ALBANY — Legislation announced Monday gives a big boost to state-sanctioned gambling in the Catskill Mountains.

Empire Resorts Inc., in partnership with Concord Associates, will build a 750-room hotel, a convention center, a 7,500-seat events center and a 100,000-square-foot casino with video lottery terminals at the site of the Concord Hotel in Monticello, Sullivan County. The company also will construct a new 5/8-mile harness horse racing track at the site to replace its Monticello Raceway, two miles away.

Gov. David A. Paterson and legislative leaders agreed to let Empire keep 75 percent of revenue generated by 3,000 video lottery terminals at the new facility. In return, the Henderson, Nev.-based casino developer promised a $1 billion investment in the project and the creation of 2,000 jobs.

"Empire Resorts has finally realized the dream of being able to being build a first-class resort and gaming facility in the Catskills," said David P. Hanlon, Empire's CEO. "We have achieved a new effective gaming tax structure that is competitive with casinos in Connecticut, Atlantic City and Pennsylvania."

The state is expected to take in $38 million annually from its 25-percent share of the video lottery terminal revenue. That money, the governor said, is earmarked for education.

"Government and the private sector have worked together to structure a deal that will at least double the amount of money for education that the state expected to generate from the Monticello Racetrack," Gov. Paterson said.

Empire operates a 1,500-VLT racino, Mighty M Gaming, at the Monticello Raceway. Under its current deal with the state, the company pays 58 percent of its VLT revenue to Albany.

Structures at the Concord site will be demolished by July. Construction of the new facilities is slated for completion in July 2010.

For the St. Regis Mohawk Tribe, the announcement dredged up memories of the tribe's 12-year quest to open a Catskill casino. In 2001, the state Legislature authorized six tribal casinos — three in Western New York and three in the Catskills. The Seneca Nation of Indians has opened two of the western casinos and is building a third in Buffalo. None of the Catskill projects has gotten off the ground, largely because of disputes between Albany and various tribes over tax collection, land claims and other matters.

In February, Empire walked away from a casino development deal signed in 2005 with the St. Regis Mohawk Tribe for a $700 million "Las Vegas-style" casino/resort complex at the Monticello Raceway. That casino would have offered a more "complete" gambling experience, including 125 table games, 24 poker tables and 3,500 slot machines. It was expected to generate more than 3,000 permanent jobs.

Helping to scuttle that deal was a hastily announced rule in early January by the federal Interior Department, which refused to take tribal land into trust for the proposed Mohawk casino because it said the site was too far from the tribe's Hogansburg reservation.

St. Regis subsequently sued Interior, calling the rule change "arbitrary and capricious," but withdrew the suit when Empire announced its partnership with Concord.

Despite the realization that Empire's big financial stake in the project may have left the company with little choice but to move on after the Interior decision, the dissolution of the Mohawk-Empire deal left some hard feelings at St. Regis. The federally recognized three-chief government had worked for more than a decade to build a tribally owned casino in Sullivan County.

"I wish them well with their new project. My only regret is for the loss of the partnership of the Mohawk casino at the Raceway," said Barbara Lazore, one of the three tribal chiefs at St. Regis. "I strongly believe we should have been successful with our lawsuit against [Interior] on their refusal to take the 29 acres into trust for a casino."

Another chief, James W. Ransom, said Empire will face strong competition.

"I hope for the sake of the good people in Sullivan County that this project works for them. They have been trying for many years to improve their economy and have hit numerous roadblocks along the way," Mr. Ransom said. "There are still many roadblocks ahead for this project. It will be difficult to compete against the slot machines in Pennsylvania and the VLTs that will be going to the Aqueduct Racetrack."

And while the Mohawks said in February that they "are done" with their quest for a Catskill casino, Mr. Ransom may have left that door open just a little.

"We continue to patiently wait for a new administration to arrive in Washington," he said. "And hopefully one that will revisit our land in trust application and see the many benefits our Catskill project will bring to the tribe, Sullivan County region and the state."