Last week the PGA Tour hosted a post-FedEx Cup event at an upstate New York casino/resort which was at the center of a high-profile and unsavory tax dispute with its neighbor municipality. Turning Stone Casino and Resort near Utica, New York, owned and operated by the Oneida Indian Nation, has three courses including Atunyote, which held the Turning Stone Resort Championship. However the facility, which is primarily an Indian gaming "resort" has also been embroiled in a protracted legal battle which even triggered an adverse ruling from the United States Supreme Court.
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My journeys as an entertainment, sports, intellectual property and Internet lawyer led me to the Supreme Court last year for oral argument in a case involving file sharing of music on-line. (MGM v. Grokster) By a lucky coincidence, Justice Ruth Bader Ginsberg read the decision in City of Sherrill before our case was heard. Already disillusioned that the PGA Tour was considering hosting tournaments at this casino’s cookie-cutter and overpriced courses, my interest was piqued when I learned of the unseemly tax dispute swirling around the facility.
Briefly, the Oneida Nation bought land within the City of Sherrill which, hundreds of years ago, was once property of the tribe. The Oneidas then stopped paying taxes on the land, arguing that their repurchase of the land made it tribal property, subject to their laws and control and immune to taxation by the City of Sherrill. The property on which the casino sits already enjoys tax free status.
Now, my family has lived in the area for four generations, so I am intimately familiar with all the players; Oneida Tribal Leader Ray Halbritter, the town fathers of Sherrill, the region’s New York State Senator Joseph Griffo, even Magistrate David Hurd, the Federal Judge who first heard the court case at the initial level. Having practiced before Judge Hurd years ago, I was confused to hear that he had granted the relief the Oneidas requested and his decision was affirmed by the appeals court. A quick, unscientific poll of local lawyers revealed that my concern was global within not only the legal community, but the community at large. Magistrate Hurd’s decision was puzzling, to be considerate.
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Craftily spinning to the public that the decision was a "roadmap to our placing the land in a constructive trust" instead of the reprimanding tone used by Justice Ginsberg in her reading, the Oneidas now seek to avoid taxes under a separate avenue, a constructive trust scheme, that has infuriated locals. Under this scheme, the Oneidas will grant the rights to the land - on paper - to the government in exchange for tax-free use. The tribe asserts on their website that their providing 4,000+ jobs to the region is adequate justification for their goal of non-payment of taxes to the local economy on over 17,000 acres of land. "They think that because they provide jobs, they should get out of paying taxes like everyone else - a rather large tax bill at that" said one local attorney who spoke on condition of anonymity.
Regional government’s response has been vehement. Former City of Rome mayor and sitting New York State Senator for the region's 47th District, Joseph Griffo formally filed opposition papers on behalf of the county of Oneida. He wrote:
Oneida County had no choice but to oppose the application because it represented another all-or-nothing filing. Taking 17,000 acres into trust creates a situation that imposes a checkerboard of authority and regulation and is against the best interests of the people of Oneida County, including Nation employees whose homes could be impacted by unrestricted land use activities….This is not about closing a casino. I recognize that in the context of issues related to their gaming compact and regulations regarding gambling that there are special concerns for Turning Stone and that it is important to ensure the viability of an enterprise employing thousands of local people. However, the application offered no room for the kinds of negotiation that are vital to arriving at a viable solution.
In an interview for Golf Observer, Griffo estimated the non-collected sales tax alone would be approximately $3,000,000 per year, a major amount for an area as small and under-populated as Oneida County. "We expressed opposition to land into trust because a fair and negotiated settlement would be best. There should be county, state, federal and locality issues resolved." Griffo also said that the constructive trust scheme would not alleviate the problems that concerned the Supreme Court. "There would indeed be a confusing checkerboard of jurisdiction in various areas which is detrimental to the localities and the county. You have to know whose rules you’re under not have it be house to house and property to property."
