Native American Tribes: The X Factor for the Future of NY Casinos

Jan 14, 2013

Native American Tribes: The X Factor for the Future of NY Casinos

As the dust settles on Governor Andrew Cuomo’s third State of the State address, like the previous year, the issue of expansion of “destination casinos” was again front and center. In his speech, the governor set out his vision for casinos in New York, restating a common theme that New York has been “all in” - to use a poker phrase - in the casino business for quite some time. His speech and casino plan were carefully circumscribed to take into account the presence of powerful Native American tribes within the boundaries of New York.

The governor’s speech noted the influence of Native American casinos, acknowledging the fact that five of these casinos already exist within the boundaries of the state. More importantly, after the speech the governor announced that his plan for three casinos in upstate New York would not include Western New York. That statement was a nod to the Seneca Nation which operates casinos in that region and is currently in arbitration over $460 million that the Seneca Nation has withheld from the state citing an expansion of non-Native American gaming allegedly in violation of the tribe’s exclusivity zone that arguably begins west of Geneva, New York.

Piecing together the governor’s statement concerning Western New York along with his position that the first phase of casino expansion will only include “upstate” and not New York City, reduces the area of the state where the governor would presumably find casinos acceptable. Add the fact that the Adirondack Park, with its 6.1 million acres and 9,375 million square miles is off limits and the acceptable zones for casinos come into focus fairly quickly.(This presumes that “downstate” - however you define that term - is really off limits for expanded gaming. That may be questionable, but we’ll leave that for a future post.)

Under Governor Mario Cuomo, the Oneida Indian Nation negotiated a compact which allowed the tribe to turn a vacant hay field into a bingo hall and eventually into the 3,400 acre Turning Stone Resort Casino near Vernon, New York. The casino’s fortunes have transformed the Oneida Nation and the entire region over the last three decades. An area that was once a manufacturing hotbed and home to companies like Oneida Limited, the now defunct world famous silversmith manufacturer (Sherrill, New York) and Griffiss Air Force Base (Rome, New York), has been replaced by the more than 5,000 jobs that the Oneida Indian Nation provides. This remarkable transformation has all occurred under the leadership of the formidable Oneida Nation Representative and Nation Enterprises CEO Ray Halbritter.

In the North Country on the Canadian border, with no racino competition, the Akwesasne Mohawk tribe operates a gambling enterprise that advertises more than 1,600 electronic table games and slots.

Both the Oneida and Mohawk casinos have undergone dramatic growth in an environment with limited competition.

The Nations are acutely aware of the impact that in-state competition could have on their fortunes. They only need to look across the border to Connecticut to see the future. Under the title “Foxwoods Is Fighting For Its Life,” a March 14, 2012 article in The New York Times reported that the Mashantucket Pequot Tribal Nation facility is in dire financial circumstances. Questionable expansions and crushing debt in the face of increased competition from surrounding facilities has put the casino more than $2 billion in the red. The condition has worsened considerably since the Times article with continued record prosperity of Genting’s Resorts World Facility at the Aqueduct race track in Queens.

The French writer Antoine de Saint-Exupery once famously said, “a goal without a plan is just a wish.” Time will tell whether the governor’s casino plan ends up being a State of the State goal or wish. Forces outside of his control, including Native American tribes, will have a lot to say about the ultimate outcome.

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