HOW THE SENECA NATION WAS GRANTED RIGHTS OVER AMERICANS IN NIAGARA FALLS  

By Frank Parlato Jr.

INDIAN GIVERS

One of the precocious, American ventures of the late 20th and early 21st centuries was to give to small foreign nations, called “Native Americans,” a preference over Americans.
NY Governor George E. Pataki, for instance, gave to a tiny, foreign nation, of approximately 7,300, the Seneca Nation of Indians, their own, brand new country in what was formerly a part of downtown Niagara Falls, NY.
He did it as a gamble -- casino-style.

A LITTLE HISTORY

As most citizens know, modern casino gambling was legalized first in Nevada -- in 1931. With a forty-five year jump on the competition, and the help of organized crime, they built in the Mojave Desert a city called Las Vegas. 
Millions of middle-income people came to see the Mafia run high-class casinos, and enjoy losing money which, in most instances, they could afford to lose. With prostitution, free alcohol, accessible drugs, cheap, but lavish food, and glitzy entertainment, with the ring- ting glamour of fame, and millions milling, pretending to be “big-time” players, Vegas was a spectacle of mankind-- under moonlight, people living without cause and effect.
In 1976, Atlantic City, an obsolescent, resort town cum slum by the sea, added casinos, hoping to create “Vegas-By-The–Sea.” Within a few years, 40% of locally owned, but shabbily inglorious restaurants closed, displaced by glamorous casino eateries owned by corporate giants; one-third of the city's local retail businesses closed; people who went to casinos, they learned, don’t leave to shop.

Although the casinos created thousands of low-wage jobs, it did not invigorate the people, and net jobs were less, not more. Unemployment became the highest in New Jersey. Businesses left or closed; crime tripled. The population dropped by one-fourth.
Happily, the state of New Jersey generated millions from taxes, and, most of it was spent in other parts of the state. What money they got from gambling in Atlantic City was spent on rising social costs. After forty years, Atlantic City is a slum by the sea with casinos.
Next came Deadwood, SD.- a 19th century miners’ camp, sprung up after Custer announced there was gold in the Black Hills. Wild Bill Hickok came and died there. Calamity Jane was buried here. Its day passed in the 19th century, and, in the 20th, Deadwood became the largest historic preservation project in the country. With hills and history, elected officials in Bismarck imagined Deadwood could become “Vegas-of-the-Mid-West.”  When gambling was legalized at “high noon,” 9/1/89, the population was 2000, about what it was when Wyatt Earp marshaled here. The new, $170 million casino soon eclipsed the town, and, while it brought two million visitors annually, and tax revenue for the use of elected officials, the casino cannibalized jobs, and, in effect, history, too. Deadwood became a gaming town, wild and predatory like it was in frontier times, even with crime like they had in olden days. But the population of Deadwood dropped from 2000 to under 1400.

Seneca Niagara Casino, once part of the USA, was the Convention Center for Niagara Falls.

People who remember their past lives are apologizing for what they did to the Seneca back in 1794. "We people in Niagara Falls really cheated the Indians", says one person referring to his past life in 1827. "It's about time we did something to make it up to them."

DEBATE IS SPARKED WHILE GAMBLING DEPRECATED

Seeing “easy” money from taxes, others joined in, and casinos sprung up in 20 other states. Where the instinct of the people was puritan, the leaders resorted to circuitous methods. In NY, for instance, gaming is banned by constitution. NY’s Gov., the Honorable George Pataki found that, while he wanted gambling for his people, he couldn’t get support to amend the constitution.
“Gambling is predicated on the losses of others; it portends something for nothing,” one assemblymen said. And an erstwhile Senator chimed, “It encourages crime; propinquity leads to addiction, bankruptcy, family violence, embezzlement, alcoholism, suicide.”
The Gov. Pataki rebutted, “gambling is a voluntary tax. The absence of it in NY encourages people to gamble in other states or Canada where casinos thrive.”
State senators and Assemblymen said “no” to the governor Pataki. Not because of Puritanism; the fact that without a casino nearby, some people won’t go to other states, they just won’t gamble, and not because studies showed that 22% divorced, 40% lost jobs, 49% stole, 23% were alcoholic, 20% attempted suicide --because of gambling addiction. That was not the reason.

TRUMP AND OTHER ALTRUISTS SAVE NY

The vote to amend the NY constitution and allow New Yorkers to legalize and control gambling’s tax profits failed because of opposition to the Republican Pataki by erstwhile Democrat lawmakers in the assembly and senate. The amendment also failed because contributions were made to certain NY lawmakers (both Republican and Democrat) by, curiously, out of state casino owners. Led by the intrepidly pompously erstwhile casino owner, cum character actor, Donald Trump, casino owners in Atlantic City employed NY lobbyists with cash in hand to legally bribe/persuade lawmakers to vote against legalizing casinos in NY.
Gambling, they said, is “a tawdry, sleazy business.” And they were right. But gambling is when everything is left to chance. And, by chance, the lawmakers, some of whom voted for gambling’s legalization before, “mysteriously” voted against it. Politics is a tawdry, sleazy business.

