The proposal to put three Seneca Indian Nation casinos in Western New York passed its first major test with State Senate approval late Thursday, though many questions on the issue remain unanswered.
Meanwhile, the Seneca Nation of Indians today tentatively announced it will hold a referendum on the casino agreement on Aug. 7. The agreement also requires the approval of the State Legislature and the federal government.
The casinos will bring in at least $4 billion over the next 14 years in revenues just from slot machines and electronic games, according to projections by the Pataki administration.
The state government, meanwhile, will rake in at least $800 million under a revenue-sharing arrangement it demanded under a historic agreement announced Wednesday by Gov. George E. Pataki and the Senecas Nation of Indians that could bring three casinos to the region, including one in Buffalo and one in Niagara Falls. The arrangement would let the Seneca Nation of Indians operate the state's first casino with slot machines.
How much money will be left for the local governments? No one knows, but it will be just a small fraction of what will be going Albany's way -- maybe 3 percent, or $24 million, over 14 years.
How will Grand Island property owners be protected, considering the casino deal includes no settlement of land claim disputes? No one knows.
Who will build and operate the casinos? Will casino workers operating on the sovereign Indian lands be protected by federal and state employment protections? Who will cover the costs of the local police and fire protection and other city services at the casinos, or pick up the loss of property taxes of an Indian-owned building? How will the loss facing local Off Track Betting parlors, which share revenues with taxpayers, be made up from this new big competition?
No one knows.
Indeed, a day after Wednesday's announcement at Prospect Point overlooking Niagara Falls, there were as many questions as answers that left officials from the State Capitol to Western New York spinning vastly different tales about the future of Seneca casinos.
As midnight approached at the State Capitol, the agreement survived its first major challenge when, over objections by such potent forces as the Catholic Church, legislation giving the go-ahead for the deal was approved 39-13 in the Republican-led Senate during an intense debate.
Meanwhile, word spread Thursday that Pataki and the Senecas are more interested in a Niagara Falls casino than one in Buffalo.
Buffalo Mayor Anthony M. Masiello acknowledged he had been dealing with such verbal fires since Wednesday night. "I have talked to the governor personally. I have talked to (Seneca) President (Cyrus) Schindler personally. Everybody has assured me that Buffalo is a major player in this," Masiello said.
The $4 billion figure the state claims the Senecas might make over 14 years is based on just slot machines and electronic betting devices such as video poker. It does not include millions more the Senecas will make from the other games, including roulette, craps, high-stakes bingo and table games such as blackjack, or from revenues from food, hotel or entertainment that likely will be part of any casinos. The Senecas will have to pay their private partners a share, which one casino expert said must, by federal law, be kept to less than 30 percent of revenues.
The deal struck by Pataki calls for the state to get up to 25 percent of the slot machine revenues. Industry officials say such devices typically account for about 80 percent of a casino's total gambling revenues.
The administration says it will share some of that 25 percent with the local governments. But it hasn't defined which local governments will get the money, or how much. There is talk on all sides of a 3 percent revenue sharing with the local governments. If true, and based on the $800 million in expected state revenues over 14 years, that would amount to about $1.7 million each year to be shared among the local governments.
That means the fiscal windfall local officials hope for from the casinos will have to come not from the dollars bet on the casino tables, but from the economic spinoff, such as hotels and restaurants and jobs, they hope the casinos will spur.
But Masiello said he wants the city to be compensated for the city services a casino will need. Indeed, a memorandum of understanding between Pataki and Schindler calls for the Senecas to reimburse the state for the cost of the State Police and other state expenses associated with a casino. "I plan on presenting a case that the casino generates substantial revenues and profits and that we should share in some of those profits," Masiello said.
Other details began slowly emerging Thursday. For instance, the Niagara Falls casino will be temporarily located in the Niagara Falls Convention and Civic Center; its permanent home would be at the adjacent former Niagara Splash park. The Senecas would pay off $25 million in state debt used to finance the construction of the convention center.
The Senecas, according to Seneca lawyers, will spend about $20 million from a fund obtained in a land settlement dispute involving Salamanca back in the 1990s to purchase land in Niagara Falls and Buffalo for casino operations.
The Senecas also won an exclusivity arrangement, in which the Senecas alone among Indian tribes will be able to offer slots in a huge swath of Western New York. But Michael McKeon, a Pataki spokesman, said that arrangement does not prevent racetracks from offering casino-like games; such a lobbying push is under way at the State Capitol, and indeed has intensified since the Seneca casino deal was announced.
Land claims, or the lack of land claims, continued to create concerns about the deal struck by Pataki. Critics say Pataki should not have brokered the agreement unless he got the Senecas to drop the Grand Island land claims dispute. He also failed to resolve disputes over reservation tax-free sales of gasoline and cigarettes.
Although Thursday's State Senate vote is only one in a multistep process, the approval is significant because this was the same body that rejected attempts to bring non-Indian casinos -- through a state constitutional amendment -- to Buffalo, Niagara Falls and other regions of the state a few years back.
The Senate balked initially at the bill permitting Pataki to enter into a casino compact with the Senecas, with Senate Majority Leader Joseph Bruno claiming the plan was too vague. Still, Bruno signaled his intent. "The most devastated area in all of New York State is the Niagara Frontier, so we're going to be responsive to that," Bruno said.
With the Senate rushing to adjourn, lawmakers approved a separate bill to include casino worker protections demanded by labor unions, and language intended to make it easier to steer some of the casino revenues to local governments. It also puts the state's casino revenue share into a special fund that the Legislature, and not the governor alone, can control.
The measure endured debate, arm-twisting and intense lobbying on a bleary day when the Senate passed hundreds of bills as it sought to finish much of its regular business for the 2001 session before breaking for a month or so.
"I know black and white when I see it, and this to me is a black hole that we go deeper and deeper into," Sen. Frank Padavan, a Queens Republican and leading gambling critic, said in urging his colleagues to block the Seneca casino bill.
Supporters saw the Senate action as crucial to keep the momentum from Wednesday's announcement going -- both in Albany and on the Seneca reservations, where splits between pro- and anti-gambling forces were already forming. Before any quarters can be plunked into a casino in Niagara Falls or Buffalo or an undisclosed Seneca reservation site, the plan must be approved by state lawmakers, Seneca members and, finally, the federal government.
"It's an important first hurdle," said Sen. George Maziarz, R-North Tonawanda, who represents Niagara Falls. Maziarz said it is up to the Assembly now to act. "This is their chance," he said, to help the region's economy.
Sources said the Senecas' well placed lobbyists were floating a plan that would have the Buffalo facility located at the Statler Towers and the Buffalo Convention Center in a mixed-use plan including hotel, restaurant and gambling.