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CHALLENGERS PREPARE LAWSUIT

The first lawsuit against the sweeping gambling package approved last week in Albany is expected within a few days, as opponents try to stop the betting parlors from opening.

Those challenging the gambling package, which includes casinos for Western New York, include clergy, business leaders and even a few state lawmakers. They say Gov. George E. Pataki and the State Legislature crossed the legal line in approving slot machines and Indian-owned casinos. They also say some of the money from gambling will not go to state education, violating the state constitution.

The lawsuit is intended to send a clear message: The hurdles for the biggest gambling package in state history are far from over.

Gambling supporters dismiss the arguments as weak. They insist judges won't delay efforts to open as many as six casinos in Western New York and the Catskills, as well as bring slotlike machines to the state's racetracks.

Gambling opponents acknowledge losing the legislative battle in Albany, but they insist they still hold enough legal ammunition to keep the casinos from ever opening.

"I would think the biggest impediment to this whole thing is the outcome of litigation," said Assemblyman William Parment, D-Jamestown. Parment was a plaintiff in a court case earlier this year that restricted the governor's ability to make casino deals.

Parment is expected to join several religious leaders, including one from Buffalo, another downstate lawmaker and a chamber of commerce group near Albany, in suing to stop the casino and other components of last week's gambling package.

The lawsuit will challenge the legislation on everything from the governor's power to strike such casino deals with Indians to the legislation's permission to let the Senecas install slot machines for the first time in New York.

The group of likely plaintiffs is coming to the case for vastly different reasons.

Some, like Parment, have constitutional concerns. They believe the Legislature illegally handed Pataki a blank check to negotiate casino compacts with Indian tribes without a final legislative vote. Pataki aides dispute that contention, saying previous court decisions and the gambling bill's construction protect them.

Other opponents, such as the Saratoga Chamber of Commerce, have business concerns. The Saratoga chamber is preparing to raise $100,000 to battle the gambling bill in court and protect its thoroughbred-driven tourist economy.

"Casino gambling in the State of New York is not legal, and the constitution says electronic gambling devices are not legal. That's your basic document, the state constitution. How do you get around that?" said Joseph Dalton, president of the chamber group in Saratoga Springs.

Still others raise social concerns. These include people and organizations that say gambling is not worth the resulting societal problems, no matter how much money the state needs.

"I find it immoral that our Legislature would use the tragedy of the attack on the World Trade Center as a rationale for victimizing the most vulnerable in our communities on the altar of casinos and slot machines," said the Rev. G. Stanford Bratton, co-director of the Network of Religious Communities in Buffalo, and an expected plaintiff.

Judge shopping

For sure, the final chapter in the casino debate has yet to be written, despite claims by some Seneca leaders that a casino in Niagara Falls could be opened as soon as next year.

Beyond a referendum in the weeks ahead by Seneca Nation members, approval is also needed from the U.S. Department of the Interior. Seneca leaders have insisted that approval will easily follow passage of the casino compact in the Seneca referendum.

But before the department approves the compact, the agency must consider the Senecas' ability to construct casinos off their reservations. The department has approved an Indian nation's building a casino off a reservation only three times.

Many casino opponents in New York, however, remain convinced the federal government will go along in the end.

Less certain are the courts. The first lawsuit, and there may be more, probably will come either this week or next, after Pataki signs the gambling measure, probably at a ceremony in Niagara Falls. The lawsuit will challenge not only the casino plan, but its permission for racetracks to install slotlike machines and for a new, mega-jackpot lottery.

Lawyers for the Seneca Nation of Indians did not return calls to comment. But a Pataki spokesman, Joseph Conway, said the governor and his staff expected such lawsuits.

"We fully anticipated that this would generate legal challenges, since most issues do in New York," he said. "But we're confident that we are on firm legal ground."

That will depend on how a judge reads the law. That, in turn, may depend on who that judge is.

The plaintiffs, therefore, may search for the judge most likely to agree with their arguments. Getting the right judge in the right location -- perhaps a judge far removed from one of the proposed gambling sites -- will be a factor, at least at the lower court level.

Legal arguments

The legal arguments are many.

On entry into Powerball, which very likely will send some New York bettors' money into 26 other states, the opponents will argue that the state constitution requires all lottery revenues here go to the state's education needs.

