Crunch time for NY casinos

June 18, 2013 1:17 pm

Lawmakers in Albany are expected to vote by Thursday on a bill to amend the state Constitution to allow commercial casino in New York.

That can mean only one thing: lots of last-minute wheeling and dealing between lawmakers and gambling industry lobbyists. No surprise, the negotiations are taking place in secret. What is surprising is that the negotiations are getting messy.

Las Vegas casino operators don’t like Gov. Andrew Cuomo’s plan to limit casinos to upstate at least for the first few years. The Vegas operators all want to be in New York City. Meanwhile, the racetrack operators don’t like Cuomo’s plan either because the tax rates are much higher for track operators than the casinos.

No worries: Cuomo appears willing to say and do whatever it takes to get a casino bill passed. He has already cut deals with Indian casinos. As the expected vote approaches, Cuomo continues to change his proposal for the number of casinos and the locations in an effort to win support from enough lawmakers.

First it was seven casinos. Then three. Last week, Cuomo said he would consider four casinos. Hours later state Sen. John Bonacic, who chairs the Senate Committee on Racing, Wagering and Gaming, suggested five casinos.

Even if lawmakers pass a casino bill this week – look for it to happen late at night on the last day of the session – it still faces an uphill fight. The New York State Gaming Association, which represents the racetrack slot parlors, said it would not support Cuomo’s bill. But secret negotiations continue with the racetrack operators.

A Quinnipiac poll released earlier this month said 48 percent of voters support changing the Constitution to allow casinos. But opposition to the measure is strongest in New York City. That could pose a problem when the questions gets put before voters in November since the mayor’s race in New York City could generate a large turnout.

No problem, Cuomo has yet another backup plan. If the casino bill fails, the governor is considering allowing more slot parlors in New York City. Cuomo’s drive for more gambling may be the result of the river of money flowing into Albany from gambling interests. In 2011 and 2012, gambling interests spent almost $18 million on lobbying and political contributions, up 36 percent from the previous two years, according to Common Cause.

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N.Y. casino plan: a moving target

June 14, 2013 10:39 am

With just days to go before the legislative session ends in Albany, lawmakers and lobbyists there are still fighting over how many casinos to enable.

First Gov. Andrew Cuomo proposed seven casinos. Then it was three. The latest odds place the number of casinos between four or five – with more to follow. Perhaps Cuomo & Co. should take bets from public.

Or just pick a number out of the hat. That would amount to the same amount of thought and analysis going into how many casino New York needs or can support. The process has nothing to do with policy or economics. It is all about the politics of trying to please competing gambling interests.

The same lack of analysis is going into setting the tax rate for the casinos, which is also a moving target as the deadline approaches for a second vote – which will likely occur late at night on the last day of the session with little debate – to change the state Constitution to allow commercial casinos. Such basics as the number of casinos and tax rate should have been decided long ago and not left up to last-minute backroom negotiations. But as is often the case, gambling legislation is done in secret and on the fly with little thought beyond who has the most juice to get what they want.

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Racinos not in the money?

June 12, 2013 8:56 am

The secret, backroom negotiations taking place in Albany surrounding the legalization of casinos do not appear to be going too well for the racetrack operators.

The racetracks say Gov. Andrew Cuomo’s current – but often changing – casino plan will cost taxpayers millions of dollars and not create many jobs. The racetracks argue that the addition of Las Vegas-style casinos will just cannibalize money spent on gambling. The racetracks want slots at the tracks, or racinos.

Funny how gambling backers quickly raise the real problems with gambling when things don’t go their way. An even bigger surprise is that Jimmy “Feathers” Featherstonhaugh does not appear to be getting his way in Albany. Feathers, president of the New York Gaming Association, is a powerful lobbyist and longtime Cuomo family friend. He also owns a stake in the Saratoga Racetrack.

As is often the case, gambling factions turn on each other as the negotiations process. But the arm-twisting is not over in Albany. Stay tuned.

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Cuomo’s secrecy campaign

June 11, 2013 8:23 am

So much for Gov. Andrew Cuomo’s promise to run the most transparent administration in state history.

Cuomo’s paranoia has gone so far his administration refuses to release a video his aides put together for an annual press dinner that pokes fun at his reputation for secrecy. The New York Times was forced to file a Freedom of Information request for the video. More than a year has passed and the administration has yet to release the video. Turns out that when it comes to secrecy, the Nixon and Obama administrations have nothing on Cuomo.

That doesn’t bode too well for getting the Cuomo administration to operate in the sunshine when it comes to any meaningful policy discussion such as his push to change the state Constitution to legalize commercial casinos. Much of that debate has taken place in secret among powerful lawmakers, lobbyists and casino operators.

If Cuomo can’t release an innocuous video that has already been shown to the media, then there is no reason to expect the governor to conduct any of the public’s business in public.

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Cuomo vote buying for casinos?

