Tribe Bids for Casino
Eye on Queens, as local gaming plan bides time
By Jennifer Landes
 Deak Planning and Design
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(10/18/2007) Odds that the Shinnecock Indian Nation will be able to build what it calls a “full-scale casino at the Aqueduct Racetrack, a facility that would generate more than $2 billion annually,” are pretty slim, according to state officials who would be part of the approval process.
In response to a New York State request for “expressions of interest” to run a video lottery terminal system at the site, the tribe submitted a grander proposal on Monday.
According to Lance Gumbs, a tribal trustee, the use of the site for the limited purpose of video terminals — which act as slot machines, but are structured like a lottery in terms of possible outcomes — was a waste of resources. In its submission, the tribe proposed an alternative: a 490,000-square-foot casino (including 10,000 slot machines, 350 gaming tables, and 1,200 hotel rooms) that, Mr. Gumbs said, could generate far more money for investors and the state.
“The numbers don’t lie. . . . We feel this could be a potential boon for New York. Look at Foxwoods and Mohegan Sun, they’re getting $500 million a year out in the middle of the woods. Imagine what could come of this,” he said.
Yet in addition to a number of obstacles the tribe would have to overcome to see its casino vision realized, there is competition, as well. According to Governor Eliot Spitzer’s office, the Shinnecocks are up against proposals from six other groups: Delaware North Companies and Saratoga Gaming and Raceway; the Foxwoods Development Company of Connecticut, Greenwood Racing of Pennsylvania, Mohegan Sun of Connecticut; Penn National Gaming, and Seneca Gaming Corporation.
Mr. Gumbs said that when the Shinnecocks and their representatives heard of the intention of Foxwoods and Mohegan Sun to pursue the Aqueduct site, they decided they should become involved to help keep the money generated in the state.
“Two or three months ago, once we saw what was going on, we looked at the viability” of the state’s proposal for the video lottery terminals. “After doing the numbers of what would potentially be done . . . it was not a worthwhile proposal for the state or the bidder. With the bulk share of it V.L.T.s, the bidder actually only gets 17 percent of the profits and is responsible for maintenance and everything else. It’s really not a worthwhile proposal, unless you’re doing it on a larger scale.”
Although the competitors are more closely following the state’s model, Mr. Gumbs said, “a lot were thinking about this, but we came out and said it. They’re all hoping to do the same thing in the long run.”
The Shinnecocks’ partners are Gateway Casino Resorts, a Detroit-based company that developed Motor City Casino, now owned solely by Marian Ilitch, a founder of Gateway. Ms. Ilitch and her husband, Michael Ilitch, made their fortune by founding the Little Caesar’s pizza chain. Mr. Ilitch owns the Detroit Tigers baseball team and, through a holding company, the Detroit Red Wings hockey team.
Gateway has been funding the Shinnecocks’ legal pursuit of federal recognition as a tribe, as well as covering costs from the tribe’s defense in a lawsuit brought by Southampton Town and the state to prevent it from developing property in Hampton Bays that was cleared in 2003 to build a bingo hall, with plans for an eventual casino. The suit, which centered on the tribe’s recognition and aboriginal rights to the property, did result in federal recognition on the judicial level (though not a complete federal recognition). Its right to the land, and whether those rights were ever interrupted by a sale, is pending a decision. Gateway also funded a land claim lawsuit filed by the nation in 2005.
As the Shinnecocks envision it, they would own the Aqueduct casino, which would require $1.4 billion in investment and return a half-billion in revenue to the state annually, by their estimates. In addition to the jobs generated by its construction, the casino would generate 12,000 on-site jobs, as well as opportunities for vendors and contractors. The tribe would consider the current Hampton Bays lawsuit, and possibly the land claim, settled if it were allowed to go forward with its plans.
The state, however, does not allow gambling casinos unless a federally recognized tribe runs them.
