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EDITORIAL: Catskills casino plan a bad bet for NY

Casinos seduce gamblers with the temptation that everyone can be a winner. Gov. David A. Paterson is just the latest player to sit down at the table in this alternate reality.

With only a few chips and a few weeks left as New York's leader, Paterson has agreed to an improbable land deal with a Wisconsin-based tribe and two upstate municipalities that supposedly will clear the way for a major casino and resort in the Catskills. The odds are better that Milton Berle will return to Grossinger's before a Wisconsin tribe, the Stockbridge-Munsee Community Band of Mohican Indians, puts in a blackjack table 90 miles north of New York City.

This surprising and secret approval by the governor, to settle a land claim in return for supporting a casino project, comes one month after the state inspector general reported the sordid details surrounding the initial effort to award a contract for video lottery terminals at Aqueduct Raceway. These two events should prompt Gov.-elect Andrew Cuomo to establish a comprehensive economic development plan that would site new casinos where they'd provide the biggest payoffs to the surrounding region and the biggest cut to taxpayers.

Paterson's maneuver yesterday was designed to maximize the Wisconsin Mohicans' chances of winning federal approval. They agreed to drop a claim to 23,000 acres in Madison County that they argue was stolen from them two centuries ago. In exchange, they'd get 330 pristine acres in Sullivan County.

In 2008, the Department of the Interior's Bureau of Indian Affairs rejected a previous plan for a Stockbridge-Munsee casino there, finding it violated a regulation requiring all off-reservation casinos to be within commuting distance. There is formidable political opposition in Washington to any blanket changes in that rule. So the Wisconsin tribe is hoping that a land swap will be a unique wild card and make them winners.

Even if federal regulators agree, the State Legislature may have to approve Paterson's settlement of the land claim. And there is plenty of opposition from the start from New York's Indian nations with established casinos, such as the Oneida and the Senecas. The St. Regis Mohawks, the tribe involved with all the earlier hoopla about gambling in the Catskills, are looking for partners. Meanwhile, Southampton's Shinnecock nation, which just received federal tribal recognition, is shopping around Long Island for a site within commuting distance of its own land.

Paterson may also have jeopardized the state's contract with Genting New York, which just turned over a $350-million deposit for the right to create a racino at Aqueduct Raceway. The international concern says the Catskill casino "greatly reduces" its ability to invest $1.3 billion in Queens. And the Natural Resources Defense Council contends that any construction at the proposed Sullivan County location is too close to reservoirs that supply half of the state's drinking water. It is ready to sue.

Paterson rolled the dice, but New York is still without a winning policy on casino gambling. N