Park Place Partners With Native American Tribe To Pursue Catskills Gaming

MONTICELLO, NY? The effort to revitalize resorts in NY?s Catskill Mountains recently got a big push forward with the news by Park Place Entertainment that it has signed an option to buy Kutsher?s Country Club, to create a 1,400-acre entertainment complex and gambling casino that would be owned by the St. Regis Mohawks tribe. ?Casinos are definitely a factor, but they?re not the only factor,? in attracting business conventions, said Herb Clark, acting president of the Sullivan County Visitors Association and CVB. Gaming would definitely help with convention and meeting sales, he added. ?They usually look for casinos and golf. If we had a casino, we?d have both.? An earlier proposal by the same tribe for a $500-million casino, but no hotel, located adjacent to the Monticello Racetrack, took four years to get approved by the federal government, but died when the Mohawks switched management companies. The new plan, launched in April, reportedly has some business people skeptical over its real purpose, in that it might represent a deliberate stall for gaming to compete with Atlantic City. About 30% of Park Place Entertainment?s cash flow comes from its three casinos in Atlantic City, according to Jason Ader, an investment analyst with Bear, Stearns & Co. For now, the situation seems a little murky as to what affect Catskills development would have on the established Atlantic City, where gaming has been legal since 1978. Which is a better investment, Atlantic City or the Catskills? ?It?s a hard question to answer, because we don?t know all of the terms, and it depends upon what you?re investing in, say, a stock that owns assets in Atlantic City? Ader told HOTEL BUSINESS?. ?The market dynamics are very exciting in the Catskills. It?s close to New York City, there is no competing gaming, and it has a good infrastructure for transportation,? Ader said. ?Atlantic City is a mature market, but one that is growing this year due to the strong economy in the Northeast,? he added. The deal that Park Place now has with the Mohawks and Kutsher?s provides a low cash outlay with a potentially substantial reward, if that property opens and they run it, Ader continued. ?And at the same time they have discouraged competition in Atlantic City.? MGM has two of the most significant sites for future development, Ader pointed out. ?You?ve got to wonder how committed they will be to Atlantic City, with gaming in New York that much more of a reality. Las Vegas executives are wondering too if Atlantic City is as good an investment as it was.? The Mohawks? original Catskills plan would have relied on existing rooms in the area, a scenic three-county section of New York State starting about 90 miles north of Manhattan and about an hour?s drive from Albany, the state capital. This plan was a deal between the St. Regis Mohawks tribe and Monticello-based Catskill Development. After four years in the approval process, this proposal was killed in April when members of the tribal council sought a new sponsor, Park Place Entertainment, and reached a deal to locate the casino at Kutsher?s Country Club on Anawana Lake near here instead. The Mohawks also own a struggling casino in Hogansburg, NY, far upstate on the Canadian border, and there is another Native American gambling operation, Turningstone, run by the Oneida tribe near Syracuse, within New York State. Two other casinos run by Native American tribes are in nearby Connecticut: Foxwoods, and Mohegan Sun. Matt Rose, speaking for Park Place Entertainment through a public relations firm, said the first proposal is now dead. Besides, he said, it had not received the final sign-off. Asked if he thought filing a new plan would delay the arrival of gaming in the Catskill Mountains, Rose said ?We don?t think so. Park Place has a long history and we think approval will be far quicker than the other company experienced. They [Park Place] are talking 18-24 months from the day they have approval to the day they open t

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