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Dec 23, 2014 11:10 AMPublication: The Southampton Press

Shinnecocks May Turn To Florida Tribe For Casino Help

Dec 23, 2014 11:10 AM

The Shinnecock Indian Nation’s leadership has been in talks with the Seminole Tribe of Florida about a partnership that might help get its shelved casino development efforts jump-started, several tribe members have said.

The conversations with the Seminoles, who operate seven casinos in Florida and own casino development and management company Hard Rock International, started not long after the tribe’s longtime partner Gateway Casino Resorts halted its $250,000 monthly payments and towering legal support to the Shinnecocks.

Tribe members—who have uniformly spoken only on condition of anonymity, because of an edict from tribal leadership to all members not to talk with the media—say they have been told that members of the tribe’s Council of Trustees are working on an agreement with the Seminoles. The tribe’s members have not been given any details of the talks, other than that they involve the future of Shinnecock gaming—which has raised concerns among some in the tribe, because of controversies that swirled up around past secret negotiations with would-be casino partners.

“They’ve told us they’re about to do a deal with the Seminoles … but there hasn’t been any information about it,” one tribe member said. “It’s same as before—they work things out before they bring them to the tribe, and then we’re asked to vote to approve things that most of us don’t understand.”

The tribal Council of Trustees has repeatedly refused to talk with The Press about tribal business and did not respond to a request for comment on Tuesday morning.

Earlier this month, tribe members voted to approve the creation of a tribal corporation, Shinnecock Sovereign Holdings Inc., which could bring a number of future tribal corporations under its tax-exempt umbrella. The company was formed under Section 17 of the federal Indian Reorganization Act, which allows tribes to form corporate offshoots that benefit from the sovereign status of the tribe but are legally separate. The creation of such a corporation is a common, essentially necessary move for most tribes and is not necessarily connected to the casino effort.

The tribe has had a tumultuous history in its casino development efforts. Changes in the makeup of the former three-member Tribal Trustees, through the tribe’s former annual elections, led to rocky relations with past partner Gateway. Disagreements about contracts, which some of the leadership saw as too favorable to non-native partners, and revelations about unannounced agreements signed with Gateway fueled an internal battle that ultimately led to accusations of collusion and the much-disputed ouster of four tribal leaders, including two of the three sitting Tribal Trustees at the time—leaving the tribe, for a time, under the unilateral governance of a single Trustee.

Amid the internecine struggling, the contracts with Gateway and its principal, Michael J. Malik, foundered, and in late 2012 the partnership stalled with the halting of payments to the tribe, which had paid the salaries of more than two dozen tribal employees. It had been reported that Gateway has invested some $50 million in the Shinnecocks’ casino effort since purchasing the right to the partnership in 2003 from the tribe’s original development partner, Ivy K. Ong.

In October, the tribe voted to disband its Gaming Authority, the five-member commission that had been empaneled to handle negotiations with non-native casino partners and oversee the casino effort. The vote followed the revelation last year of an FBI investigation into the Gaming Authority and some of its members. Just weeks after a dozen FBI agents swarmed onto the Shinnecock Reservation and pored over documents in the Gaming Authority offices and the home of one authority member, the Gaming Authority’s offices were destroyed in what investigators say was an intentionally set fire. There have been no arrests or other charges filed in relation to the FBI investigation or the arson.

What will become of the latent agreements the tribe has signed with Gateway remains unclear, as does what path to gaming the Seminoles might lead the Shinnecocks down.

“Nobody really knows much about what is going on up there—they get very little information,” said one tribe member who lives off the reservation and is therefore precluded from voting on tribal business. “They’re told very little with regard to the details of anything. Nothing is explained clearly. [They are] just given something to vote on, and most people are only going by what they’ve heard, just around.”

Most of the Seminole casino operations now are Class III facilities, which means they are full-service casinos that include high-stakes table games like blackjack and craps, as well as slot machines. But the tribe is known in Indian country for having built a mini gaming empire via a network of Class II facilities, which focus on bingo, keno machines, pull-tab games and card games like poker in which the house does not post a bank.

In 2006, the Seminoles purchased Hard Rock International, the company that owns the Hard Rock Cafe hotel, casino and restaurant franchise, for nearly $1 billion. Since then, they have entered into partnerships with other Native American tribes to manage gaming facilities or to lead the other tribes’ efforts to develop casinos.

Typically, development contracts between a tribe and an outside partner call for the partner to shoulder the financial burden of legal, planning and construction costs for the casino, and then oversee its management, in exchange for a percentage of the casino revenues over a period of several years.

In the early days of the Shinnecock casino push, a market study conducted by Mr. Ong showed that a casino on Long Island could potentially reach $1 billion in annual profits within 10 years of opening.

In the years since the Shinnecocks’ venture came to light, there have been factions within the tribe who have argued that the tribe should start with a small casino operation, almost immediately, to begin generating revenue while it works on its plans for a larger Vegas-style casino and hotel development.

That approach split with the plans of Mr. Malik, who had pushed for the tribe to focus solely on developing a large Class III facility, with hotel and entertainment offerings, near New York City. That direction was seen as likely taking much longer to develop but would pay larger dividends out of the gate, whereas starting with a Class II facility could be brought online much quicker but would require building revenues gradually over several years.

Mr. Malik was a principal in one of the development bids for a casino in upstate New York. But the plans submitted by his group, MJM Enterprises and Full House Resorts, were not chosen as one of the three upstate facilities awarded earlier this month by a state selection committee.

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Lets have a class III casino here on long island complete with a resort, hotel and convention center.
By Duckbornandraised (184), Eastport on Jan 2, 15 5:06 PM