By Ken Davison
Monday was the New York legislature’s last day of its regular session this year and the Mohegan Tribe heard nothing of its pending bid to operate a VLT slot parlor in New York City but did learn of a last minute agreement struck between Governor David Paterson and lawmakers that seeks to create a mega-resort in the Catskill Mountains, about 70 miles from the Tribe’s Pocono Downs racetrack-slot parlor in Pennsylvania.
In the agreement that Senate Majority Leader Joe Bruno calls “one of the largest development projects in all of upstate New York,” the Monticello Raceway would be moved to the site of a formerly renowned Catskills hotel and be re-made into a mega-resort that would include a 750-room hotel and 4,000 VLT slot machines.
Empire Resorts, which operates the Monticello Racetrack, will partner with Concord Associates. The Monticello Raceway currently operates 1,500 VLT slot machines but another 2,500 would be added under a plan that would move the racetrack two miles away to the 160-acre site of the former Concord Hotel.
The bill reduces the state’s take on VLT slot revenues generated at the Catskills resort. The state will reportedly cut the tax rate by over half, from 58% to 25%, upon the resort achieving certain economic development benchmarks, such as job creation.
Casinos have been touted as a way to lure tourists back to the once-popular Catskill Mountains but those plans have almost entirely evaporated. In January, the U.S. Department of the Interior denied two proposed Indian casinos in the Catskill Mountains. The Stockbridge-Munsee Mohicans of Wisconsin and the St. Regis Mohawks were told that their proposed Catskills casinos were too far away from their reservations.
The federal decision against the two tribe's casinos in the Catskills as well as federal denials for other off-reservation Indian casino proposals across the country was a blow to the Mohegan's own diversification efforts, in particular a partnership with the Menominee Tribe that hopes to build an off-reservation casino in Wisconsin.
Although the selection of a builder-operator of a VLT slot parlor at the Aqueduct Racetrack in Queens was not made before lawmakers left until the next regular session in January, the governor or legislative leaders can call lawmakers back into session for urgent business and likely would for the VLT slot parlor at Aqueduct.
The road to the Aqueduct VLT franchise began last summer when then-Governor Eliot Spitzer requested proposals for an operator of three N.Y. racetracks and VLT slot parlors at two of them – Aqueduct and Belmont racetracks. The entity that has ran those racetracks for the past half-century was selected to continue running them for the next 25 years and it was also decided to request new proposals to build and operate the VLT slot parlors. It was also decided that a VLT slot parlor would be added only at the Aqueduct Racetrack and not Belmont, also in Queens.
Governor Spitzer’s decision to select the New York Racing Association to continue operating the three racetracks infuriated Capital Play, the group in which the Mohegans are a partner, which lost in their bid for the racetrack franchise. Capital Play aired television commercials critical of the governor and the New York Racing Association.
Governor Spitzer resigned, which further delayed a decision on the builder-operator of the VLT slot parlor but perhaps boosting Capital Play’s shot at the 30-year VLT slot parlor franchise. Capital Play, comprised of a group of Australian horse racing executives, the Mohegan Tribe and two other companies are competing against two other groups for the Aqueduct VLT slot parlor franchise.
The Seminole Tribe, through its Hard Rock Entertainment subsidiary, is partnering with SL Green Realty Corporation and the third group is Delaware North, which currently operates New York racetracks with VLT slot parlors.
Both SL Green and Capital Play issued press releases on the legislature’s final day in regular session last Monday. SL Green’s press release stated that it secured the support of the New York Hotel and Motel Trades Council and the Building and Construction Trades Council. Both Trades Councils also appeared in Capital Play’s press release later that day.
New York Racing Association, the winner of the racetrack franchise, said he would like the VLT slot parlor franchise to be awarded to either The Seminoles or Delaware North but not Capital Play.
A key reason why New York Racing Association was awarded the franchise to run the three racetracks was largely due to their ownership claims on the land at all three racetracks.
Last week, current Governor David Paterson said more time was needed for background checks and further review of the financial projections of the three competing proposals before a selection could be made.
Notes on diversification timeline: Mohegans made announcement to patner with Menominee Tribe for casino in Wisconsin on January 7, 2004. The intent to purchase Pocono Downs in Pennsylvania was announced by the Mohegans on October 15, 2004.
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