N.Y. tribes expect casino to be lifeline to better times

Seneca Nation is set to become biggest employer at Niagara Falls

January 09, 2003|By James M. Odato | James M. Odato,ALBANY TIMES UNION

NIAGARA FALLS, N.Y. - Rows of brightly colored slot machines await the coins of gamblers at the refurbished Niagara Falls Convention Center, where the Seneca Nation intends to become the biggest employer in this tired border city.

After an $80 million face lift and $30 million worth of furniture and fixtures, the concrete dome that has been a debt-ridden, deteriorating landmark for decades has risen with new purpose from the mist of one of the world's great wonders.

It has become New York state's newest casino.

Viewed by many as a business that will enrich both an impoverished Iroquois tribe and a cash-strapped state treasury, the casino is opening in a mad dash to beat lawsuits and opponents of more gambling in New York.

First of three

Gov. George E. Pataki recently cut the ribbon at the Seneca Niagara Casino. It is the first casino in New York with legal slot machines in a deal Pataki negotiated in 2001. It is envisioned as the first of three Seneca casinos in western New York and the start of a proliferation of gambling venues across the state, including up to six new American Indian facilities and eight horse tracks offering slot machines.

For the Indian nation and the region, the casino offers much needed jobs and economic development. For the state, it represents hundreds of millions of dollars in revenue from the state's approximately 25 percent cut of quarters dropped into the 2,625 slots. Estimates are that the state will receive at least $1 billion in revenue during the 14-year compact term, sharing a small amount with the municipality for services.

The casino opening came after a split vote among the Seneca and violent feuding over gambling that left three members dead.

But for two relatively violence-free years of debate, the supporters of gaming represented by the Seneca Party have built a team of high-powered lobbyists, casino experts, lawyers and politicians to pitch gambling as a way out of centuries of poverty.

Sovereignty issue

"I'm looking to maximize our revenue-generation capabilities ... to strengthen our economy and strengthen our sovereignty status," said Rick Armstrong, who recently defeated an anti-casino rival to become Seneca president. "We've been depending on grants for a long time."

He replaced Cyrus Schindler, a former ironworker now working as chairman of Seneca Niagara Falls Gaming Corp., the entity created to operate the casino. Schindler worked closely with Pataki on the gaming compact.

The corporation is paying 29 percent interest to its financial backer, the Malaysian Lim family that bankrolled Foxwoods Casino in Mashantucket, Conn. But Schindler, a smoke shop operator, said the rate is not extraordinary.

"When I started my business, I couldn't get a bank loan. I maxed out on five credit cards. But I got my business and I paid the debt in a year," he said.

Touring the casino recently, Seneca Corp. President and Chief Executive Officer G. Michael "Mickey" Brown recalled what it looked like when the state turned it over to the Senecas on Sept. 22. Repairs needed to be made to the roof, which still leaks in spots, and the building's motif was changed from 1970s bowling alley to a somewhat gaudy trees-and-forest theme.

`It was a dump'

"It was a dump," Brown said.

Brown, the former chief executive of Foxwoods, helped build the Connecticut Indians' business from a 60,000-square-foot cinder block bingo hall into the world's biggest casino. He said the Seneca operation has become the only full-service casino in New York complete with slots and liquor. It is much bigger than the St. Regis Mohawk tribe's casino in Hogansburg, and smaller than Turning Stone, run by the Oneida in Verona.

Brown hypes the place as superior to Casino Niagara, just over the Rainbow Bridge. From his office overlooking the new gambling floor, he said: "We're going to be a better product. Ours will be larger, brand-new, all on one floor. It's going to be gambling in U.S. dollars and winning in U.S. dollars."

Brown also said he thinks the Seneca gaming will exceed that of Casino Niagara and Turning Stone.

The Oneida casino did $207 million in business in 2001, producing an almost $70 million net profit, according to a document provided to bond investors last month. None of it is shared with the state, although New York is suing, alleging the Oneidas don't have the right to operate gambling machines.

Unlike the Oneida and Canada facilities, Brown said, his casino will offer free drinks to gamblers while selling alcoholic beverages at casino bars. Brown said he is confident he'll get a liquor license from the Pataki administration, something the Oneidas have been unable to gain.

100-mile draw

Gaming analysts say Brown likely will draw mostly from a regional market extending about 100 miles around Niagara Falls. Attracting Canadians in large numbers may be difficult, they say, because of the weaker Canadian dollar, plentiful gambling north of the border and the benefit of tax-free winnings in the neighboring nation.

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