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CHITTENANGO, N.Y. — The state’s newest casino opened here on Tuesday, brimming with hundreds of slot machines, scores of smiling employees and four flying-monkey sculptures adorning a “Wizard of Oz”- — — themed gambling floor.
But the bonhomie that surrounds the opening of the Yellow Brick Road Casino belies an increasingly fractious battle between theOneida Indian Nation, which owns the Yellow Brick Road and the much larger Turning Stone Resort Casino nearby, and Wilmorite, a Rochester developer that intends to open a $425 million casino just 55 miles west of Oneida territory.
Wilmorite’s project, called Lago, is at least a year from opening, but the conflict with the Oneidas has already led to legal saber-rattling, accusations of parasitic business plans and the possibility of a casino war along the Albany-to-Buffalo spur of the New York State Thruway.
Ray Halbritter, the representative of the Oneida Nation and the chief executive of Oneida Nation Enterprises, said he always told fellow members to “conduct ourselves in ways as if there were a casino across the street.” He added, “That day is upon us.”
In a strip mall just east of Syracuse, the Yellow Brick Road Casino has more than 400 slot machines, a 500-seat bingo hall and a Cyclone of Cash (visitors try to grab $1,000 in bills while standing in an enclosed whirlwind), all intended to lock up the affections of gamblers as Wilmorite waits.
Even before the new casino’s sidewalk was painted yellow, the Oneida Nation’s expansion plans were evident elsewhere: Slot machines were installed at tribal convenience stores, and a $25 million night-life complex opened at Turning Stone. There also are plans for a $100 million shopping and entertainment complex there.
The tribe’s competitive strategy extends beyond penny slots, cocktails and affordable buffets. The Washington law firm Williams & Connollydrafted a lengthy letter in April for the Oneidas to the chairman of theState Gaming Commission, Mark D. Gearan, asking that Wilmorite be denied a license. It said a casino so close to theirs could have “a devastating effect” on the tribe.
In particular, the Oneidas say they are troubled by economic projections — made by a firm hired by Wilmorite — that Lago would siphon tens of millions of dollars from Turning Stone. They say that would mean lost jobs, diminished tax revenue to the state and a serious threat to “the shared prosperity that both the Nation and the state have worked so hard to cultivate.”
Indeed, the undercurrent to much of the Oneidas’ maneuvering so far seems to be a none-too-subtle suggestion that the state has not lived up to the tenets of the Upstate New York Gaming Economic Development Act of 2013, which allows up to seven new, nontribal casinos to be built across New York.
Gov. Andrew M. Cuomo, a Democrat, hailed the gaming act, approved by voters and lawmakers, as a way to jump-start the economy in long-suffering regions north of New York City. But it came to fruition only after an agreement the Oneidas and two other tribes made with the state, ending decades of land and legal disputes.
As part of their deal, the Oneidas, after two decades of not sharing revenue, are paying the state 25 percent of their slot revenues, in return for a 10-county exclusivity zone. The result has been a sizable windfall: Since last spring, the tribe has paid nearly $65 million to the state, which has funneled a portion of that to nearby counties.
But the Wilmorite project — located beyond the Oneidas’ exclusive zone — endangers that, said Mr. Halbritter, who questioned the state’s motives.
“They share the revenue that we’re making, so their revenue is imperiled, too, which in essence impacts the overall intentions of the agreement we made — the very carefully negotiated agreement, very painstakingly negotiated,” Mr. Halbritter said last week. “And I think what the commission did is not consistent with both the agreement and the original intent of the governor and the Legislature.”
The Gaming Commission declined to comment on Mr. Halbritter’s remarks. But Thomas Wilmot Sr., the chairman of Wilmorite, said he had been surprised by the level of annoyance his project had caused his Turning Stone counterpart.
Turning Stone
Resort Casino
NEW YORK STATE THRWY.
Chittenango
Tyre
90
Syracuse
Oneida
Yellow Brick
Road Casino
Lago site
20
CANADA
Seneca
Lake
Area of detail
NEW YORK
81
Albany
PA.
10 MILES
New York City
“When we had won the license, he made a public statement that he welcomed the competition,” Mr. Wilmot said of Mr. Halbritter in an interview last week, adding: “And we’re not in any way opposed to the Oneidas’ going forward with the Yellow Brick Road project. We think competition is a good thing.”
The Lago casino was one of three chosen in December by the state’s Gaming Facilities Location Board; the other two are in the Catskills and in Schenectady, about 100 miles to the east of Turning Stone. The state is already home to nine racetrack casinos and five casinos operated by Indian tribes.
The Oneida Nation is not the only group challenging the Lago project, which was also initially opposed by a local group, including several Amish families, in Tyre, a tiny town halfway between Syracuse and Rochester.
In March, the owners of a racetrack casino in Farmington, N.Y., about 35 miles west of Tyre, filed suit against the Gaming Commission and Wilmorite, saying Lago was unlikely to enhance economic development and would cannibalize the market in “a sparsely settled rural region already oversaturated with gaming venues.” Mr. Halbritter said the Oneidas were also considering their legal options.
Such turf battles come at a time of broader concerns in the casino industry as a whole, with revenues already down in many neighboring states and nationwide, and several casinos closing in Atlantic City last year. In New York, annual winnings at the state’s nine racetrack casinos were down for the first time for the fiscal year that ended on March 31.
Lee Park, a spokesman for the Gaming Commission, called the decline “very modest” and spoke of “the slow pace of the economic recovery, which has affected gaming nationwide.” He also cited better results in early 2015.
The Thruway is nevertheless shaping up to be the state’s gambling highway: In addition to Lago and the proposed casino in Schenectady, several racetrack casinos sit on or near the Thruway corridor, including Vernon Downs in Vernon, just south of Turning Stone.
The Seneca Nation of Indians owns three casinos in western New York, including a $130 million casino that opened in Buffalo in 2013. The nation said that it was evaluating the new competition, but that the newer casinos were entering an already saturated market. “The piece of the pie keeps getting smaller and smaller,” said Kevin Seneca, a board member of the Seneca Gaming Corporation.
Wilmorite acknowledged that a large chunk of its potential business at Lago would come from existing in-state competitors. According to an analysis TMG Consulting did for the company, Lago can anticipate drawing about $54.2 million from the racetrack casinos in its first full year of operation and $78.5 million from tribal casinos. That amounts to an estimated 51 percent of Lago’s projected earnings.
But Mr. Wilmot said he anticipated that he would “expand the market very substantially.” Moreover, he noted that Mr. Halbritter and Turning Stone, which opened in 1993, only recently began to pay the state a percentage of the casino’s slot winnings. “He’s basically had a monopoly and not had to pay any gaming taxes,” Mr. Wilmot said. “So he’s had a very good run for a long time.”
Mr. Halbritter did not dispute the Oneidas’ success but said, “We created this opportunity from Day 1,” transforming a dirt-poor group into one that earns an estimated $250 million to $350 million a year at Turning Stone.
And he does not necessarily appreciate someone else trying to take advantage of that, he said.
“If I went to Wilmot and said, ‘I’m going to take from your existing business, that’s my business plan, my business plan isn’t to create anything new, my business plan is simply to go after your business and take money out of your pocket and your community,’ ” Mr. Halbritter said, “I mean, what would be the response?”
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