Salamanca bets its survival on gambling
Depressed New York border town, 31/2 hours from Pittsburgh, looks to Pennsylvania visitors
Sunday, May 02, 2004
By Milan Simonich, Pittsburgh Post-Gazette
SALAMANCA, N.Y. -- In its glory, this town served as a railroad hub, a place where trains rumbled through at all hours and prosperity was announced with every whistle.
The railcars have mostly vanished and so has the money. Salamanca is so depressed these days that it does not have a single clothing store. It is home to 6,500 people and two distinct entities -- the Seneca Nation of Indians and the state of desperation.
To prevent Salamanca from blowing off the map, the Indian nation hopes to lure gamblers to town by the bus load. It's opening its Seneca Allegany Casino this weekend, unveiling 1,500 slot machines and 22 poker, blackjack and roulette tables.
As police prepared for a traffic jam, something Salamanca has not seen in a generation, townspeople embraced gambling as their salvation.
"It couldn't get any worse economically for this community. This will be a ray of hope," said Mark J. Ward, Salamanca's school superintendent.
Police Chief Edward Gimbrone, who has been on the Salamanca force for 42 years, said he never thought the Senecas or the town would hitch their future to gambling. But Gimbrone, like most everybody else in Salamanca, sees no better alternative to the casino.
"I really think this is going to be a positive. I haven't seen any growth in the last 18 years, since I've been chief," he said.
With Pennsylvania legislators still debating the merits and drawbacks of legalizing slot machines, the Senecas hope to tap the Pittsburgh market for gamblers. Salamanca is a 31*2-hour drive from Pittsburgh, and a bit closer to Cleveland, Akron and Youngstown.
Seneca tribal leaders are advertising in those cities, hoping to induce gamblers to take day trips to western New York.
The Senecas are experienced in the casino business, which they prefer to call "the hospitality field." They already operate a casino in Niagara Falls, N.Y., where they control 52 acres on the American side of the U.S.-Canada border.
As a sovereign nation, free of New York laws that otherwise restrict casino gambling, they struck gold there. The Seneca Niagara casino turned a profit of almost $50 million in its first nine months, generating enough cash flow to launch the Salamanca venture without any borrowing.
For now, the casino on Seneca territory in Salamanca is housed in a temporary building of 122,000 square feet. Its exterior is the color of a dill pickle. Inside, the casino has the look of a field house, not a gambling palace. Only the carpeting, a garish mix of red, orange, purple, blue and lime, is reminiscent of Las Vegas decor.
But if the slot machines start turning a profit, the building will be replaced by a grander casino. Rick Armstrong Sr., president of the Seneca Nation, said a hotel and perhaps a golf course also would be part of the Salamanca gambling complex. A spa and boxing matches could be added to the casino's diversions.
Even with such lavish plans, the Senecas concede that they want to keep most customers inside the windowless casino. Free alcoholic drinks will be provided to anybody who is gambling, an approach pioneered in Nevada gambling halls.
Armstrong said the flow of alcohol had not created any problems in Niagara Falls. He said his casino staff, augmented by law enforcement details from the Cattaraugus County Sheriff's Department, will keep the area safe for guests and motorists.
To open their casino, the Senecas hired about 900 card dealers, slot mechanics, waitresses, cooks and parking attendants. It marked the biggest economic lift in Salamanca since the railroad industry went into steep decline in the late 1970s. Most of the casino jobs will pay little more than minimum wage, but the operators say the potential for tips is excellent.
The Senecas hope Salamanca's casino will draw 7,500 gamblers a day. Cyrus Schindler, a tribal counselor, said the number is realistic because the new business is positioned to pick off plenty of tourists.
Allegany State Park abuts the town. It brings campers and outdoorsmen to the region, and many of them would enjoy a taste of nightlife, Schindler said. Skiers congregate in upscale Elliottsville, about 10 minutes away. The Senecas expect them to help keep the casino busy in wintertime.
"There is no industry in New York anymore. Everything is imported," Schindler said. "We see this casino as a steppingstone to more development."
The Senecas, for instance, are interested in building a garbage-burning power plant. Casinos may provide the money to make such an undertaking possible.
For the immediate future, though, the Salamanca casino's best feature is that it gives hope to a dying town, school Superintendent Ward said.
"I don't think there's a store here where you can buy a pair of underwear, crude as that sounds," he said.
Like necessities, entertainment has been nonexistent in Salamanca.
"It's awful to say this, but you see people get a six pack and sit on the bridge," Ward said.
He said impoverished families had congregated in Salamanca because of inexpensive housing and cheap utilities. If he has a fear about the casino, it's that it could drive up the cost of housing, thereby displacing people stuck in low-wage jobs.
Land speculation already has begun. Wealthy people are buying up properties in anticipation of a boom caused by the casino.
Still, Ward calls gambling "a tremendous opportunity" with the potential to bring money to town.
Under its agreement with New York, the Seneca Nation will pay state government 15 percent of its net revenue from slot machines. Salamanca Mayor Jeffrey Pond and the school system are lobbying to increase that amount to 25 percent, identical to the breakdown for the Niagara Falls casino.
The money is funneled back to local governments, helping them cope with any costs attendant to the casino, such as the need for more law enforcement officers or schoolteachers.
Seldom has a casino development been met with such open arms. Even Atlantic City, N.J., a beachfront pockmarked by slums, faced vigorous opposition when it legalized casinos in 1978. Other than summer tourists, Atlantic City had no economy to speak of until the casinos arrived.
Vice, in the form of cut-rate cigarettes, had created the biggest excitement in Salamanca's economy until the casino.
Cigarettes sold on the Seneca Nation are free of state and federal taxes, creating a savings of up to $16 per carton. This phenomenon spurred Internet cigarette dealing from abandoned city storefronts and led to criminal investigations of other salesmen evading taxes.
Nothing will be secretive about the casino, a core of the 7,200-member Seneca Nation's business.
"For years, we depended on federal grants," Schindler said of the nation. "But the grants are drying up."
If the casino proves profitable, the Senecas may become an economic force strong enough to diversify into other enterprises.
Brian Hansberry, a 26-year casino veteran hired to manage the Salamanca operation, said he was optimistic. He has worked in gambling towns from Atlantic City to Lake Charles, La. He thinks this one can make it.
The stakes are high. Ward said he did not believe gambling was a panacea, but that it's the only hope for his town.
If the casino falters, he said, Salamanca will die an agonizing death.