Saturday, September 22, 2007

The Pennsylvania and New York Landscapes

By Ken Davison

In just three weeks, the closest competition to the Tribe’s Pocono Downs in Pennsylvania will open. The Mount Airy Casino and Resort, located in the Mount Pocono resort area and just twenty miles east of the Tribe’s Pocono Downs, is scheduled to open on October 15th.

It is not known what effect this will have on the Tribe’s racetrack and slot parlor in Wilkes-Barre, Pennsylvania. The Mount Airy casino will have 2,500 slot machines and 200 hotel rooms.
About seventy miles northeast up the mountains from the Poconos are the Catskills of New York, where various Indian tribes are hoping to build casinos. The current head of the Bureau of Indian Affairs, Dick Kempthorne has said he is opposed to off-reservation casinos and that if he approves one then he would have to approve them all. The St. Regis Mohawk Tribe's bid for a casino in the Catskills has the support of New York Governor Eliot Spitzer but is stalled on Kempthorne's desk.

On September 12th, the New York State Division of the Budget (DOB) announced it was seeking expressions of interest from experienced gaming operators to operate a 4,500 machine slot machines (video lottery terminal, or VLT) at Aqueduct Racetrack and calls for responses by October 15th. The operation of VLT's at the Belmont Racetrack, which was included in the first round of bids, is not part of the new bid.

Capital Play, a firm that asked the Mohegan Tribe to join them in their bid, was knocked out of the bidding that ended when the governor announced that New York Racing Association was selected as the franchise to operate the state's three racetracks.

The Mohegan Tribe and its development partner, Capital Play Inc., said after the selection that they would submit a letter of interest to run a gaming facility at Aqueduct Racetrack. While they intend to bid on the gaming at Aqueduct, according to The Day, "the Tribe and Capital Play are nonetheless continuing to lobby the Assembly heavily not to accept Spitzer's awarding of a bid for the operation of the three tracks to the racing association and the separate deal for gaming."

Paul Francis, a senior advisor to the Governor said, “We believe that the Governor’s recommendation to award the racing franchise to a newly reconstituted NYRA—as the best operator of racing in New York State—while seeking an experienced gaming operator to operate the VLT facility offers the best opportunity available to enhance the racing industry in New York while generating the maximum revenue possible for education. We look forward to working with the legislature to translate the Governor’s proposal into law and are prepared to answer any questions they may have about the specific terms and conditions of the Governor’s recommendation.”

In a news release, the governor's office points out that "Funds from the VLT facility will provide sustained funding for elementary and secondary education, while also supporting the operation and improvement of the three thoroughbred racing facilities. The state will receive in excess of 70% of Net Machine Income (“NMI”) from the facility in the form of statutory payments for education and operation of the Lottery and approximately 14.5% of NMI will be dedicated to supporting thoroughbred horse racing in New York State. The remaining funds will be used to pay operating expenses including salaries, debt service, taxes, and a management fee if applicable."

The Aqueduct Racetrack opened in 1894. It is the only racetrack located within New York City limits and it also the New York Racing Association's headquarters. Mr. Spitzer has said he would submit a plan within two months for the awarding of the separate franchise to operate thousands of VLT's at the Queens racetrack.