Room for a View > Special Report
Shifting Dollars: Will Indian Casinos Save the Catskills?
By Lorrie Klosterman


illustration by Jim Campbell

The economic tale of the Shawangunk and Catskill Mountains in New York features two eras of splendor, when upstaters imported financial nourishment from their city cousins. The first of these ran from the 1800s to the early 1900s, when the privileged elite journeyed from New York City up the Hudson River by boat, then by train or horse-drawn carriage to handsome mountain houses with breathtaking views, like the Catskill Mountain House on North Lake in Green County, and the Overlook Mountain House, perched above Woodstock atop Overlook Mountain. The second era had its peak from the 1940s through the 1960s, when close to a million Jewish vacationers fled the city each summer. Winding their way north through Orange, Sullivan, and Ulster Counties, some enjoyed premier hotels and country clubs of the so-called Borscht Belt, while others brought their families to more modest "bungalow colonies."

Both of these eras have come and gone. With the exception of the thriving Mohonk Mountain House outside of New Paltz, little is left of the mountain houses: a few ghostly stone walls embraced by encroaching forests, scars of foundations and roads on the shoulders of the mountains, and century-old inscriptions carved into the rock. Many of the Borscht Belt destinations still stand and draw visitors, but their heyday is long over, and memories of them are far richer than their present incarnation.

In the three decades since the decline of the Borscht Belt, communities in Sullivan and western Ulster County have suffered. Jobs are scarce and low-paying, younger generations are leaving, and the economic options are grim. "There used to be five hundred hotels up here," says a source at the Sullivan County Chamber of Commerce who prefers anonymity. "Now there's three. All the big comedians were here and top name people were here playing the Catskills. But that crowd all went to Las Vegas."

Las Vegas in the Catskills?
Now there is hope for a third era of prosperity that could turn everything around. Big Class III casinos, with table games like roulette and craps, card games like poker and blackjack, are illegal as commercial ventures in the state but allowed by the federal government on Indian land, or on land that is newly purchased within a state and then put into trust with the Department of Interior, Bureau of Indian Affairs. This is the proposed savior for the regional economy.

Governor Pataki and the state legislature passed a bill last year for development of Indian-sponsored casinos in some of New York's most economically needy regions. Sullivan/Ulster Counties got the nod for three, as did the Buffalo/Niagara Falls region, which currently loses millions of dollars to Canada from the pocketbooks of American gamblers. Albany's gambling go-ahead has brought hopes of economic recovery and beyond to some, infuriated others, and spawned a rash of lawsuits to prevent the casinos from being built.

The story of how this is shaping up already would fill a book. Chapters could include the counties' rags-to-riches hopes, disputes within tribes about who speaks for them and between tribes over who qualifies for the opportunity, and a diverse camp of opponents like a wetlands protection group, the Saratoga Chamber of Commerce, the New Yorkers for Constitutional Freedoms (a Christian anti-gambling group), a state legislator, and Donald Trump. Most formidable among opponents' claims is that the state's bill is unconstitutional, and indeed gaming of the sort that the casino would offer is illegal in the state's constitution (though the Oneida Nation's Turning Stone Casino off I-90 in Verona was created by agreements that are touted as a sound model for other casino projects). If deemed unconstitutional, that could stop the whole idea. Nevertheless, several Indian tribes are in the process of seeking host locations and commercial partnerships to birth a casino. At present, the two most advanced proposals are for Sullivan County.

Win-Winning with a Casino
The St. Regis Mohawk Tribal Council, whose reservation straddles two counties in northern New York (St. Lawrence and Franklin) and two provinces in Canada, have been seeking an off-reservation site for a casino for years. Now they are partnered with Park Place Entertainment, the world's premier gaming development company, to open a complex at Kutcher's Sports Academy in the town of Thompson. In addition to 165,000 square feet of gaming space, Park Place envisions a championship-grade golf course, 1,500-seat theater, 750-room hotel, 25,000 square-foot spa, 50,000 square feet of retail space, and "multiple gourmet and themed restaurants." A 50-acre parcel of the Kutsher land would be purchased and transferred in trust to the St. Regis Mohawk Tribal Council, making it officially an Indian-owned casino. The tribe would receive roughly 70 percent of net revenue from the resort, and Park Place 30 percent.