UNLIKE CUSTER PATAKI FIGHTS FOR INDIANS

Not being able to make gambling legal, The Governor, G. Pataki, a gambler himself, gave a piece of downtown Niagara Falls to a foreign country where – since they make their own laws- New Yorkers could gamble - constitution or not. Believers in chance are notoriously frivolous, as the history of civilizations shows those who have studied even a fragmentary portion of it. The glamour of gaming, its golden allure, as entertainment, as pulsating, titillating excitement, as the lure of, if merely, the tinsel puff of name and fame, of potential instant wealth, of the glory and the power of a man to risk it all on one pitch and toss, this is the intangible. The hon. Pataki dealt in intangibles: He pitched.

    A Global First:

    Niagara Falls, NY:

    The only place in the world where
    they get 17 million tourists
    annually and are broke.

And then one sunny Solstice day, Pataki came to town to announce that he would toss to one of the tiniest, foreign nations in the world, called “Seneca” US land to make their own country with which to build a gambling casino in what was once Niagara Falls.
No fact in your life will ever equal your imagination of it.  This much his honor, the honorable G. E. Pataki knew.

STUDIES MY EYES

Beside the fact that land ceded to a foreign nation is removed from tax rolls and money which would have been spent on items that generate sales tax are, in a newly-created foreign nation, tax-free, there are other costs associated with gambling.
As studies of Ledyard, Detroit, Council Bluffs, and other venues suggested, when casinos open, within a fifty-mile radius, pathological gambling doubles; the bankruptcy rate goes up by 14 percent; crime rate goes up by 8 percent, including embezzlement and fraud. And for every job a casino creates, one or more jobs are lost.
For instance, the Wisconsin Policy Research Institute studied 17 Native American casinos to determine the cost to society of casino customers who gambled more than they could afford to lose. In one year, Wisconsin netted $326 million in tax revenue from casinos. The estimates of financial costs to the state and its people from problems directly associated with “gambling addiction” were calculated from low to high by various so-called experts. The lowest estimate calculating the cost of crime, bankruptcy, divorce, alcoholism, welfare, job loss, child abuse, fraud, etc. -directly related to gambling at these casinos was $166 million (which cut the $326 million profit in half).  Mid-range estimates were $320 million (which meant profits were zero). High estimates were $350 million (which meant that the people collectively [society] lost money by having casinos). However, the point is that not all people lost money; the $326 million in taxes went into few official’s control, while the (social) costs were spread out, were hard to quantify, and were paid by many. Almost analogous to the way a casino operates with its customers.
Besides social costs, studies also indicated that casinos draw dollars from other businesses. There is a fixed amount of money people have to spend for entertainment. If they spend it gambling, they do not at theaters, for instance. Sometimes if they spend too much – and the seductive nature of gambling is such that, unlike a theater, or a sporting event, sometimes people spend more than they planned. Then it comes out of groceries, or rent. In New Mexico, casino gambling brought decreased revenues in 12 of 16 areas of business studied. In Council Bluffs, Iowa, grocery stores lost 15 percent of their food sales after a casino opened. 
The leader Pataki, informed as no man on the subject, said. “While others study economics, we’ll study the dice!”
And Pataki proved a man by his actions.
His critics said, unkindly, “A true gambler is a man who puts his own ‘ass’ on the table. Mr. Pataki’s gamble is based on others’ money.”

There are four separate governments in and around Niagara Falls. Three profit enormously while one, Niagara Falls, NY is dead broke.

PATAKI PUTS SOMETHING ON THE TABLE

In 2002, NY’s governor, the honorable George Elmer Pataki, who, coincidentally happened to be running for reelection that year, put Niagara Falls resident’s ‘asses’ on the table, and negotiated with a tiny foreign nation -to remove 55 acres in downtown Niagara Falls  - which included its convention center – from the USA.

The good Pataki extracted from the tiny nation an agreement for them to pay 25% of their future slot machine revenue to NY. (a brand new fund in Albany was set up and controlled by the honorable Pataki) and 25% of that fund would go to Niagara Falls.
Slot machines generate 75- 80% of a casino's gross revenues.  

By the terms of this taking, called a “compact,” the land went off NY State and local tax rolls, and became exempt from NY employment, and U.S. discrimination laws.
The Seneca had only to pay on slots, and were not prohibited from starting any other kind of business- all of which would be completely tax free.
At the time, local officials were blissfully ignorant. 
Niagara Falls Councilman Charles Walker (D) said, “Nobody knew what (Pataki) was doing. We were told (the taking) was going to be the convention center, then it came out it was 55 acres.”
Mayor Vince Anello (D) said, “They told us (the taking was) going to be a fine thing for Niagara Falls. Everything is not fine.”

