Contributed Illustration THE INTERIOR OF the proposed $600-million casino at Monticello Gaming and Raceway, whose future has been put into question by Friday’s decision.

No Dice!

By Frank Rizzo
SULLIVAN COUNTY — January 8, 2007 — On Friday, January 4, Secretary of the Interior Dirk Kempthorne sent letters to 22 Indian tribes across the United States, denying their applications for off-reservation gaming facilities.
Locally, the casino hopes of the St. Regis Mohawks (at Monticello Gaming and Racing) and of the Stockbridge-Munsee Band of Mohicans (at a site in Bridgeville) were dashed.
Associate Deputy Secretary of the Interior, James E. Cason, in his letter to the St. Regis chiefs, based in Akwesasne, NY (on the Canadian border), wrote:
The regulations… require the Department to consider the location of the land (to be taken into trust) relative to State boundaries and its distance from the boundaries of the Tribe’s reservation. As the distance increases the Secretary must give greater scrutiny to the Tribe’s justification of anticipated benefits from the acquisition, and greater weight to the concerns of local governments. The Tribe’s reservation and proposed Monticello parcel are… approximately 350 miles apart. The Department is concerned that the approval of this application would not support the option for tribal members to live on their existing reservation and to have meaningful employment opportunities at the proposed gaming establishment… because [it]… will not be located within a reasonable commuting distance from the tribe’s reservation.”
The denial letter further stated that, “The proposed gaming facility can have significant negative effects on reservation life.”
According to the St. Regis, in its December 2006 “Finding of No Significant [Environmental] Impact (FONSI)” the Interior Department actually stated that a Sullivan County casino would have “No foreseeable adverse effects on the tribe.”
In answer to Cason’s argument the tribe stated, “The Tribe… has a legacy of commuting to New York City for jobs where generations of countless Mohawk ironworkers built the very skyline that defines the city. Kempthorne has dared to suggest that Mohawks are incapable of conducting business and unable to hold jobs away from home, yet this is an ingrained part of Mohawk life where ties to the community are maintained.
The tribe plans to file a lawsuit against Secretary Kempthorne “for the arbitrary and capricious nature of the decision.”
“We find this decision and the new policies to be highly suspect and we question the motivations behind this policy that appears to be prompted by the super-charged political fancies and whims of the Secretary, to say nothing of the influence of special interest groups,” said Tribal Chief Lorraine White in a statement.
Media representatives for New York State Governor Eliot Spitzer and Senator Chuck Schumer did not return calls seeking comments.
In a statement released Friday afternoon, Congressman Maurice Hinchey said, “The decision by the Department of Interior today… does not come as any surprise. Based on the longtime opposition by the Secretary of Interior to off-reservation Indian casino gaming, stretching back to his tenure as Governor of Idaho, such a decision was frankly anticipated. From my conversations with the Secretary over the past year, as well as my discussion with him on this decision earlier this afternoon, it is clear that the next opportunity for these proposed casinos to move forward and be objectively evaluated will be under a new Administration by a different Secretary of the Interior, who under current law has the final determination in this matter at this time.”
“The casinos that were rejected would have brought millions of dollars of revenue into Sullivan County each year, and would have provided an overall economic stimulus for the area, particularly Sullivan County’s tourism industry,” said Sullivan County Legislature Chairman Jonathan Rouis in a statement. “For the Secretary to have dismissed these casinos without ever having set foot in Sullivan County, or without ever speaking to Sullivan County officials about the proposals, makes it clear that the Secretary was out to further his own agenda, not act in the best interest of the residents of Sullivan County.”
Minority Leader and District Seven Legislady Leni Binder released the following statement on the day of the decision:
“The push for casino gaming in Sullivan County has always been a bipartisan effort to bring economic stimuli and growth to our communities. This proposal has been supported by two New York State Governors and two terms of the Sullivan County Legislature. To summarily reject these casinos is a slap in the face to those two governors, and countless other officials who cooperated and acted in a bipartisan manner to see these projects realized.”
The $600 million Monticello casino project involves construction of a 766,000 square-foot two-story casino and entertainment complex featuring approximately 125 table games, 3,500 slot machines, 24 poker tables, and numerous restaurant and retail venues.
According to its backers, is expected to generate more than 3,000 permanent jobs.
The decision was also bad news for Empire Resorts, which operates Monticello Gaming and Raceway and is the Tribe’s development partner.
“Clearly, the Department of the Interior's decision, particularly coming after so protracted and meticulous a process in which we cleared all other administrative hurdles, is very disappointing to us and our partners,” stated David P. Hanlon, CEO and president of Empire Resorts. “Empire Resorts will continue to support the St. Regis Mohawk Tribe as it vigorously contests this regrettable decision.”
Hanlon added, “The company plans on… pursuing substantial economic development in the Catskills. The people of Sullivan County and the surrounding area have waited too long for Washington to wake up and come to its senses. In conjunction with all of our state and local supporters, it's time we took a hard look at a different approach to securing thousands of important jobs and economic opportunity.”
As of press time the Empire Resorts stock had dropped 50 percent from Friday’s closing to $1.53 on the NASDAQ index. Its 52-week high was $12.70.
In November, the company announced a $6.2 million drop in revenues for the third quarter compared to 3Q earnings in 2006. For the first nine months of 2007, revenues fell by $16.8 million (22 percent) compared to 2006.