Although Griffo was supportive of last year's PGA Tour stop conducted at Turning Stone (in place because last year’s B.C. Open site was flooded when torrential rains caused the event to be moved), he is not the only official sharply critical of the Oneidas. From the local Oneida County perspective, Bob Comis, city manager for the city of Sherrill not only agrees that the Oneidas should pay their real estate taxes, but other local taxes as well. "They need to resolve the land claim. The Supreme Court case really said its not sovereign land and we can collect taxes."
Even sales tax is targeted by the Oneidas for discharge. New York State has legislated that the property in question is subject to regulation and payment of sales tax, yet the Oneidas don’t want to pay. Governor Elliott Spitzer has indicated willingness to enforce the tax.
Local complaints abound. Irene DeGroat of Vernon echoes the sentiments of many in her recent letter to the editor of the municipality newspaper, the Utica Observer-Dispatch. "Claims that Turning Stone and the other tax-free enterprises can’t survive without federal trust lands is just a load of fertilizer….The tax-free gaming isn’t promoting our state government to remain solvent and healthy, so resisting federal trust lands for Indian tribes is the only sensible solution. If federal trust lands are wrongfully approved in the state, in would certainly put our localities and state further into default."
Other residents are equally outraged. "Claims that they’ll have to close the casino are bogus" continued the local attorney. "It’s been making money hand over fist for years. Now suddenly they can’t run a casino while legitimately paying a tax bill, yet Trump, Wynn and every casino from Vegas to Atlantic City can? What’s wrong with their business sense?" "The PGA Tour has no business supporting a casino" echoed one prominent sportswriter who spoke on condition of anonymity. "It looks terrible and this seedy tax ditching scheme looks all the worse. The tour ought to know better. What were they thinking?"
Inquiries for comment from Turning Stone Casino officials on the issue of the tax dispute universally get a polite brush off and are uniformly sent to their brief website page on the issue. The page repeatedly stresses that they employ over 4,600 people, but offers no other justification for their claimed entitlement to escape paying taxes. However Bob Combs, Senior Vice President of Communications for the PGA Tour defended the choice of Atunyote for a post FedEx Cup event. "We did our due diligence on this and we are comfortable that Turning Stone Resort is a completely suitable host for a PGA Tour event. The Oneidas are a federally recognized nation. They have a gaming compact and it’s valid under federal law. We understand that there are issues between the Oneida Nation and some local citizens, but those are not the Tour’s issues to focus on or resolve."
Combs also praised Turning Stone’s ability to help the Tour out of a weather-related crisis last year and may have indirectly underscored the true reason for the selection of Atunyote for the post FedEx Cup event. When asked about the Turning Stone’s treating Broome County’s loss of last year’s B.C. Open with might-fingered joy when they snapped up the tournament at the eleventh hour, he said, "Last year when the Endicott area received severe flooding and it was impossible to host the B.C. Open as planned, Turning Stone stepped up and saved the event. In a span of only weeks, they made arrangements for and hosted a quality PGA Tour event - a process that normally takes far longer." {Author’s Note: The tournament was held the same week as the British Open at Royal Liverpool] "On top of that, they raised over $200,000 for local charities. Meanwhile the story has a happy ending for the Endicott community as well in that they became the site of a very successful Champions Tour event."
When one delves further into that issue however, it’s tough to see how Endicott can feel the same way and have the same financial benefit. Their "mom and pop" tour stop was a well known and well received top level event which has now grown far smaller and has merely a niche following as a round-bellies alumni party. Similarly, while Combs added that there was an outpouring of support from the Oneida County community as well, it’s hard to see support for the Tour’s position that it resulted in a financial boon for the region outside the Oneida Nation. Casinos are built like mazes - to keep people in - and since the resort is designed to be all inclusive, it seems the true value to the community outside of the Oneidas is minimal. Most people will only be coming for the day and the casino will try to keep the overnighters on property for lodging and food. Combs did however confirm two other points. First, the prize money offered for this tournament - which Turning Stone named after themselves - is $6 Million…an entire 25% higher then the purse offered by the next highest venue in the seven week fall series that takes place after the Tour Championship.