Although not all members of the Mohawk tribe are behind the deal, it is proceeding. An original ground-breaking date of late 2002 is nearly impossible, however, due to legal challenges. "The constitutional issue will have to be resolved, or close to resolved, before we move forward with major construction," concedes Robert Stewart, Senior Vice President of Corporate Communications for Park Place Entertainment. "Now we're now hoping to break ground in 2003."

The other proposal currently in the works has the Stockbridge-Munsee band of Mohicans partnered with Trading Cove Associates (developers of the Mohegan Sun casino in Connecticut). They are eyeing Bridgeville, just off Route 17 at exit 107, near Monticello. They have an additional stumbling block, however: convincing authorities that New York State indeed was once their home state. Currently, they reside in Wisconsin, where they run a successful casino. Only tribes that have proven ancestral ties with New York State are allowed to pursue a casino deal.
Rowena General, spokeswoman for the St. Regis Mohawks, is very optimistic about the benefits of the plan. She emphasizes that a gaming facility would help the struggling people of Sullivan County, as it has her own people. "We have something in common with them," she says. "We are both trying to improve our economic and social situations." Her tribe already has made headway on their reservation, where a casino employs about 450 workers, of whom half are tribal members. "We have seen first hand in our community that if you provide training and employment opportunities to people who do not have any other opportunities out there, that will rehabilitate the person more than anything else. We have seen so many changes in our own people who have been offered employment. They go through training, they are all licensed by the state, they have acquired experience and now could go anywhere with this training. This has directly improved the economic and social conditions of many of our own tribal members."

They may have discovered how to do something that the federal government has been unable to accomplish for decades. A report released in 1999 by the National Gambling Impact Study Commission (NGISC), created in 1996 by Congress, is not hesitant to applaud the value of tribal gaming. "Gambling revenues have proven to be a very important source of funding for many tribal governments, providing much-needed improvements in the health, education, and welfare of Native Americans on reservations across the United States." They reviewed decades of federal programs and found "no evidence presented to the commission suggesting any viable approach to economic development across the broad spectrum of Indian country, in the absence of gambling."
www.casino-gambling-reports.com

The economic turnarounds that gaming has provided some tribal people may also work for socioeconomically depressed non-Indian communities like Sullivan county. In addition to thousands of union jobs in construction and service, the county and town of Thompson have been promised a total of $15 million a year from the casino managers (Park Place and Kutsher's) for at least the first seven years of casino operation. County officials are already discussing what to do with it: much would defray casino-related expenses like expanded law enforcement, public safety programs and mental health services; some would go to infrastructure improvements to accommodate the thousands of visitors and new residents drawn to the area; also, capital improvement projects could be funded from the casino deal.

Ulster County would receive a similar financial deal if the Modoc Tribe of Oklahoma pursue the idea of putting a casino at the Nevele Grande resort in Wawarsing. Wawarsing needs the help, says Ward Todd, Chairman of the Ulster County Legislature. "Our belief is that of all the towns, Wawarsing is the best fit for a casino. The figures that we get from census show that it is one of the most depressed, if not the most depressed town that really needs some kind of a boost. It shows the effects of the huge tourism boom of the '30s, '40s, '50s, and early '60s. The hotels in that area thrived, and then when that business died-there's just nothing left." The Modoc Tribe has estimated that they could take in $400 million a year, and would provide 6,000 well-paying jobs at the casino complex. So far, however, there has been no referendum or survey of residents about the idea, and Todd hears opinions both in favor and against it.

The Losses that Fuel the Gains
These new millions for Sullivan and Ulster counties would be derived from gaming earnings and other casino profits, but just who will be letting go of these dollars? Will the spenders be the wealthy of New York City, as in eras past? Or will it be the average earner in the region, or the below-average earner who can least afford to lose, hoping to turn their luck around?

At least some of the gamblers will be those who already patronize other locations. Hence, the dramatic overt and covert attempts by Atlantic City gambling mogul Donald Trump to kill Catskill casinos and Saratoga's attempt to block them to preserve their racetrack revenues. Trump is being investigated by the New York State Lobbying Commission for allegations that he paid for anti-casino and anti-Mohawk ads in newspapers, radio, and television throughout the Northeast in 1999 and 2000. According to the Mohawk Nation's Indian Time Newspaper (September 8, 2000), "The ads were an effort to sway the New York State Legislature toward adopting tougher new regulations regarding off-reservation casinos, most specifically to hamper the St. Regis Mohawk Tribal Council's efforts to establish a casino 95 miles north of New York City." Trump countered in a September, 2000 New York Post interview that he would look into establishing his own Indian-sponsored casino on property he owns in Manhattan if the St. Regis Mohawk's deal goes through. "I love building beautiful apartment houses, but I'd make a lot more money building a beautiful casino," he said.

