Business

Horn: New York state should have folded on new casino project

As Turning Stone Casino goes all in with the announcement of 300 new hires, the embattled Oneida Indian Nation (OIN) preps for a high-stakes game with a rival that could unravel stability in the region.

The Oneida Indian Nation plans to carry out the full-time hires over the course of the next three months to supplement Turning Stone’s nearly 4,500 existing employees in Verona, New York. The move comes as a response to an uptake of business for the casino as it prepares to open a new retail wing. But a larger showdown being played out with the state threatens to jeopardize the prosperity of the casino as well as its employees.

The OIN has been fighting off the state’s repeated attempts since 2013 to establish a new casino just outside the exclusivity zone granted to the Nation. But with a $50 million licensing fee paid to the state and the ongoing construction of the del Lago Resort & Casino, it seems that the conclusion of the Oneida gambling monopoly in the region is imminent.

Whether the state is merely trying to hurt the Nation in an attempt to boost its share of the taxes or actually create another productive business in the area is unknown. And while there is no problem in breaking the OIN’s chokehold on gambling in the central New York region, the inevitable juggling of jobs and revenue between the two businesses will have little to no positive effects due to the inability to create a more competitive market.

The feud between the Nation and the state started when Gov. Andrew Cuomo asked the OIN and other Native American groups to share their revenue with the state economy in 2013, contrary to a deal made in 1993 with former Gov. Mario Cuomo. Though the initial agreement was a good move at the time, it has aged poorly and New York should play the hand it’s been dealt rather than trying to alter the past to avoid seeming spiteful and harming future business ventures.

The most recent lawsuit filed by the OIN to stop the del Lago casino claims that the selection process that the New York State Gambling Commission used to select the construction site was subjective. Though this lawsuit will likely be thrown out, as the previous six against the project have, it’s merely a stall tactic to bleed more time and money out of del Lago and the state.

If a business wants to come along and challenge the Oneida’s monopoly on the region, they are welcome to try to compete with the more than favorable conditions the OIN receives. In fact, it would help the region considerably if some of the revenue generated by the casino was distributed into public funds.

But it is not in the state’s best interest to give the impression that it is backing efforts against the OIN considering the venture will create no additional revenue and little increase in jobs.

Peter Howe, an assistant professor of economics in the Maxwell School of Citizenship and Public Affairs at Syracuse University, cited one of the many problems that creating a new casino in the region poses.

“There’s a limit to the amount of entertainment a person needs,” said Howe. “Putting more casinos in the area will not somehow give people more money to spend at casinos.”

Creating a new casino will overlap significantly with the jobs and service already provided by Turning Stone. It’s likely that the massive casino, which has existed in the market for decades, will win out and eliminate the other from the game. But in the process, many jobs may be recycled within the region only to be lost later to help drive profit.

“Yes, I feel there will be significant crossover of jobs between the two casinos, especially on the specialized floor jobs,” said Howe. “I think there’s going to be a lot of back and forth, which probably won’t help the workers or the local economy.”

The setup of a new casino would arguably destabilize the OIN monopoly and allow other casinos to expand into the region to create more business. But because the market and jobs that already exist in the region will just be divided up among two players instead of one with no guarantee of success, this runs into a problem of oversaturation.

Surely New York, though justified in desiring that the Nation shares revenue, has more prudent investment strategies than ones based on vindication.

Theo Horn is a sophomore political science and public policy dual major. His column appears weekly. He can be reached at tahorn@syr.edu.

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