Setting the Agenda: Gambling & Casinos

City & State

The future of full-fledged casino gambling in New York State is dicey.

This year saw some positive signs for the gaming industry as Gov. Andrew Cuomo signed the Upstate New York Gaming Economic Development Act in late July. The measure would bring four full-fledged casinos to parts of upstate, a development that would potentially spur a significant influx of revenue for education aid and property tax relief for the state.

The act only goes into effect, however, if voters approve it in a ballot referendum this fall—a risky proposition given how few New Yorkers are expected to vote in November and how many areas of the state will be excluded from casino development.

Western New York (including Rochester and Buffalo) is off the table for casinos because it sits in a Seneca Indian Nation exclusivity zone. Much of Central New York (including Syracuse) and the Adirondacks are similarly disqualified as part of Cuomo’s exclusivity agreements with the Oneida Indian Nation and the Saint Regis Mohawk Tribe, respectively, who run their own casinos in those regions.

Long Island, too, is off the table, though it could get two video lottery terminals, or computerized slot machine parlors—one in each of the Island’s two counties, Nassau and Suffolk—should the measure pass.

New York City and the suburban counties directly to the north of the city (Westchester, Rockland and Putnam) are also barred from full-fledged casino gaming for a period of at least seven years.

Assemblyman Philip Goldfeder, who represents Queens, was disappointed to see and his district’s own Resorts World Casino and Aqueduct Racetrack cut out of the conversation for Class III, full-table gaming licenses.

“Last session, week in and week out, I met with the governor’s office and talked to the staff about the potential for revenues for New York State. My feeling was you had to include New York City in this conservation,” Goldfeder said. “Leaving Aqueduct out of the mix, I think you’re doing the state a tremendous disservice.”

Nonetheless, Goldfeder supports the referendum and hopes his constituents will do so too, explaining, “You don’t let the perfect get in the way of the good.”

State Sen. Joe Addabbo, whose district also includes Resorts World Casino, thinks the New York City mayoral and comptroller candidates, who have largely been silent on the issue, could influence New York City voters to support the statewide initiative.

“Maybe after the primary it’ll become an issue, but if they don’t make it an issue, I’m guessing some outside parties will sink some money into advertising,” Addabbo said.

Until the referendum vote, the future of casinos in New York is in the air. A Siena College poll conducted in early August showed split support for the measure, 49 to 42 percent, with slightly higher support in the Long Island suburbs—52 to 39 percent. But Siena pollster Steven Greenberg is cautious about the results, which sampled registered voters, not a smaller pool of likely voters.

“This poll shows the sentiment about how registered voters feel about the issue, not about how those who show up in November will feel about the issue,” he said. Many elections in New York take place in even years, so a hodgepodge of counties and cities with competitive races will have a bigger impact on the referendum, including in New York City, which has a closely watched mayor’s race.

Should the referendum pass, the three zones that are designated for licenses for up to four total casino resorts are the Catskills/Mid-Hudson Valley, Saratoga/ the Capital Region and the Southern Tier. The Catskills are the presumed favorite of the three regions to pick up the fourth casino, owing to its proximity to New York City, the hospitality infrastructure left over from the Borscht Belt summer resort heyday of the mid–20th century, and the clout of state Sen. John Bonacic, who in addidtion to representing the Catskills chairs the Racing, Gaming and Wagering Committee.

If the referendum succeeds, filling out the state’s seven-member gaming commission, of which there are currently only four members, is the next order of business. The three remaining slots will be appointed by Senate Majority Coalition Leader Dean Skelos, Assembly Speaker Sheldon Silver and Cuomo after it is fully formed. The commission would be responsible for appointing a site selection committee, which would accept applications for the casino licenses.

“I’m pretty sure the governor knows who they are, but it doesn’t make sense to put the people there unless they’re needed,” Assemblyman Gary Pretlow, chair of the Racing and Wagering Committee, said of the gaming commission appointments.

If voters support the referendum, Bonacic expects that “we’ll know who [the applications] are granted to within 12 months. It’s possible we’ll know by the end of next session.”

Tax rates on the hypothetical New York casinos would be markedly higher than those in neighboring Connecticut and New Jersey, but Pretlow believes there will be healthy competition for casino development in every region. “You’ve not heard anyone complain about our high tax rates,” he said. “No one is complaining, because they’re all making money, and they’re making good money.”

Should the referendum fail, racing and wagering in New York State will largely continue as it is. The designated casino zones would get video lottery terminals as consolation, and Long Island will be up for three VLT facilities in place of the originally promised two. However, Bonacic doesn’t believe that the down year for statewide elections will hurt the referendum’s chances.

“Upstate is energized; the chambers of commerce, the tourism people—they’re all getting this message out, and they’re excited about this opportunity,” Bonacic said. “The key is the New York City vote. We need the governor to go down there and say why this is important.”

Added Pretlow, “We can’t say anything about what’ll happen next until November.”

Empire City Casino at Yonkers Raceway
By Taryn E. Duffy
Director of Public Affairs

Empire City Casino is one of the most successful entertainment venues in the state and Northeast region. A recent $50 million expansion will take this success to even greater heights, introducing two new restaurants, a dramatic new entrance and modern gaming floor featuring 5,300 slots and electronic table games to more than 8 million visitors annually.

This success has generated over $2.5 billion dollars for schools, state and local governments and the racing industry in just seven years. Empire City directly employs more than 1,500 people, represented by 15 unions, and sustains another 2,000 regional jobs. In 2013 alone, Empire City donated over $1 million in philanthropic gifts to community charities and victims of Superstorm Sandy. All of this activity generates hundreds of millions of dollars annually to support the regional economy.

The outcome of the 2013 referendum on casino gaming will have a significant impact on Empire City’s priorities for 2014 and beyond. While the constitutional amendment will authorize seven commercial casinos in New York, only four licenses will be issued over the next seven years, and all will be located in upstate regions.

Empire City supports the amendment and will look to secure a license to expand its gaming opportunities when a downstate license becomes available. As an established gaming venue, Empire City is well-positioned to build on its success as a regional economic engine for growth and major supporter of education and other critical government programs.

New Yorkers continue to spend billions of dollars in neighboring states such as New Jersey, Connecticut and Pennsylvania at casinos offering full gaming entertainment, currently prohibited in New York. As a result, the state of New York is losing critically needed revenue, while competition continues to increase in the region.

The addition of new casinos in New York will help keep gaming dollars here and create jobs New Yorkers need. Empire City Casino has proven itself to be a premier racing and gaming facility, generating billions in revenue for the state and local communities. It is in the state’s best interest to ensure that any new gaming facilities do not jeopardize this record of success.

Tioga Downs
By Jeffrey Gural
CEO of American Racing and Entertainment

Our goals at Tioga Downs are simple.

We are hopeful that the casino referendum will be passed by the voters in November, at which point we will immediately begin work on our expansion project.

Phase one will be the construction of a new 300 car parking garage. Phase two will depend on whether the referendum passes, and if it does, whether we receive the license for the Southern Tier region.

Assuming it passes, we will then complete work on the garage and apply for a casino license.

If we are successful, we would then move forward with a 143-room hotel with a convention facility, spa and restaurant, as well as an expansion of the casino itself so that we can add poker and table games. If we do not receive a license, obviously, we would probably build something smaller, depending on how close our competition is. If the referendum does not pass, we would then complete the garage, and about 90 days later we would start work on the hotel—which, again, might be scaled back, depending on the economic outlook.

We would also hope to convince the gaming commission to allow all of us to offer more free play, which we think would generate more revenue for education.