SENECA- MALAYSIA CASINO

Seneca opened its casino in 2002, after an alleged $80 million investment – most of which was, it was reported, loaned from investors- led by billionaire Lim Kok Thay, of another foreign country, Malaysia, at 29% interest, which, along with other terms of the loan, made Malaysian investors, not the Seneca Nation, de-facto management of the casino.
American apologists for Custer, or more successful men of his ilk, felt gladdened that at last we were doing something for the Indian. Indians proud of their heritage were gladdened their young braves could contemplate  life careers as black jack dealers.

With 82,000 square feet of gaming, 2,595 slot machines, 91 table games, the “Seneca Niagara Casino” opened on December 31, 2002, and never closed. Not one hour, 24 hours daily, 365 days of the year. The casino was housed in what was formerly the city’s only convention center, where out of town people convened, and then went to hotels and restaurants and spent money. Three years of conventions were cancelled.

A WIENER FOR A HAM

They call it crisscross, though critics called it double.
The convention center, which brought in millions annually from tourists to local businesses, and millions more in tax revenue to Albany - became a foreign nation casino.
Ironically, the tourists – such as those who came to the convention center -hardly came to the new casino. The gamblers at the Seneca -Niagara Casino were mainly middle and low-income residents of Western NY.
The Convention Center had made money for locals from out of town people.
The Foreign Casino (which displaced it) made money for out of town people from locals.
Crisscross. Or was that double?

THE GRIND

At the Casino, they call it “the grind.”
“The grind” is where you take from a large number of small- time gamblers $50-100 at a clip. Occasionally, the “gamblers” come in smiling, these shabbily dressed, unglamorously inelegant, often unshaved, sometimes unwashed, unkempt, always sans suit and tie – some call them “yahoos.”  
Unsophisticated, grotesquely unlearned, pursed lips and pouting- you could scan the whole place and find not anyone smiling, especially at egress points; four million of them  a year, on average $85 dollars poorer, these who know nothing of the laws of probability. Without clocks, without windows, to hide the passage of time, and slot machines programmed for near misses, casinos love to cheat- em. But they were here to unburden karma, to lose a little which to them is a lot. A player loses a million and smiles. A bumpkin loses $50 and blames the gods, and curses his girlfriend. But that’s who they got at Seneca Niagara: Mr Shabby. They call it the (bumpkin) grind.

LIKE OLIVER TWIST, SENECA WANTS MORE

Seneca wanted more than four million pin heads doffing $85.
Seneca opened a buffet, then a pub, a “high- end” steak and seafood house, an Italian restaurant, an Asian restaurant, a glamour spa, a 26 story, 604 room hotel, and gift shops galore. Even one with the Seneca logo on every item.
Seneca, the ancient bone rolling gambler.
Now they were making a million a day.
How do they do it, these Seneca gods? the locals asked.
In Niagara Falls, to put it in proportion, the library system was in danger of closing,  because of a two million annual shortfall; Seneca was taking out of the peoples of the Falls and nearby Buffalo in 48 hours—two million.
That which the people of NY could not have, gaming- Seneca had.
And when Seneca opened other businesses, Seneca did it without paying property taxes, bed taxes, sales taxes, income tax.
It was great for Malayasia, Pataki said.

MONEY, MONEY EVERYWHERE BUT NOT A BUMPER TO DRINK

Although inelegant, the grind was good for Americans too, Seneca said.
2,000 jobs- they said- were created- most for people living in the USA.
Only 300 top jobs were reserved for the Seneca. Every low job, without fail, was given to Americans. The majority of these were minimum wage, many were part time.
But this is true of all casino jobs, as they are for convenience stores, or MacDonald’s.
But this Pataki grind was not without reward. The state got 40 million the first year. More, the next. Albany, with a $10 billion deficit, didn’t have a history of sound financial management. But know ye this: his honor, George Elmer Pataki made good use of casino revenue; there isn’t room to list all the things George Elmer accomplished in Albany with that money, but a number of top quality people (who came with glowing, personal recommendations from Pataki, or friends of Pataki) were hired for newly created and choice public service/patronage jobs.
At the municipal end of the stick, the first year went well. The Seneca/ Malaysians got $300 million, Niagara Falls got $9 million. They needed it too. Crime was up 18%. Bankruptcies set an all time record.  But the next year, Republicans in Albany stepped in: why should the Falls, whose elected officials are mostly Democrats get 9 million?
“The city doesn’t have a history of sound financial management,” Albany Republicans said.
The millions from the casino, which were to be spent developing Niagara Falls, NY, -- the only tourist town in the world which was broke - got “held up” as Republicans held and Democrats fought for control of casino money.  2005 came and went without 2004’s casino money going to Niagara Falls.
Meanwhile, two hotels were foreclosed, its former owner said, because of the loss of conventions business. Locals who used to frequent restaurants dined now at Seneca where tax- free food got them more for less. At local taverns, they lost customers both from NY smoking bans -- at Seneca you can smoke where you will - and because Seneca gives free drinks on the gambling floor.

