Odds On Racing - Harness Racing

New York proposing New Racino

March 31, 2008

Still in the earliest of stages, a proposed $108 million motor speedway and resort in the town of Brasher, New York has drawn at least one critic of the gaming aspect to the plan: the St. Regis Mohawk Tribe.

Northway Island Associates, the Utica developer behind the project, plans to include a harness racing track in the complex. The track also will have video lottery terminals, which are now found at eight so-called racinos around the state, including Saratoga Gaming & Raceway, Saratoga Springs, and Finger Lakes Gaming & Raceway in Ontario County.

"A VLT operation in St. Lawrence County will not work," said James W. Ransom, one of three chiefs who sit on the St. Regis Mohawk Tribal Council in Hogansburg.
The terminals are simply a way the state came up with to bail out the struggling harness racing industry, Ransom said.

"And why would anyone build a harness racing track in this day and age, given the financial troubles with others in the state?" he said.

Mr. Ransom also questioned whether the region, given its mostly rural population, could support harness racing.

"To even have the idea of building a track just so you can have VLTs , we just don't think it's a good business decision," he said.

The harness track and VLTs are only one aspect of the concept, which includes hotels, a three-quarter-mile oval raceway, a quarter-mile drag strip, an entertainment and event center and an 18-hole golf course, Northway Island Chief Executive Officer Jerry M. Colachino said.

"There are a whole number of things involved that all support one another," he said. "I'm not sure they understand our business plan."

The developers never really wanted VLTs in the first place, using them as a fallback option when the tribe rejected Northway Island's suggestion last year that the tribe move its successful Akwesasne Mohawk Casino into the project, Mr. Ransom said.

"We unequivocally turned down the request," he said.

Mr. Colachino confirmed making such a request but only as one option being considered during planning for the complex.

"We were interested in doing some sort of venture with them," he said.

Brasher Town Supervisor M. James Dawson Jr., while participating in a meeting Thursday of the North Country Redevelopment Task Force, mentioned Northway Island's suggestion. He said Northway Island offered to sell to the federal government for a nominal fee a portion of the 1,200 acres of land on which the project will sit. That would allow the land to be put in a land trust for the St. Regis Mohawks, which would allow the tribe to move its casino to the property.

The federal government recently recommended putting 13,000 acres owned by the Oneida Tribe into trust; that land includes the tribe's casino, hotels, golf courses, tribal residences and ancillary businesses.

"The casino seems to be a focal point of their income stream," Mr. Dawson told task force members about the developers' plans.

Mr. Colachino said Friday that placing part of the property into trust to provide the complex with any sort of tax benefits was never a consideration.

"We just looked at the type of gaming we could offer," he said. "We didn't explore any other types of benefits."

Land placed in trust for tribes is considered sovereign land and is exempt from state and local taxes.

Without involvement from a tribe, the type of Class III gaming that allows slot machines would be illegal in the complex. Under state law, only Class II gaming, such as the video lottery terminals, would be permitted.

St. Regis Mohawk officials doubt a racino in the project would benefit their casino, as some proponents have suggested, by making the area a destination where tourists would come to stay and spend their money.

"We believe that we've established the Akwesasne Mohawk Casino as the premier gaming establishment for the region," Mr. Ransom said.

Should the developers find some way to build any sort of gaming facility that includes slot machines, tribal officials would consider that a breach of the 2004 compact with the state that allows the Akwesasne Mohawk Casino to operate.

That compact includes a revenue-sharing agreement under which the state receives 18 percent of the money earned by the casino's slot machines each year during the first four years, then 22 percent beginning in April 2009 and 25 percent beginning in April 2010.

St. Lawrence and Franklin counties split 25 percent of the state's money. St. Lawrence County then splits its share with the towns of Massena and Brasher and Franklin County splits its share with the towns of Bombay and Fort Covington.

The state, counties and local communities would lose millions of dollars in annual revenue — the projected share this year was approximately $11.3 million — should the compact be violated.

"We feel we need to be upfront," Mr. Ransom said. "If anyone has a desire to bring slot machines there, this is one of the consequences."

Before any of that happens, though, the project will face a series of regulatory hurdles.

The developers will need a license from the state Racing and Wagering Board to build and operate a harness racing track, then get a license from the state Division of the Lottery before being able to install VLTs.

Neither of those entities has been approached about the project, spokesmen for both said.

According to state law, however, a VLT license can be issued only to racetracks "located in a county or counties in which video lottery gaming has been authorized pursuant to local law." St. Lawrence County has no such law.