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Casino Rachacha?

Seneca Niagara Casino

The next drama is beginning

Sixty-five miles east of Buffalo, in the general vicinity of the Genesee River, a battle is heating up over whether, when, and where the Seneca Gaming Corporation will establish a fourth gambling casino. The target area for the next casino complex has been announced: It’s a highly developed commercial corridor where existing restaurants, hotels, and other retail businesses would suddenly face a tax-exempt, politically wired competitor that explicitly targets local residents.

Unlike in Niagara Falls and Buffalo, where local politicians clamored to bring the slot machines, the fight so far involves businesses. This past week, the people who operate the horse-racing track and video gambling parlor in Batavia filed an ethics complaint against a Rochester developer who may or may not be lobbying to help the Senecas put their next casino in the town of Henrietta, the suburb with a big commercial area quite close to a major New York State Thruway exit for the Rochester metro. Tempers have already flared: A registered lobbyist who is already on the Rochester developer’s payroll snarled to the news media that he’s the lobbyist, not the developer, and that everybody has been on notice about this since at least since Governor Cuomo and the Senecas announced their agreement last August.

In nearby Canandaigua, there’s another racetrack with slot machines. The Canandaigua business is operated by Delaware North, the Buffalo-based firm that knows the gambling business very well, in many and varied places in North America and beyond. Delaware North has lobbyists that can be expected to advance its interests, which include the Finger Lakes racetrack, which employs 502 people and has a significant impact on the regional agricultural economy, being that in addition to folks working at the restaurant and slot-machine parlor there, there are horse-trainers, jockeys, veterinarians, and other jobs at stake.

But unless there’s an effective campaign that engages the broader business community, the elected officials, and community activists as well, the experience of Buffalo may be the scenario that will be replayed in Rochester, because not only has the Cuomo administration renewed the state gambling compact first negotiated with the Senecas by the Pataki administration, but far away in Washington, the Obama administration has done nothing to overturn what the Bush administration did for the Senecas, literally in the last few hours before George W. Bush turned the White House over to Barack Obama, with a federal district court judge in Buffalo essentially shrugging his shoulders at what apparently seems to him a bipartisan done deal.

How it seems to go

Cuomo negotiated a renewal of the Seneca Gaming Compact to achieve two explicit goals: first, to get the Seneca Gaming Corporation to cough up a few hundred million dollars in due-and-owing payments to the host municipalities (and the State of New York); and second, to settle that the Senecas had exclusive casino development rights for Western New York, so that he could permit private developers to build casinos in much of the rest of the state. The new bipartisan consensus is an ugly one: Casinos in neighboring states, especially New Jersey and Connecticut, are taking hundreds of millions of dollars from gamblers domiciled in New York State because there is nowhere for them to go but far upstate to Buffalo, Salamanca, Niagara Falls, and the Oneida tribe’s casino in Verona. Therefore, the New York metro area’s gambling dollars will continue to leak out into the exchecquers of our neighbors unless we allow them to gamble here.

But in the Rochester area, sited conveniently between the Oneida casino to the east and the trio of Seneca casinos to the west, there are already two “racinos,” as the racetracks with slot machines are so cleverly named. It’s in the nature of the gambling aficionado to drift from the racetrack to the slot parlor. This has been especially true of the lower-income, less-educated, local-living casino-goer who makes up at least 85 percent of the clientele of the Seneca Niagara Casino, and possibly an even greater share of the Buffalo casino. (The Niagara numbers come from the last Seneca Gaming Corporation filing with the Securities and Exchange Commission.)

Rochester, or one of its suburbs, may be a slam-dunk for a new Seneca casino because of a critical historical difference between the Genesee Valley and the western part of the state: The Genesee Valley is unquestionably the aboriginal territory of the Senecas. Federal District Court Judge Richard Arcara found, in a 2002 decision that was upheld on appeal, that the Niagara River area, and specifically Grand Island, is unquestionably not aboriginal Seneca territory. The still-pending federal lawsuit brought by Citizens Aganst Casino Gambling in Erie County argued that the federal government was wrong to let the Senecas purchase land for an off-reservation casino after 1989, and that the Senecas are the only Native American entity in the entire history of the United States that have been allowed to operate an off-reservation casino on such “after-purchased” land.

So will they get to do it again?

Here’s the experience of Buffalo and Niagara Falls: The Senecas act, the federal government is complicit, the local politicians generally salute, then the activists jump into the fray with lawyers gnawing away for years (in Buffalo, the case has been going on since 2006) while the Seneca Gaming Corporation pulls the money in.

Treaties, competition, and chances

This time, however, a few things may be different.

First and foremost, there are alert business-owners—namely, the Off-Track Betting Association that owns the Batavia site, and Delaware North at the Finger Lakes, who understand that the Seneca Gaming Corporation is not going to bring in anybody’s customers but theirs.

Second, there are other business-owners, especially those in Henrietta, and most especially those along “restaurant row,” which is the equivalent of Sheridan Drive or Transit Road in the Buffalo area, who stand to lose substantial trade to a tax-exempt dining-drinking-entertainment site whose main tactic is to bring customers in for gambling and to keep them there until all their discretionary disposable incomes has been spent.

The town supervisor of Henrietta, or the mayor of Rochester, will have to face up to the major caveat of even the seemingly pro-casino study published by Rochester think-tank CGR in 2005, which concluded that any Rochester casino that operates on tax-exempt land, and that competes with existing restaurants and entertainment venues, would destroy the local property tax base and result in net job losses to the area. Any new economic impact study done would be able to draw upon the experience of many casino host communities in the past 20 years.

And then there’s this other reality, which may or may not have any salience with the federal Department of the Interior that has so far let the Senecas do what they like: The aboriginal territory they’re interested in hasn’t been in Seneca hands since shortly after the Revolutionary War, when the Senecas signed treaties in which they ceded their Genesee Valley lands to the United States. The Senecas may have a compact with New York State, but the rules for every other Native American nation have been clear: Nobody gets to buy off-reservation land to put up an off-reservation casino after 1989. The calendar says 2014.

This is just starting. Some community opposition has already been organized. The Senecas may already have purchased some land, and may have already made their arrangements to set up a casino in a market currently served by people who operate horseracing shops with slot machine additions. Soon, Rochester will be reading the claims about how many high-paying jobs the Senecas have created in Niagara Falls, Buffalo, and Salamanca. Soon, vendors for everything from internet service to phones to rugs to food and beverages will be lining up to get a piece of the action. Soon, politicians will be promising more money for schools, roads, and property tax breaks.

You know the words to this story. Here’s the real story, summed up in economist-speak: It’s a zero-sum game. There won’t be any net new jobs, because gambling money already goes to existing gambling sites. The Seneca casino will be tax-exempt, and more profitable thereby, so there’s lots of money to be made by whoever wants the change from for-profit to tax-exempt.

But economic development? Economic growth? As Donnie Brasco said, “Forget about it.”

Bruce Fisher is director of the the Center for Economic and Policy Studies at Buffalo State College. His recent book, Borderland: Essays from the US-Canada Divide, is available at bookstores or at www.sunypress.edu.

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