After considerable study and analysis, the members of the New York Gaming Association (NYGA, which is comprised of the state’s racetrack casinos, known as “racinos”) believe that the proposed “Upstate New York Gaming Economic Development Act of 2013″ will not have the result desired by the legislation’s supporters.
The new casinos authorized by the legislation (and referendum) will instead simply cannibalize as much as 85% of the state’s current gaming market, shifting revenue and jobs from one facility to another but resulting in no real increase in new jobs and an annual loss of $1 billion of tax revenue for education.
The proposed legislation would permit the creation of new, Las Vegas style casinos in close proximity to the existing racinos. These new casinos will have new, high tech slot machines (which are much more attractive to customers than Video Lottery Terminals), table games, the ability to extend credit to customers, higher wager limits without withholding winnings, a tax rate as low as 25%, and fewer safeguards than exist under current law.
Racinos currently pay an effective tax rate of 67% to the state, so when their current revenue shifts to the new casinos paying just 25% in taxes, the net result will be a major loss of tax revenue used for education. As a consequence, it is not possible for NYGA to support the current proposed legislation. We believe that the only way to prevent the loss of major tax revenue and the stagnation of jobs is by permitting the five racinos not located near current Tribal to operate under the same rules proposed in the new legislation.
This would prevent the loss of tax revenue for our schools, result in the immediate creation of tens of thousands of new jobs, and spark billions of dollars of new investment. The location of the remaining two Las Vegas style casinos should await the outcome of the pending arbitration between the state and the Seneca Nation. In no event must the resolution of the Seneca’s continued non-payment of (1) exclusivity fees and (2) certain expenses incurred by the State to oversee the Seneca casinos harm the three racinos located in Western New York.
In addition, the three racinos should be afforded the same product mix rights as the rest of the racinos in the State in order to maximize New York education dollars. We believe this is the right and best solution for taxpayers, schools, and New York’s economy.
With just eight days remaining in the current legislative session, rushing to pass legislation that fails to fully understand the actual impact of the bill seems misguided. We hope that the legislature will treat this issue with the prudence it deserves.