On the slotlike machines for racetracks, the plaintiffs also will argue that money is being illegally diverted from schools to help bail out ailing racetracks. One lawyer called the bid to give money to education while helping pay for higher purses at racetracks "a transparent farce" and a "money laundering" scheme.

The casino issue gets trickier. Many critics want to challenge the legality of allowing anyone in New York to possess slot machines. Though the constitution does not specifically ban slot machines, it does allow only gambling games in which numbers or colors are not "previously selected" by bettors.

"How do you preselect cherries on a slot machine?" said one state lawyer.

Additionally, critics say, federal law permits Indian casinos to offer only those forms of gambling that are also available to non-Indians in the same state. And commercial casinos with slots are not legal in New York, they note.

One possible solution that casino supporters took last week was to approve a provision in the gambling package that decriminalizes possession and use of slot machines.

"Just because you decriminalize it doesn't make it constitutional," said one state lawyer, who requested anonymity.

Critics note previous opinions by New York attorneys general that slots are illegal.

But Pataki aides say only state law, not the constitution, forbids slot machines, and that law was changed in the gambling bill.

Another key legal challenge will be the state's revenue-sharing deal with the Senecas, in which Albany gets 25 percent of slot machine revenues. Federal law bans a "quid pro quo" arrangement, in which a provision for the state to collect money is seen as a requirement for a casino deal.

Pataki aides say the revenue sharing comes not as a demand, but as a deal between the state and the Senecas in which no one else in a huge geographic area can operate slot machines.

Opponents of gambling add that their legal challenge was helped when the State Senate last week passed a first step toward amending the constitution to allow non-Indian-owned casinos in a number of areas of the state, including Erie and Niagara counties. If casinos are legal, as the proponents argue, then why the need for a constitutional amendment? one lawyer asked.

"To me, it's a concession that there's a serious constitutional question whether they can do this," said Cornelius Murray, an Albany lawyer who will bring the lawsuit trying to block the gambling package.

He represented the same group of religious leaders and lawmakers in a successful suit in which a lower court this year said a governor can't make deals on his own for Indian casinos.

Federal approval needed

While the court challenges proceed, the casino compact will undergo a complex approval process in Washington.

And before it grants approval, the Department of the Interior's Bureau of Indian Affairs will want to ensure that the Seneca Nation gets the best possible deal from New York. Some parts of the gambling package may present a challenge for that approval.

To begin, the federal government has frowned on such large state payouts as the 25 percent revenue sharing arrangement the state will get from Seneca slot machine revenues.

Experts in Indian law also questioned whether the gambling package presented the Seneca casinos with too much competition. Racetracks, including Batavia and Hamburg, will be getting slotlike machines, and the Senate's initial approval of a constitutional amendment permitting non-Indian gambling could pose major competition for the Senecas.

"They're compromising the meaning of the term 'exclusive,' " said William N. Thompson, an expert on gambling at the University of Nevada-Las Vegas.

"I know the Bureau of Indian Affairs will be taking a good look at this," said John Hart, general counsel for the National Indian Gaming Association.

The bureau refused to back a New Mexico compact that would give the state 16 percent of gaming revenues, all because that state permitted some non-Indian gaming, too, Hart said. As a result, the state share of revenues had to be whittled to 8 percent.

While the Senecas have not publicly commented on that issue, the Mohawks -- who would operate the casinos in the Catskills -- acknowledge that the gambling machines at racetracks could pose problems getting the state's gambling compacts approved in Washington.

"Of course the BIA is going to raise some concerns," said Rowena General, a spokesman for the tribe.

The Bureau of Indian Affairs did not respond to phone calls.

The racetrack issue also threatens to complicate an already cumbersome federal approval process. Approval often takes months or years for even routine Indian casinos, and much longer in the rare cases where casinos are built off-reservation, as the Senecas' would be.

The Senecas believe a provision of the tribe's 1990 Salamanca lease deal will get a quicker response from Washington.

But the author of that 1990 settlement, Rep. Amo Houghton, R-Corning, has said it was by no means intended to speed the approval of casinos. And even if the measure can speed land acquisition, the compact governing the casino deal will still need Interior Department approval. Meanwhile, the National Indian Gaming Commission must approve any management contract that the Senecas enter into for casino operations. That's another potentially lengthy process.

"I don't even want to venture a guess as to how much time it will take" to get the various federal approvals, Barry Brandon, the tribe's lawyer, said last week.

e-mail: tprecious@buffnews.com
and jzremski@buffnews.com

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