Even more disconcerting, Combs confirmed that there will be no mention of the casino in television or print advertisements or marketing literature for the tournament. "As it relates to our Fall Series event there, an important and relevant distinction is that the TOUR contracts with the Oneida Indian Nation, but not the gaming portions of the resort. Under the terms of the agreement, there is no mention or focus on gambling in any of the tournament’s marketing and promotional materials or the telecast. This is no different than the approach the Tour has taken in other markets including Las Vegas and Reno-Tahoe on the PGA Tour and the Miccosukee Championship on the Nationwide Tour." While there is a world of difference between a tournament held in a city that has casinos (Reno or Las Vegas) and a tour stop at a facility specifically designed as a casino, there is a more disconcerting issue. As a result of this agreement between the Tour and Turning Stone, the tournament, the marketing literature and the broadcast will affirmatively conceal to the viewer the true raison d’etre of the entire facility - gambling. That should surprise a few vacationers when they arrive thinking they’ve come to a resort and are in a maze of a casino. There’ll be no mention of gambling at all in the ads or on TV, but they won’t exactly be so quick to hide the slots when people walk in with full wallets, will they?
The PGA Tour, as stewards of the game, have a duty to protect the good and welfare of golf by choosing worthy venues; venues free from the cloud of gambling and tax disputes, venues that promote excellent golf course architecture and venues that are respectful of the storied history, reputation and goodwill of sister courses. People rightfully should be furious when they see ads for a golf resort and find out they are coming instead to a gambling ranch…albeit one with a "world-class" spa facility for those tough days at the one-arm bandit. The difference between revealing this fact and concealing it, is - as author J.K. Rowling put it - the difference between truth and lies, courage and cowardice.
Worse still, promoting casinos promotes the misery of the golf populus at the expense of the most simoniacal people. The residents must pay taxes but, to paraphrase Mark Twain, these hapless people work so Atunyote may grow fat off them, drink misery to the dregs so Atunyote may wallow in cash, pay so that Atunyote can avoid taxes, and bow in adulation and genuflect so Atunyote may think itself a god of this world.
There is also a cultural dichotomy at work as well. The vast majority of golfers are not about foie gras and champagne, but bacon and egg sandwiches and a nip of scotch to keep warm. Golf is not about creature comforts, but comfortable playing partners. It’s not about taking your own Cessna to the course landing strip, but driving over dirt roads and finding the unobtrusive entrance and immersing yourself in the most important aspect of a great club - a great strategic course design which recreates the conditions of the best UK and Irish clubs.
Atunyote’s supporters pray to all the false idols of golf design, expense, a big-name architect and length/difficulty. The result was a long, but overly wide strategy-light, overpriced gaudy arcade of a golf course that summarizes all the design mistakes of the 80's and early 90's and boasts a price of $200 that is completely unjustifiable. In short, waterfalls, stained glass windows in the clubhouse, a private club gate and "Augusta White sand" in the bunkers are the drawing points according to the media relations team. It’s a kaleidoscopic whirligig of meaningless trash like waterfalls, but three scoops of unflavored yogurt for hole shapes and greens. They’ll try anything to distract you form the fact that the course isn’t worth half the fee it charges.
But worst of all, no matter how the Tour seeks to divest itself on paper and TV from the gambling and the tax mess, the firestorm of controversy surrounding the casino burns like a proprietary torch over the tournament and no amount of paper shuffling, name changing and charitable contribution change the fact that Turning Stone is the reddest of the Tour’s red light districts. In this case, when you ask yourself the question, "what are they trying to sell me?", simply remember Kurt Vonnegut’s admonition that "what sometimes passes for culture is often really just a commercial."