Upstate New York casinos would almost certainly draw some patrons of Atlantic City north; and some New York City residents, who already migrate to the Shawangunks and Catskills on weekends, would surely participate in the country's exploding gambling craze, as more than two-thirds of Americans do.

But casino opponents fear local residents will pay out the most. Part of the NGISC's study of gambling in the US included an analysis of 100 communities that had casinos within 50 miles. When the casino was put in, residents increased their average casino spending by 237 percent. Proximity apparently made a difference. It wasn't determined whether this represented new gambling behavior or switching from other gambling options, but people who lived very close (within 10 miles) spent an average of $400-$600 per year at the casino, versus $50-$100 on state lotteries and $10-$30 on horse/greyhound racing (if available).
www.norc.Chicago.edu/new

Gambling at casinos is based on personal choice, and gamblers expect to lose much of the time. But some fear that area businesses might lose on a grander scale, as the big destination complexes suck visitors within their walls. This has happened in some locations. According to the NGISC report:

In Atlantic City and elsewhere, small business owners testified to the loss of their businesses when casinos came to town. As evidence of this impact, few businesses can be found more than a few blocks from the Atlantic City boardwalk. Many of the "local" businesses remaining are pawnshops, cash-for-gold stores, and discount outlets. One witness noted that, 'in 1978 [the year the first casino opened], there were 311 taverns and restaurants in Atlantic City. Nineteen years later, only 66 remained, despite the promise that gaming would be good for the city's own.'"

There are also social impacts to consider. Gambling can attract or generate problems like addictive gambling, increased substance abuse, homelessness and crime. Some casino opponents are most concerned about the prospect of pathological gamblers either coming into or arising from their communities. The prevalence of problem and pathological gamblers (about 2.5 percent of adults in the US) does in fact double in communities within 50 miles of a casino. In addition, these people are more likely to have been on welfare, been arrested, or declared bankruptcy. It is not known if those problems or gambling problems came first, but they both extract a financial and social toll.

An Upside That Won't go Away
In spite of these problems, the NGISC's final report described an overall considerable benefit to local communities where a casino had been introduced:

"Hundreds of employees in several cities described the new and better jobs they had obtained with the advent of casinos. Some described relocating from other states to the sites of new casinos; others spoke of leaving minimum-wage jobs in which they had no benefits to accept unionized jobs at the casinos at higher compensation and with significant employment opportunities. Some described the homes and cars they had been able to purchase, and the health and retirement benefits they had obtained by going to work for the casinos."

A specific regional example is Foxwoods Resort Casino in Connecticut, which has drastically changed the economic picture for its host county of New London. The Connecticut Center for Economic Analysis at the University of Connecticut (www.lib.uconn.edu/ccea) calculated that almost 13,000 jobs have been created since the complex was opened by the Mashantucket Pequot Tribal Nation in 1992, an 18 percent increase, and that personal income increased 10 percent. Whole-state increase were a tenth of these during the same period. Other economic boons attributed to Foxwoods: millions of dollars in property taxes to nearby towns and a billion dollars from slot operations to the state. The tribe also has built a $193 million Native American Museum that draws tourists and extends their stays in the region. Further, nearly three-fourths of visitors to the resort come from outside the state, bringing in outside revenue.

The Oneida Indian Nation, who run the only casino currently operational in New York, Turning Stone, state at their Web site: "Over the past ten years, the Oneida Indian Nation has re-built its economic base through Turning Stone Casino Resort, and a variety of other enterprises. Proceeds from these enterprises are used to provide dozens of services including housing, health care and education programs, to its members. The Nation's economic development initiatives have provided stable, well-paying jobs to more than 3,100 Central New Yorkers, most of whom are not Indian."

Asked how Sullivan County has weighed the potential downside of casinos, a Chamber of Commerce member explained: "When you have nothing, any industry that wants to locate within your borders is welcome. We are pro-business."

