News Coverage on Casino Gambling

Crain's New York

Cuomo's Casino Flip

Chris Bragg
Sunday, January 13, 2013

 

A year ago, Gov. Andrew Cuomo made the centerpiece of his State of the State address an ambitious plan to legalize casino gambling in New York. A $4 billion convention center in Queens was to be built next to the Aqueduct racino, which seemed certain to become the city's first full-fledged casino. In the 2013 iteration of the speech last week, the governor reversed himself. He said casinos in the city would undermine the goal of drawing Gotham's 52 million tourists upstate. The first three gambling venues he eyes for the state now appear destined for north of the metropolitan area.

"It was kind of a 180," said state Sen. John Bonacic, a Hudson Valley legislator who chairs his chamber's Racing, Gaming and Wagering Committee.

Mr. Bonacic, who wants at least two casinos in his Hudson Valley district, was pleasantly surprised by Mr. Cuomo's announcement. But many city-based lawmakers and lobbyists sat in shock.

They won't be still for long, however. As a murky process to fulfill the governor's vision for expanded gambling plays out in 2013, big-money interests will be vying to get a piece of the action—or to keep any new casinos far away from their own.

Mr. Cuomo plans to initially build three "destination" resorts upstate that would drive tourism to economically depressed regions. Before that can happen, a proposed constitutional amendment to legalize casino gambling must pass the Legislature for the second straight year ahead of a statewide referendum in November.

Gaming experts say the plan makes sense for Mr. Cuomo, who will be able to extract more concessions from upstate casino bidders if a New York City competitor is not siphoning away customers. However, Mr. Cuomo has not completely ruled out a casino in the city—he just does not want any of the initial three built in the five boroughs. Four more could be established under the amendment, and a spokesman for the governor said the city could be a possible destination for them.

Many lawmakers say the most likely casino destination is the Catskills or other locales accessible by Metro-North or Amtrak. Mr. Cuomo has already suggested ruling out a new casino in western New York, where the Seneca Nation has an exclusivity compact with the state.

"A casino would have to be on the Hudson River, or a train you could take to the Catskills," said Assemblyman Gary Pretlow, chairman of the chamber's Racing and Wagering Committee.

Assembly speaker appeased

Mr. Cuomo's proposal is likely to appeal to leaders in the Legislature. Assembly Speaker Sheldon Silver—who has the power to singlehandedly block Mr. Cuomo's plan—has consistently opposed having casinos in Manhattan. State Senate Republicans have proposed using casino taxes for property-tax relief and funding underprivileged, rural schools—similar to Mr. Cuomo's plan.

But rank-and-file legislators from both chambers are concerned that Mr. Cuomo will have them vote on a constitutional amendment allowing full-scale casino gambling without key details spelled out. A number are already pushing for a simultaneous vote on a bill indicating exactly where the casinos will be sited, the percentage of winnings that casinos must pay in tax, and where that revenue would go.

Those details are crucial to some upstate members of the Senate Republican conference, who fret that existing racinos in their districts would lose customers to new casinos. Operators of the nine racinos—which feature armless slot machines and lack human dealers—are hoping the state will simply turn seven of them into full-fledged casinos.

"I can't imagine any legislator voting for the amendment when they don't know where the casinos are going," said Gary Greenberg, an owner of the Vernon Downs racino. "Lawmakers are very supportive of their own racinos."

Mr. Cuomo's spokesman said the timing of votes on a constitutional amendment and legislation containing specifics had not been determined. But the administration is offering at least a few details of its plan.

According to Mr. Cuomo's spokesman, a bill would pass the Legislature this year to create regions around the state that would compete for casinos. A gaming commission would select the winning regions and casino operators through a competition, though Mr. Cuomo has said he doubts those selections could be made before a November statewide referendum.

A local community's support for casino gambling would be a factor in the commission's selections, according to the Cuomo spokesman, but actual up-or-down referendums would not be held in those communities.

The Oneida Indian Nation, which operates a full-scale resort casino in central New York, has provided seed money to a new group advocating for local communities to have veto power over casino projects. Casino operators in Connecticut, Pennsylvania and Atlantic City, N.J., also stand to lose business to New York competitors and could seek to stymie the governor's plan.

Meanwhile, an army of lobbyists is ready to guide local and out-of-state clients through the murky process. Many of the state's 10 largest lobbying firms have been retained by one casino operator or another—with some trying to land business and others perhaps trying to trip up competitors.

The high-profile players include Genting, the Malaysian giant that operates the highly successful Aqueduct racino in southeast Queens. The company has retained public-affairs firm SKDKnickerbocker, led in part by a former top campaign aide to the governor and longtime associate, Jennifer Cunningham. Genting has also hired top Albany lobbyist Patricia Lynch, a onetime senior aide to Mr. Silver, and well-known lobbyists John Cordo and Brian Meara.

One hope for the company is that Mr. Silver has now been pacified by Mr. Cuomo that a casino won't be built in Manhattan—allowing Mr. Cuomo a stronger bargaining position to push for one in Queens. Southeast Queens lawmakers also argue that a casino is exactly what's needed for economic relief in an area hit hard by Superstorm Sandy, another priority for Mr. Cuomo.

'Jobs right now'

"We not only have everything built already and ready to go, but because of Sandy, we need the jobs right now," said Assemblyman Phillip Goldfeder, who represents Far Rockaway.

Other gambling behemoths like Wynn Resorts and Las Vegas Sands are also in the mix. They specialize in the type of destination casinos that Mr. Cuomo covets. Unlike Genting, they are not yet licensed in New York and don't have a foothold or track record here.

Wynn has retained Albany lobbying firm LJM Rad, whose principal lobbyist is Jerry Weiss, a deputy to former Gov. Mario Cuomo. Las Vegas Sands' efforts are being steered by Chris Lehane, a former aide to Andrew Cuomo and Al Gore. And MGM has signed top lobbyist Suri Kasirer.

Even operators that may not have much interest in New York are gearing up, including Las Vegas-based Boyd Gaming, which owns the popular Borgata casino in Atlantic City and has hired New York lobbying firm Malkin & Ross.

If the constitutional amendment gets lawmakers' approval by August, it would then face another hurdle: passage by a majority of voters statewide in November. Voting would be heaviest in the city, where there is a mayoral race, and political observers speculate that Mr. Cuomo calculated that passage would be easier if initial plans did not include a casino in the five boroughs. Polls show a somewhat narrow majority of New Yorkers supporting full-scale gambling in the state.

Even in November, the big-money gambling industry may not know which side of the fight to bet on because the exact locations of casinos and their operators will likely be unknown.

"Without all the specific sites being known," said one operative working for a gambling interest, "I could easily see opponents of a referendum running an ad saying there was a secret plan to put a casino in New York City."


 

 

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