CLEVER AND CLEVERER

At Seneca-Niagara Casino, there are 3,200 reel-spinning and video slot machines , with progressive jackpots. There are nearly 100 tables, including Blackjack ,Craps , and Roulette.. You can play “world-class” Poker in their Poker room . Or visit the Blue Heron Room- for “high-stakes, table games.”
Seneca pays only on slots. Everything else is theirs: The Logo Shop, the Eight Clans Gift Shop, the Player’s Club Store. Sweatshirts, baseball caps, T-shirts, sweaters, jackets, golf wear, costume jewelry, plush toys, jewelry, blankets, sculptures, TVs, high-end electronics, DVDs, golf clubs, cameras, diamonds -- all tax free, and lower in cost, since Seneca occupies land where they pay no property tax, no income tax, no sales tax.
The Seneca stores compete with US stores selling the same items.
And then there’s the new Seneca Niagara Hotel, all 26 levels, the largest hotel in Western NY, with deluxe rooms with pillow-top beds, oversized showers and flat screen TVs, indoor/outdoor pool, steam rooms, whirlpools, a state-of-the-art fitness center --all tax free. You’d have pillow top bed too, if you paid no taxes. You could lend money to Malaysia. You could open a smoke shop, which is coming next, and, after cheating people with roulette, you could sell them lung cancer.
New restaurants, new retail stores, new full-service spa and 1,000 new slot machines, and 50 more table games! From Club 101 – right in the middle of the Casino floor – to the intimate Bear’s Den Showroom and the spacious Seneca Events Center, there’s something to make every rube agog. And help put locals out of business.

STUDIES PAID BY PATAKI EXONERATE PATAKI

Studies made by so-called experts embarrassed the noble Pataki. For every $1 in taxes Seneca gambling contributed to the local economy, $6 was lost by lost sales taxes,  property taxes, businesses going out of business, and costs of social welfare, and criminal justice expenses.

    NATION BUILDER

    NY Governor George Pataki
    "gaveth away the store" to a
    small foreign, but now very
    rich country named Seneca

Local businesses lost, since people dropped money into the casino instead of spending it on new apartments, cars, refrigerators.
But these studies were flawed, the knowledgeable Pataki said. That governor, Pataki, and his agency, the USA Niagara, did a “scientific” study. The study’s director, the estimable Mr. Kent Gardner called around and said “not one of several businesses I spoke to reported a loss because of the casino.
“No one said they lost business,” Gardner said. “They just didn't gain any.”
But the ice skating rink on Lackey Plaza was gone. The Convention center was gone. Three hotels were gone. Several restaurants gone.  Gardner couldn’t call them. They were gone.

SPIN OFF

The Seneca Nation also issued a “report”, which president Barry Snyder said proved casinos have a “positive impact on (US) economy.”
The Seneca casino generated $100 million in revenue to New York State, to be spent by officials directed by the Governor Mr. G. Elmer Pataki, and $72 million was paid in payroll to Americans during 2004. At the same time, $300 million in gambling losses came out of the pockets of local residents.  Locals gambled with money which would have been spent at restaurants and theaters. They gambled with grocery and rent money. And as much as $100 million in sales tax was lost. It was voluntary taxation at its best.
And then there was “spin-off.” The Seneca Niagara hotel construction was “visible spinoff,” Seneca reported.
Critics viciously said, “this ‘spinoff’ simply spins the Falls’ hospitality industry from hotels that are in the USA off to a (non tax-paying) hotel on Indian territory.”
Another spin-off is the attempt to take, by eminent domain, the Splash Park out of the USA.  Pataki people, assisting Seneca, are trying to seize, by condemnation, the Splash Park - where its US owners pay taxes -to give it to Seneca for more tax -free casinos and hotels.
That remarkable George E. Pataki, hopefully with an eye on posterity, has made history: it was the first time that state government in the USA attempted to take- by eminent domain - a property owned by Americans --to give to a foreign nation.
Consider all this spin-off, ye who contemplate a casino in Buffalo.
A weak poker hand, an unmatched trio of slot-machine symbols, and a lousy pair of blackjack cards, is the new truth in advertising logo for the Seneca/Malaysian/ Pataki/Buffalo Casino.

Contact Frank Parlato Jr.