Although the nation has been recognized as an official tribe by New York State for more than two centuries, the Shinnecocks are still in line to be recognized by the Bureau of Indian Affairs in the United States Department of Interior. They submitted their application in 1978 and were cleared for consideration in 2003 after it was deemed complete by the bureau.
In 2005, as part of the Hampton Bays lawsuit, United States District Court Judge Thomas C. Platt issued a decision recognizing the tribe, but the bureau has refused to put it on its list of recognized tribes until it goes under the bureau’s own review, which is pending with 10 other applications in line before it.
The Shinnecocks have since sued the Department of Interior in federal district court to be placed on the list. They maintain it is illegal to not place them on the list after they have received federal judicial recognition.
The tribe also filed an amended complaint incorporating documents that show that the tribe was listed in a 1914 Department of Interior report to the United States Congress as a tribe in New York State subject to federal jurisdiction with federally protected lands. This was reaffirmed in other department lists dated 1929, 1938, and 1941, according to the Shinnecocks.
Mr. Gumbs noted that the tribe was also included in a book “The Handbook of Federal Indian Law,” compiled by Felix Cohen for the Department of the Interior in 1945, which includes the Shinnecocks in its listing of tribes in New York State. The tribes listed here and in the other department lists have all since been added to the department’s current list of federally recognized tribes or have successfully sued to be placed on it without having to go through the Bureau of Indian Affairs review, he said. (See related story on this page.)
State support, Mr. Gumbs said, could help expedite whatever hurdles remain to full federal recognition.
Still, Christine Pritchard, a spokeswoman for Governor Spitzer, said, “the state can’t consider a casino until the Shinnecocks’ federal recognition has been resolved. We are bound by federal law and the Indian gaming regulatory act, which states that a tribe must be recognized by the [Bureau of Indian Affairs] for a casino.”
Nothing is barring the Shinnecocks from owning or managing a video lottery terminal facility, she said, and the state will review each proposal for that carefully. But a casino, or what the state defines as a “class two gaming facility,” cannot be considered at this point.
Even if the tribe were recognized tomorrow, it would have to reach a “compact,” or agreement, with the state, which the State Legislature would have to approve. Then, the Bureau of Indian Affairs would have to approve the compact. Since the land is not considered “aboriginal territory” or lands that the Shinnecocks have occupied consistently throughout their existence, it would have to be taken into trust by the federal government and the Department of the Interior would have to approve that, as well.
“There would be community input and a hearing process — also on the state and local level,” Ms. Pritchard said. A similar process had to take place with property the Mohawk tribe is slated to use for a casino in the Catskills; the Department of the Interior has had the application for some time. Although the Spitzer administration has been supportive of the Mohawks’ effort, she said, the department “is not generally in favor of off-reservation gaming.”
Assemblyman Fred W. Thiele Jr. said he had asked around after the Shinnecocks’ proposal was made public this week, and from what he is hearing from his colleagues in the Assembly, “anything beyond V.L.T.s at Aqueduct is dead on arrival.”
If their proposal is considered just for the existing franchise, Mr. Thiele said, “the Shinnecocks would be considered like any other proposers. The downside is their lack of experience,” which he acknowledged would be made up for by their partnership with Gateway. “On the plus side, they are from New York State.”
As for support for the Shinnecocks at Aqueduct, he said, “it remains to be seen what it would be in any community in the City of New York.” But judging by the history of similar proposals, he said, he did not think “anyone was real anxious to have gambling in the city.”
The State Senate was expected this week to put forward its own proposal for the site, which could include forming a new state authority to oversee the facility’s management. The move is in reaction to the bankruptcy of the state’s racing association, due to mismanagement, and to Mr. Spitzer’s proposal to separate racing operations from other gambling operations.
Lest the South Fork feel left out, Mr. Gumbs said, a gambling operation within the Town of Southampton would be his personal first preference. The local community would benefit from jobs created, as well as a reduction in property taxes, with casino tax revenues flooding the coffers of fire departments, school districts, and so on. “The taxes that could have been saved here will go to Queens instead,” he said. “The local politicians are making a big mistake by not looking at that.”