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Five years ago Tuesday, the racino at Monticello Raceway opened with as much flair as the rainbow-colored fountains that flowed in the track’s Borscht Belt heyday.
The throngs who ran to the beeping slot machines represented 40 years of Catskill gambling dreams come true, said supporters. The racino was the first step towards the full-fledged savior, a casino.
The protestors standing outside said the place that touts itself as "a little Vegas in your backyard" would be the first step on Sullivan County’s road to ruin. It would clog roads and tempt problem gamblers.
Today, Monticello Gaming & Raceway is neither savior nor devil. It’s a business fighting for survival.
Its daily take per slot is the lowest of New York’s eight racinos — the second-lowest of all 42 casinos and racinos in the Northeast, according to the most recent Gaming Industry Observer’s East Coast Slot Report. Attendance continues to plummet, down 11 percent from last year.
It owes creditors $72 million, with $65 million due by the end of next month.
It does not have the money.
"We do not presently have a source of repayment … and our operations will not provide sufficient cash flow to repay these obligations," says its most recent government filing. It is, however, actively seeking solutions, including new financing.
The factors that were supposed to guarantee the racino’s success in 2004 — proximity to the metropolitan area and the Poconos — are now cited as reasons for its decline, with the Yonkers racino and Poconos casinos taking huge chunks of the Monticello market.
Five years after it opened, the racino at Monticello Raceway — under new management this month — is at a crossroads.
It’s gambling on a couple of shots in the arm to survive:
A new racino, Entertainment City at the old Concord resort, owned by its parent company, Empire Resorts.
Video table games, to be installed at all New York racinos, including Yonkers and a future racino at Aqueduct.
At stake isn’t just Sullivan’s decades-long gambling dream.
The racino employs some 300 workers in a county with one of the state’s highest unemployment rates.
It also pays some $1.7 million per year to three municipalities: Monticello, the Town of Thompson and Sullivan County.
"It’s just extremely important to us all," says Thompson Supervisor Tony Cellini.
Hanging in the balance Indian gambling
Scenario A: The Obama Administration reverses policies on off-reservation gambling, opening the door for a St. Regis Mohawk casino on land next to the Monticello Gaming & Raceway. Interior Secretary Ken Salazar must withdraw a directive from his predecessor, Dirk Kempthorne, which established a distance test that any off-reservation casino must be within commutable distance of the reservation for tribal members, a move that squashed the Mohawk plan.
Scenario B: Salazar does not reverse policies because of political opposition to from competing gaming interests, gambling opponents and environmentalists. The Obama Administration comes to the same conclusion as the Bush Administration: that by approving three casinos in the Catskills, it establishes a precedent and leads to the possibility of an expansion of Indian casinos around every major metropolitan area in the United States.
Odds: Casinos supporters say they’re hopeful because the Democrats hold Congress and the presidency. Sen. Chuck Schumer said last week that he has spoken to the new head of the Bureau of Indian Affairs, Larry Echohawk, and was told Interior is looking seriously at reversing Kempthorne’s decisions. The Mohawks also argue that they are a special case in that their project received state and partial federal approval before Kempthorne’s policy change.