And then there were three.
The Seneca Indian Nation and Gov. Andrew Cuomo announced a revenue-sharing deal Thursday that creates an exclusive zone in western New York for the tribe’s casinos, limiting the possible placement of three upstate non-Indian casinos under the governor’s proposed siting legislation to the Capital Region, the Southern Tier and the Catskills.
The announcement ends an ongoing disagreement between the state and Senecas, which stems from the introduction of video slots at harness tracks in western New York. After the video slots were introduced, the Senecas began withholding revenue owed the state from its casinos, arguing that the racinos violated their exclusive gambling territory.
Two other New York tribes operating casinos, the Oneidas and Mohawks, reached their own revenue-sharing agreements with the state in May, receiving exclusivity zones in central New York and the North Country, respectively.
Under the casino siting plan introduced by Cuomo, the creation of three exclusive zones for the Indian tribes ensures that at least one license to operate live-table games will be given to the Capital Region, which includes Albany, Saratoga, Fulton, Montgomery and Schenectady counties. This guarantee is regarded as a win for the Saratoga Casino & Raceway, the only announced bidder for a casino license in the Capital Region.
Despite plans to compete for a casino license, Saratoga Casino & Raceway Vice President of Marketing and External Affairs Rita Cox said they have problems with the current version of Cuomo’s proposal to award the three upstate casinos.
The concerns of the Saratoga racino, she said, were those espoused earlier in the week by the New York Gaming Association, which represents the state’s nine racinos. The group predicts that the three upstate casinos would cannibalize the business of existing gambling options.
Because Cuomo’s plan would tax a much smaller percentage of gaming revenues at the new casinos compared to the racinos, NYGA President James Featherstonhaugh, who is director of the Saratoga racino, said racinos wouldn’t be able to compete in the future. “You’re a dinosaur walking toward a tar pit,” he said of racinos in the governor’s plan.
Featherstonhaugh said racinos also oppose the casino license bidding process from Cuomo because of how capital investments are considered. A bid is judged based on proposed investment into a project, with racinos credited for their last three years of investments. This means that the initial investment made by the Saratoga racino more than a decade ago wouldn’t be considered as part of its bid.
Saratoga County Chamber of Commerce President Todd Shimkus expressed his own concerns about what the governor’s casino plan could mean for the local racing industry.
The bill doesn’t require the first three upstate casinos to support NYRA’s operating budget, purses and horsemen. Only one racino, the Resorts World Casino in Queens, currently supports NYRA and they might see a drop in revenue due to future competition from New York casinos with live-table games.
One provision the chamber does like in the bill is the host-payment language, Shimkus said. He stressed that the governor’s proposal isn’t beyond repair, saying, “It can be fixed.”
Until there are changes, Shimkus added, “We are talking to anybody who will listen.”
Featherstonhaugh was confident that the bill was undergoing changes, including a review of tax rates, which might make it possible for racinos and new casinos to compete. “[The bill is] under active negotiation and changing as we speak,” he said.
Thursday’s agreement was a bit surprising, considering that Cuomo recently said he didn’t expect a deal to be reached with the Senecas and that he planned on opening western New York to a possible non-Indian live-table casino. Additionally, Seneca Nation President Barry E. Snyder accused the governor of negotiating like a “bully.”
“I apologize for that,” Snyder said on Thursday.
The deal requires the Seneca casinos to pay $135 million annually to the state and make payments to the nearby counties as well. Racinos in the exclusivity zone will come under new marketing and operations restrictions as the result of this agreement.