heart of their market...It's war." said Robert Berman, the CEO of Empire Resorts, Inc. The company has a deal with the Cayuga tribe to operate a casino on the grounds of Monticello Raceway.
Donald Trump, who owns three drowning casinos in Atlantic City, says only time will tell whether gambling in the Catskills will be bad for his business. Trump also adds that Indian casinos in New York State would be illegal without a state constitutional amendment.
There's no question that the stakes are high. Casinos in the Catskills, less than 100 miles from Times Square, could shave at least 40 minutes off the drive for city gamblers who head to Atlantic City or Indian casinos in Connecticut.
And with plans for a refurbished grandstand and a new 5/8th-of-a-mile harness track - plus 1,800 video lottery terminals already authorized by the state - this long-neglected village could reinvent itself as a minigambling mecca.
Berman, who's been trying to bring Indian gambling to the Catskill region since 1994, had special words of combat for Trump.
In 2000, the state Lobbying Commission fined Trump and his associates a then-record $250,000 for secretly funding a lobbying campaign against Indian casinos. He's also been a big supporter of a lawsuit that challenges the constitutionality of Indian casinos in the state.
"He's trying to kill us. He's been trying to kill us since we surfaced here," said Berman. "He's done everything he can possibly do to stop this and he continues to do so."
Grand plans
Although legislation signed by Gov. Pataki in 2001 authorizes three Indian casinos in the Catskills region, much work needs to be done before Berman's company can begin construction this fall on its $500 million, 585,000-square-foot gaming hall.
Among other things, the federal Bureau of Indian Affairs must sign off on the project and the Cayugas have to reach agreement on an operating compact with Pataki, a document that would spell out the state's share of revenues.
While Berman boldly predicts "this time it is different," Atlantic City gambling interests could still represent a formidable challenge to casinos in the Catskills.
"Ever since they passed the gaming act in New Jersey and those casinos went up in Atlantic City, every time that this state has made some progress toward the commercialization of casinos, every single time Atlantic City has just opened up the floodgates of money into our governing bodies in Albany and it dies," said Berman.
Tortured history
The effort to bring casinos to the Catskills has been a tortured one, dating to the 1970s, long before any Indians came into the picture.

While Atlantic City moved ahead with its plans - the first casino, Resorts International, opened in 1978 - the concept of casinos here was done in by the failure to pass a state Constitution amendment permitting commercial gambling.
"You can't believe the amount of money they spent to defeat a constitutional amendment," said Berman.
It was at that point that Berman and a group of investors hit on the idea of teaming up with the Indians - an idea that was gradually sweeping the country.
The Indian casino concept is quite easy to understand: The participating tribe uses its reservation, or in the case of a landless tribe like the Cayugas, a piece of land is donated for casino construction under a process called "land in trust."
The Bureau of Indian Affairs oversees the process where the land-in-trust property becomes, in effect, a sovereign Indian reservation.
The bureau must make two key determinations: that the casino operation will be in the best interests of the tribe and will not be detrimental to the surrounding community.
To offset new costs or income losses to the local community, the Indians have to pay impact fees, for example, to finance the education for additional students or to compensate churches for bingo losses.
Berman, whose company has undergone numerous name changes, first tried to do a deal with the Oneida tribe.
But their leaders did not want to negotiate a compact with New York State. "So that became a nonstarter," said Empire Vice President Charles Degliomini.
Things were smoother with the St. Regis Mohawk Tribe of New York - to the point that the bureau signed off on the project in 2000.
But just as Berman and his partners prepared to close the deal, Park Place Entertainment, which has large gaming halls in Atlantic City and Las Vegas, stepped in and - as Berman puts it - "stole the Mohawks from us."
The Mohawks and Park Place have an application pending to build a casino on the nearby Kutsher's Country Club property.
Who goes first
Berman said he doubts Park Place will ever build an Indian casino in the region unless someone else, like Empire Resorts, opens first. "If nobody goes first here, my personal belief is, you will never see them do anything."
Degliomini and Berman both said they hope all three Indian casinos eventually get built. "If you have one casino it's great. If you have three, it's a destination and it would really help change the area," Berman said.
At that point, Berman crows, "Atlantic City is dead. I'm telling you, they're dead."
Trump sees it differently, saying of Berman, "He failed up there miserably. He's the one who got his casino stolen by Park Place. They took it away from him like a baby - and now he's crying spilt milk. So that's Berman."
Cayuga spokesman Clint Halftown says that after in-depth analysis his tribe overcame its long-standing objection to gambling and decided to make a deal with Empire Resorts for the long-term benefits.
"We haven't had anything for over 200 years, when New York State violated federal law and mistreated Indians," he said. "This is a means of our beginning. We're going to be able to rebuild our nation."
To speed things along in the latest proposal, critical environmental impact statements approved under the Berman/Mohawk plan were resubmitted to the Bureau of Indian Affairs in April with the sponsoring tribe's name changed to the Cayugas.
That application, which covers a 30-acre, land-in-trust tract, is pending.
But the name-change game hasn't gone over so smoothly at the bureau's regional office in Nashville.
Brian Pogue, deputy regional director, said the Cayuga/Empire Resorts application will have to be expanded. "They have to bring it up to date. They need to freshen it up. It needs to be theirs."
Pogue said there is "no fixed timetable" for acting on the three Catskill applications. "It takes as long as it takes. It is a give-and-take process. We let them know what needs to be done and they respond."
Host of roadblocks
Regardless of what the bureau decides, there are other potential impediments to casinos in the Catskills.
n Sullivan County has threatened to sue to get $15 million in impact fees instead of the $5 million promised by the race track group. The Park Place-St. Regis Mohawks deal and a third proposal for a casino in nearby Bridgeville by the Stockbridge-Munsee Band of Mohicans calls for the county to receive $15 million for each casino.
The state Court of Appeals is expected to rule next year or in 2005 on the constitutionality of all Indian casinos in New York in a lawsuit brought by a coalition of religious, civic and business groups and ? says Berman - financed in part by Trump.
Last week, the bureau announced that it will require that all three Catskill proposals undergo more extensive federal environmental impact studies than previously planned.

In the meantime, Empire Resorts has starting tearing up the parking lots at the race track and performing preliminary site work.

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