Greenbacks and Greenways
In a May, 2000 public announcement about their intention to acquire the Kutsher site, Park Place Entertainment's President Arthur Goldberg (who has since died) extolled the natural beauty surrounding the1,400-acre Kutsher property. "It's a great site overlooking two lakes in one of the most beautiful areas of the United States," he said, adding, "In developing the resort we intend to…maintain consistency with the environment and to tie-in the beauty of the natural surroundings whenever and wherever possible."

But some are asking: Is such a beautiful piece of the country the right place for a casino of the magnitude being proposed? Not everyone in the area is excited about an added surge of humanity coursing along route 17 (currently being upgraded to "Interstate 86"), the transportation artery that branches off the NY Thruway and cuts across the mountains into the heart of the region. What will become of the un-developed tracts of forest, famous rock-climbing cliffs and hiking trails, strategic wildlife corridors and fragile ecosystems, when the estimated tens of thousands of travelers stream to and from their casino get-aways? Casino-goers themselves may just drive by these other riches, but service jobs at the casino are predicted to draw new residents and their families, and open the area to a magnitude of population growth and commercialization that eventually could impact these resources.

The Shawangunk Ridge Coalition recently was formed to fight development in the southern end of the Shawangunks. The area is a vulnerable island along a hundred-mile stretch of protected highlands snaking from New Jersey's Kittatinny Mountains to the northern reaches of the Catskills. The coalition's founder, John Meyers, points out that some of the areas under consideration for casino development, like Kutsher's near Monticello and a site near Bridgeville, were tamed in the Borscht Belt era and have less to lose in terms of intact natural ecosystems. But the traffic and associated growth along route 17 could get out of hand. Even more troubling is that at least two casino proposals are eyeing Mamakating, near the ridge itself. "These are sites that have never been developed, and so are more of a concern. They are not an appropriate place," says Meyers.

Also at risk if development goes ahead along the ridge would be the 3,000-acre Basha Kill wetlands, on the Orange/Sullivan County border just south of Wurtsboro. It is the largest freshwater wetland in southeastern New York and is home to almost 200 kinds of birds, including bald eagles, wild turkeys, and pheasants, plus a diversity of mammals, 30 varieties of fish, box and snapping turtles, salamanders, frogs, toads, and a thriving invertebrate population. The Basha Kill Area Association is challenging Mamakating's planning board, which is accused of making zoning and master plan changes specifically to accommodate development proposals, in spite of local opposition. A poll of Mamakating residents found 59 percent were against a casino on the Shawangunk ridge; 89 percent wanted a referendum put to them regarding changes in the zoning. For these people, the value of the existing land and community override the possible advantages of a casino.

Indians on a White Horse
It seems a strange irony that Indians, economically the poorest of any group within the United States borders, may rescue some of New York's most beleaguered communities. For the tribes, it offers something held sacred within mainstream culture: good old greenbacks. They certainly could use some. Consider these grim statistics about reservation life: one of every three Native Americans lives below the poverty line; half of all Indian children under the age of six are living in poverty; on average Indian families earn less than two-thirds the incomes of non-Indians; approximately 90,000 Indian families are homeless or under-housed; the suicide rate among Indian youth is nearly three times the national non-Indian rate.

The St. Regis Mohawks, if they get their casino, will use its revenues to improve tribal government services, social programs, schools, housing, water quality, and more. Some casino dollars could go to their environmental research and remediation programs that are trying to overcome a poisoned homeland, which is downriver from a PCB Superfund site. So toxic are the land and water from activities of three nearby industrial behemoths (General Motors, Reynolds Metals Company and ALCOA) that the people are warned not to eat the food they grow, nor the fish they catch, nor drink the water of their streams. The tribe has established a number of environmental research and education projects on its lands, partnering with institutions like SUNY Oswego, SUNY Albany, and state agencies
www.oswego.edu/other_campus/ers

"We are not going to do anything extravagant with the money," says tribal spokesperson Rowena General about the income they may eventually see from a new casino. "We will use it to raise the standard of living among our people to a reasonable level, in line with the rest of the country instead of like the third world."

Lorrie Klosterman, PhD, lives in Red Hook and is a freelance writer and educator. She is also managing editor of the Hudson Valley GREEN Times.

Note: Steve Israel at the Times Herald-Record has been tracking the complex, sometimes elusive, and oft-changing specifics of the casino deals. A many-month cache of his articles chronicles the two-steps-ahead, one-step-back process.
www.recordonline.com