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The development comes as a major surprise late in Mr. Paterson’s administration, since the recent discussion about casinos has focused on tribes based in New York, particularly the Shinnecock tribe in the Hamptons, which recently won a long battle for federal recognition.

Officials in Sullivan County hailed the news, but one major New York tribe, the Oneida, reacted with dismay. Government watchdogs raised concerns that the talks had apparently been conducted in secret.

The project would still require federal approval, but state and local officials said they were confident that they had already cleared most of the necessary hurdles. As part of an agreement with the state, the tribe will settle a land claim suit in Madison County in central New York, and receive an acre of land as part of the settlement, a person with knowledge of the arrangement said, speaking on the condition of anonymity because the deal had not been finalized.

Securing a foothold in New York is aimed at helping the tribe win federal approval to build a casino in Sullivan County, though federal regulators have long frowned upon casinos proposed outside of reservations.

The tribe has also been negotiating a compact with the state that would give $15 million a year to Sullivan County and give the state a percentage of casino revenue, a key component of winning state and federal approval. The State Legislature would also have to approve a tribal compact.

“The Paterson administration is working to reach an agreement with the Stockbridge-Munsee Community, Band of Mohican Indians; the secretary of the interior; and a number of local governments to resolve a longstanding land claim,” Jessica Bassett, a spokeswoman for the governor, said in a statement on Tuesday. “This agreement would clear the way to bringing much needed economic development to Sullivan County.”

Senator Charles E. Schumer, Democrat of New York, said in his own statement that the deal “would be a huge boost for the economy that will include job growth and tourism, in a region that has been struggling for decades to get back on its feet.”

At least one state tribe, however, is not celebrating. Mark Emery, a spokesman for the Oneida Indian Nation, said, “We, and presumably every other Indian nation, were surprised to learn that the State of New York would invite an out-of-state tribe into the state to conduct gaming, which means that all of the profits will be drained from New York.”

The Oneida run the Turning Stone casino, which is between Syracuse and Utica, and have had poor relations with the Stockbridge-Munsee. The tribes have had conflicting land claims.

“The idea that the state was settling a Stockbridge land claim is laughable,” Mr. Emery said, “as the claim relates to Oneida Nation homelands and nobody honestly believes the Stockbridge ever had a legitimate claim here.”

The Stockbridge-Munsee did not return a call for comment. The office of Governor-elect Andrew M. Cuomo also declined to comment; Patrick E. Brown, who was a top aide to Gov. Mario M. Cuomo, played a central role in arranging the deal.

While there is already a casino in Yonkers and one being developed at the Aqueduct racetrack in Queens, both are technically racinos — they are attached to horse tracks and feature video lottery terminals, but not table games.

The casino envisioned for Thompson would be a full casino with table games, like poker and blackjack, a development that would quite likely draw business from casinos in Atlantic City and Connecticut, as well as Turning Stone.

Anthony P. Cellini, the supervisor of Thompson, said the deal could revitalize the Catskills. “We were once the Northeast’s tourism capital, and this could once again bring that back to this area,” he said.

Several tribes have been trying to build casinos in the Catskills for years, and the Paterson administration has said previously that it was open to building as many as three casinos in the region to generate jobs and revenue.

But the Stockbridge-Munsee tribe has already bought land in Sullivan County for its casino and is several years along in its efforts at winning approval. A key facilitator of the deal has been Mr. Brown, a lobbyist who once negotiated with Indian tribes on behalf of former Governor Cuomo’s administration. Mr. Brown represents the developer working with the Stockbridge-Munsee, Trading Cove New York, L.L.C., on the casino project. He declined to comment.

Blair Horner, legislative director of the New York Public Interest Research Group, said the deal raised eyebrows, particularly coming on the heels of a scandal over bidding for the Aqueduct racino. “The negotiations were conducted in secret,” he said, adding, “The administration should have bent over backwards to have made this process as open as possible.”

Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFwsQoinTmFqIi4x-BkkSTl_gnygw&url=http://www.nytimes.com/2010/11/17/nyregion/17casino.html?src=twrhp