On the final Wednesday OF Passover, men in yarmulkes and women in fur hats socialized between services and kosher meals at Kutshers Country Club, one of just a few resorts remaining in the Catskills' legendary Borscht Belt.

A couple miles away, amateur harness drivers from Hungary readied their horses for the fifth race at Monticello Raceway. The growing amateur harness racing movement has given hope to horsemen who watched the sport fade over the past two decades.

A packed house for the Jewish holiday and an estimated quartermillion-dollar handle for the day at the track are good things in the heart of the Catskills, where boarded-up bungalow colonies and empty billboards dot the winding country roads.

But American Indian casinos are looming as the real hope for economic salvation at Kutshers, Monticello Raceway and within the community.

“Do we ever need it here!” said John Manzi, who grew up here and has worked for Monticello Raceway for 30 years. “We need action.”

Casino developers such as Trading Cove Associates and Park Place Entertainment are betting a percentage of New York City residents would take scenic Route 17, known as the Quickway, to the Catskills rather than crawling up Interstate 95 to Foxwoods Resort Casino and Mohegan Sun or driving three hours south to Atlantic City.

They want action as much as the many Sullivan County residents and community leaders who embrace casino gambling as a way to revitalize the former premier vacation destination. These days, the county government has replaced tourism as the leading employer, and many of the kosher delis and boutiques that once served a booming summer crowd are boarded up.

Casinos in the Catskills are not a new idea, as Mohegan Sun's marketing executive, Mitchell Grossinger Etess, noted at the second annual New York Gaming Summit in Albany this week.

Etess' family owned Grossinger's resort in Liberty during the glory years in the Catskills, when the mountain community was a magnet for artists such as Milton Berle, Henny Youngman and Sid Caesar. In the mid-70s, as the area was fading, Etess said his late brother, Mark Etess, and other members of the Catskill Resort Association “lobbied long and hard” to bring legalized gambling to the Catskills before casinos opened in Atlantic City.

“We could have Atlantic City in the Catskills now,” he said. But the idea was met with resistance, and proponents gave up.

Gov. George Pataki gave gaming proponents new hope when he authorized American Indian Casinos for the Catskills following the Sept. 11 terrorist attacks. In all, Pataki has approved six Indian casinos for New York and eight so-called “racinos,” or racetracks with slot machines.

Despite those approvals, there was an air of “we're still waiting” at this week's gaming summit.

“It's been four years since we started the process of trying to develop a major resort in the Catskills,” said Clive Cummis, vice chairman of industry giant Park Place. “We're not there yet. It becomes frustrating when you and your partners want to develop in a community that needs an economic engine.”

But New York's legislature is counting on gambling revenues to balance its budget during the fourth quarter, and that could provide momentum for casinos. The quickest windfall would likely come from the racinos, since the tribes looking to build casinos in the Catskills still face major hurdles.

Connecticut casino operators are watching the Catskills development with interest as well. Casino development delays in New York have given Mohegan Sun and Foxwoods more time to expand their properties and build customer loyalty. About 20 percent of Mohegan Sun's customers come from New York, and casino officials estimate the Catskills casinos could take an 8 percent bite out of their New York business.

The Mohegans considered partnering with the Wisconsin-based Stockbridge Munsee Band of the Mohicans, who are backed by Waterford's Trading Cove Associates, for a New York casino, but never struck a deal. Casino and tribal executives also met with raceway officials, but there was no deal there, either.

Bob DeSalvio, executive vice president of marketing at Foxwoods, would not venture what percentage his casino stands to lose to Catskills facilities. He said it would depend on how quickly and completely the Catskills casinos develop.

At the Albany gaming summit this week, analysts said gamblers in the Northeast continue to be underserved and there is room for more casinos. They said Atlantic City, where some of the properties are not performing as well as they could, is likely to suffer more than Connecticut if gaming expansions occur in New York, Pennsylvania and elsewhere.

Meanwhile, said one analyst, New York State is losing out on the disposable income of millions of people in the metropolitan area while casino development idles.

“Gaming revenue flows to wherever there's an outlet,” said Raymond S. Cheesman, a senior vice president at Jefferies & Company.

One casino did get built in New York since the passage of Pataki's post-Sept. 11 gaming legislation. The Seneca Tribe reached an agreement with the state and federal governments and built a temporary casino in Niagara Falls. The tribe acquired the land under its settlement act with the federal government. Seneca Niagara Falls Casino opened on New Year's Eve, just 100 days after construction began.

Chief Executive Officer G. Michael “Mickey” Brown, a keynote speaker in Albany, said the Senecas would be expanding the resort over the next five years. The tribe, which has exclusive rights to gaming in much of western New York, eventually plans to build two more casinos - one in the Buffalo area and another in a yet-undetermined location.

That leaves the three Catskills casinos up for grabs, and at the summit, speakers were jokingly taking bets on what might happen over the next year or two.

“In New York within the next six months, at least two gaming compacts between Native Americans and New York will be complete and construction will begin on at least temporary casinos,” predicted lobbyist James D. Featherstonaugh.

Three tribes in the Catskills' Sullivan County are trying to negotiate compacts with the state, take land into trust and gain federal approval for development and management of casinos. A fourth tribe, the Moduc, is looking to build a casino in nearby Ulster County, and others may yet come forward with the promise of huge profits.

Each of the contenders says their facility will be the best.

“Everybody knows Monticello is going to be the biggest gaming facility in the world,” said Paul Thompson, chief of the 10,000-member St. Regis Mohawk Tribe.

The Mohawks are backed by Park Place, owners of Bally's, Caesar's Palace, Flamingo and other resorts. They plan a casino at Kutshers Sports Academy, located about two miles off Route 17 in Monticello. The tribe has an agreement with the local community but needs to negotiate a state compact and take the site into trust. They also await National Indian Gaming Commission approval of a management agreement.

Then there's the matter of a lawsuit brought by casino opponents who say Pataki did not have the right to authorize gambling.

The Mohawks already operate the Akwasasne Casino on their reservation near the New York-Canada border. They and the other tribes seeking to build in the Catskills will now ask the federal government to authorize a casino off-reservation, which is a trickier undertaking.

If all three casinos were built, New York City traffic would arrive at the Stockbridge Munsee casino first. The tribe is waiting for approvals from the U.S. Bureau of Indian Affairs and needs to take into trust a 333-acre parcel Trading Cove bought and turned over to the tribe.

In addition to the lawsuit all of the tribes face, the Stockbridge Munsee, who already run a casino in Wisconsin, have another problem.

The tribe claims descent from the native people who greeted Henry Hudson in New York nearly 400 years ago, but the Munsee are no longer based in New York. Some of the other tribes object to allowing an “out of state” tribe to open a casino here and Gov. Pataki has refused to negotiate with them.

The tribe remains confident those issues will be resolved. In the meantime it is also entangled with the Oneida nation in a land claim suit involving 24,000 acres in central New York.

The third Sullivan County contender is the Cayuga tribe, which plans to develop a casino at the raceway in partnership with Empire Resorts. The tribe is only now submitting its federal applications. The Mohawks had received approval for a casino at the raceway four years ago, but pulled out after they struck a deal with Park Place for the Kutshers site.

Manzi, the longtime raceway employee, said not everyone is pleased with the idea of Indian gaming at the track, but the horse business and the community really need it.

“It's not the greatest thing for our industry that we have to sell other things to keep (harness racing) up, he said, “but whatever we have to do ... ”