Star Gazette

State lawmakers and Gov. Andrew Cuomo are in high-stakes debate over how many privately owned casinos should be allowed in upstate New York and where they should be located.

With just five session days left before the Legislature breaks for the year, Cuomo is considering a change to his proposal that would increase in the number of potential casinos in upstate from three to four, lawmakers said.

He is also in discussions over how to make the tax rates for the new casinos more on par with the nine racetracks that currently have video-lottery terminals.

“Negotiations go on every day,” said Senate Racing and Wagering Committee Chairman John Bonacic, R-Mount Hope, Orange County.

In legislation proposed last week, Cuomo called for three casinos to be located upstate that would have exclusivity in New York for five years. A state panel would choose the specific sites and developers, and Cuomo has said it would be a boon for the region.

After the five years, another four could be located in New York, with at least a few in the New York City area. The first three would likely be sited in the Albany area, Catskills and Southern Tier.

Cuomo would like a deal for the plan before the legislative session ends June 20. If approved, voters would decide at the polls in November whether to change the state constitution to allow for private casinos.

Lawmakers and the nine racetracks with video-lottery terminals want changes to Cuomo’s bill.

Assembly Racing and Wagering Committee Chairman Gary Pretlow, D-Yonkers, said the tax rates that would be offered to the casinos are far more generous than what the so-called racinos currently pay.

Racinos currently pay a tax rate of about 67 percent of revenue to the state, and the money goes to fund education. The new casinos would pay 25 percent.

“The tax rate is such a difference from what the casinos are going to be paying versus what the racinos are paying right now, there has been to some kind of matching,” Pretlow said.

The racinos said that the new casinos would hurt their facilities, which have growing significantly in recent years. New York’s lottery revenue reached a record $9 billion last year, in part because of growth at the racinos.

“Rushing to pass legislation that fails to fully understand the actual impact of the bill seems misguided,” said a statement from the New York Gaming Association, the lobbying arm representing the tracks. “We hope that the legislature will treat this issue with the prudence it deserves.”

Jeff Gural, the owner of Tioga Downs in the Southern Tier and Vernon Downs near Syracuse, said he would like to invest $60 million into the Tioga Downs facility to add a hotel and entertainment venue if it could win a bid for a full-scaled casino.

But Cuomo’s proposal would require a $50 million licensing fee for a casino, and that’s too steep a price, Gural said.

“We all support the governor’s desire to create jobs upstate,” Gural said. “However under his proposal, it would be impossible for us to bid on a license because we can’t afford to pay a $50 million license fee.”

The issue of private casinos in New York is complicated by gaming compacts with Indian casinos. Cuomo reached gaming compacts last month with the Mohawks in northern New York and the Oneidas in central New York. They will have exclusive gaming rights in their regions.

The Senecas would have exclusive gaming rights in western New York if they settle their gaming dispute with the state, and their territory includes the Rochester area and parts of the Finger Lakes. The Senecas have withheld more than $550 million from its casino operations, and the dispute is in arbitration.

Bonacic introduced legislation last month that would immediately authorize seven casinos in New York—with up to three in the Catskills and one each in Westchester County and Queens. The other two would go to the Albany area and the Southern Tier, including potentially Tompkins County or Wayne County.

Bonacic said there are already developers interested in three casinos in the Catskills, the once booming destination for New York City tourists. He said if all seven locations were identified, the referendum would more likely pass.

“We’re pushing for seven licenses and name the regions because we believe the more transparency, the more intelligent the voter will be to vote yes,” Bonacic said.

Cuomo has argued that naming all seven locations would make the upstate casino contracts less lucrative because the bids would be likely focused on the New York City area.