Setting the Agenda: Casinos & Gambling

Casino gambling promises to be one of the hottest issues in New York in 2013.

The stars have seemingly aligned for proponents of casinos, with Gov. Andrew Cuomo, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver all expressing their support.

And last year the Legislature took the first step toward passing a constitutional amendment with a vote to legalize casinos. Next year a newly elected Legislature is expected to vote on the required second passage of the amendment and put the matter before voters in a referendum.

Key lawmakers said they are optimistic the effort will be successful, but that competition for the seven licenses will be stiff.

“The first thing we’re going to have to do is the second passage of the constitutional amendment,” said Assemblyman Gary Pretlow, chair of the Assembly Racing and Wagering Committee. “The hard part comes in designating who, when, where the casinos will be located, if anywhere, and that’s where the turmoil is going to come in, because everyone that’s in favor now, if they’re not the ones chosen to be the operators, will become opponents. That’s their business.”

State Sen. John Bonacic, the chair of the Senate Racing, Gaming and Wagering Committee and a longtime proponent of legalizing full-fledged casinos, said that he’d like to first pass enacting legislation that would specify the locations across the state where casino operators could apply for one of the seven licenses.

Bonacic said that during negotiations it was understood that one casino would be located in the New York City area and six were to go outside the metropolitan area, though this was not agreed to in writing.

“Now, there will be the process on how you will bid,” Bonacic said. “It has to be open, it has to be transparent, and I think we have to identify where the seven locations are before we can move forward with a constitutional amendment and ask the people to vote on something in November of 2013. They have to know what they’re voting on and where.”

Casino operators from around the country and around the world have been paying close attention to the developments in the Empire State, an attractive market given New York City’s large population and the millions of tourists who visit each year.

Genting, a Malaysian conglomerate that recently opened the Resorts World racetrack casino in Queens, figures to be a major player in any competition for a license.

“Quite frankly, wherever a license might go in the metropolitan area, and if it’s one, I don’t care who bids—Vegas, Connecticut, Jersey, Pennsylvania, I don’t care, this is my own opinion—Genting blows their socks off and gets that license,” said Bonacic. “I’m not predetermining anything, but if it’s a competitive process, they have the deepest pockets.”

Bonacic said casinos would be an important engine for revenue growth, particularly in the economically depressed Catskills in his home district.

Other factors likely to be addressed next year include how much revenue casinos would share with the state, resolving a dispute with the Senecas over an exclusivity agreement in Western New York, the possibility of gambling at Belmont and how much money will go to fund programs for problem gamblers.

“I do have a bill, and so does Assemblyman [Steven] Cymbrowitz, to put a percentage of the monies that derive from gaming into the organizations that handle problem gamblers,” Pretlow said. “We do have money now, but it’s not enough.”

Another key issue last year was the New York Racing Association, which was taken over by the state after its executives were found to have misspent funds. A new board will give more power to the governor and Legislature for at least three years.

“Quite frankly, at this point it may be okay for the state to do this until it gets stabilized, but I for one would not like the state to stay in the business of racing for a long life,” Bonacic said. “Some of the discussions when it was done were, ‘Three years, then we’ll look at it again.’ ”

The state is also setting up a consolidated five-member gaming commission that will oversee all gambling activity, including the lottery, horse racing and Native American gambling establishments.

What Got Done in 2012:
First legislative passage of a constitutional amendment legalizing casino gambling
Reconfiguration of New York Racing Association board
Authorization of a new state gaming commission

What’s on the Agenda:
Second legislative passage of a constitutional amendment legalizing casino gambling
Passage of enacting legislation for legalizing casinos

INSIGHT
New York Gaming Association
By James Featherstonhaugh
Chairman

It might be our best-kept secret. A wildly successful business model that only New York State employs. This business model puts thousands of people to work, has been thriving even during a bad economy and contributes billions of dollars to education. And as 2013 approaches, it’s only going to get better.

I am speaking, of course, about the racetrack casinos of the New York Gaming Association. We have strong support within our communities precisely because New Yorkers know us, and have for decades. And our successful record of driving funding to education speaks for itself: next year alone we expect to provide $1 billion for New York schools, the equivalent of nearly 13,000 teachers in the classroom.

One of the keys to this successful partnership between our members and New York is that we pay one of the highest tax rates in nation for the benefit of education, approximately 68 percent.

That tax rate allowed our members to generate nearly double the amount of tax revenue as the Las Vegas Strip and Atlantic City casinos combined through the first six months of 2012. In New York, $620 million in tax revenue was collected during the first six months of 2012. By comparison Nevada and New Jersey—despite having full-fledged casinos and more combined gaming activity than New York—only generated $329 million.

As we begin looking to 2013, New Yorkers should feel secure knowing that they have a reliable partner for education.

Empire City Casino at Yonkers Raceway
By Timothy J. Rooney Jr.
General Counsel

New Yorkers spend billions of dollars gambling in other states each year. While they would prefer to stay in state to gamble, the state constitution prohibits commercial casinos from offering live table games. By amending the constitution to allow for full commercial gaming, we can keep those dollars and tens of thousands of jobs right here in New York.

Empire City Casino is a logical choice for a full commercial casino license. Its 98-acre campus is located only 15 miles from Times Square in beautiful Westchester County. The site has hosted gambling in one form or another for over one hundred years. The current facility is the result of more than $450 million of private investment and attracts over 7 mil-lion visitors a year with little to no impact on the surrounding communities. The site is poised for rapid transformation to a destination casino with ample land and access to make even the biggest Las Vegas
resorts envious.

Our site, location and over 1,200 employees give Empire City the ability to introduce table games immediately after they are authorized. While others attempt to contract for land and prepare environmental studies, we will be employing thousands of New Yorkers and generating much-needed revenue for the state and surrounding area. As we expand to a “city of entertainment,” we will be an even greater economic driver of hundreds of millions of dollars for New York, and the creator of thousands of jobs.

Seneca Nation of Indians
By Robert Odawi Porter
President

In 2002 the Seneca Nation signed a gaming compact with New York State. The state agreed to provide gaming “exclusivity” to the Nation—and in exchange, the Nation agreed to make “exclusivity payments” to the state. This was an agreeable, mutually beneficial arrangement wherein the Nation paid $476 million to the state from 2002 to 2010. That is, until the state violated the exclusivity provision via Moxie Mania and gaming machines at Batavia Downs, Hamburg, and the Finger Lakes casinos, within our exclusivity zone.

What we know is that when the Nation and the state work cooperatively, there are tremendous shared benefits to the state’s taxpayers, municipalities and the Nation. When agreements are broken, there are repercussive effects and collateral damage that impact friends, neighbors and ourselves.

Now the state is moving a new freight train down the tracks with a constitutional amendment to legalize gaming in the state. The Nation is not opposed to other gaming venues outside of our exclusivity zone. We simply want the state to honor the compact that the state Legislature passed and Gov. Pataki signed into valid law.

The Seneca Nation encourages New York State officials to honor the 2002 compact. The Seneca Nation has provided more than 5,000 jobs, makes a $1 billion economic impact in Western New York, and we are rooted to the region. Our message to New York State: Why not work with us to help Western New York grow and prosper?