June 8, 2013 10:57 am

When it comes to getting casino deals done, history shows that governors will often do whatever it takes.

In Louisiana, former Gov. Edwin Edwards went to jail for extorting millions of dollars from companies seeking a casino licenses. Read all about it here.

In Pennsylvania, former Gov. Ed Rendell and former state Sen. Vincent Fumo twisted arms and brokered deals with lawmakers in effort to legalize slot machines.

In New York, Gov. Andrew Cuomo is busy crafting and re-crafting a bill to change the state Constitution in order to allow seven or three, or who knows how many casinos and where they will be located. The latest incarnation is a muddled mess that calls for three casinos in upstate New York and no casinos in New York City. A story in The Wall Street Journal kindly described Cuomo’s plan as a ”theory” designed to drive tourism upstate. Never mind the state is surrounded by casinos and there is no evidence that gambling generates tourism beyond Las Vegas.

But even more troubling, an attorney representing the towns of Vernon and Verona has asked state and federal prosecutors to investigate whether Gov. Cuomo’s deal with the Oneida Indian Nation amounts to illegal vote-buying. The deal Cuomo cut with the Oneida nation gives the tribe a monopoly on casinos in Central New York and up to 25,000 acres of tax-exempt trust land. In exchange, the Oneidas have to give the state 25 percent of their slot revenues and agree to support a constitutional amendment to allow non-Indian gambling in New York.

“It is such a blatant, transparent quid pro quo, and it’s there in black and white,” said Cornelius Murray. “You can’t go around commanding and requiring people to vote a certain way, stacking the deck on a constitutional amendment vote.”

Murray sent a letter to the U.S. Attorney’s Office, the state Attorney General, the state Inspector General and the Albany County district attorney asking for an investigation.

“We question whether the governor has used his power of his office to purchase the vote of the Oneida Indian Nation … by explicitly requiring the (nation) to support the constitutional amendment the governor so strongly favors in exchange for gambling exclusivity, tax exemptions and other considerations given to the nation,” the letter reads.

Cuomo spokesman Rich Azzopardi said the “claims lie well within the realm of absurdity.” Meanwhile, Cuomo’s tactics are being questioned by lawmakers and casino operators alike. Consider:

* A state senator said Cuomo’s casino bill lacks transparency and raised other questions about the murky process. “The Governor calls this an upstate economic development act,” said Sen. John Bonacic. “I do believe he wants jobs upstate. I am concerned, however, that his desired jobs will not materialize unless there is broader transparency and more specificity as to where all seven of the proposed casinos will go.”

* An executive at Las Vegas Sands, the biggest casino operator in the country, said Cuomo’s plan to prohibit casinos in New York City in an effort to drive tourism upstate lacks an understanding of the gambling market. The Sands does not plan to bid on a casino in upstate New York.

* One big donor is busy trying to rework Cuomo’s proposal in order to include more than one casino in the Catskills. The backroom maneuvering is just part of the cozy relationship between lawmakers and casinos. The result is often deals that get cut based strictly on politics and relationships, and have nothing to do with smart policy.

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N.Y. casino plan taking shape

May 24, 2013 10:37 am

Gov. Andrew Cuomo is quietly negotiating deals with Indian casino operators that will impact where commercial casinos will be located in upstate New York.

Cuomo plans to guarantee the existing Indian tribes exclusive gambling rights in their respective region in return for tax revenue the tribes have withheld from the state. The deals with the Indian tribes would preclude Rochester and Syracuse from getting a casinos.

As a result, Saratoga Springs and the Catskills have emerged as likely locations for commercial casinos. Other possible locations include Albany, Poughkeepsie, Orange County and Tioga County. Meanwhile, Senate lawmakers met behind closed doors – yet again – to hammer out a bill that would allow five upstate casinos, including up to three in the Catskills and two video slot machine sites on Long Island.

The secret negotiations underscore how much the politics of gambling continue to take precedent over policy. The closed-door negotiations are akin to mob families meeting to carve up territories.

In short, New York’s entire gambling policy is taking place in secret. It is being drafted on the fly by lawmakers and lobbyists meeting in backrooms in Albany. There are no public hearings. There are no studies. There is no input from INDEPENDENT gambling experts. Once all the key legislative leaders are on board with the plan, it will then get rammed past the public.

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Cuomo places his bet

May 10, 2013 11:55 am

A week ago Gov. Andrew Cuomo said he may delay a vote on legalizing casinos in New York. He scrapped that idea yesterday and said he would push for a public referendum in November to amend the constitution to allow commercial casinos.

Cuomo’s plan calls for initially limiting the casinos to upstate. Five years later the state would add casinos in New York City and elsewhere. What a half baked idea.

The problem is Cuomo views casinos as economic development. Casinos – like baseball stadiums – do not attract spin-off business or generate other spending. In fact, casinos do just the opposite. Casinos divert spending from other local businesses and strip wealth from a region.

To be sure, casinos generate tax revenue for the state. Maybe Cuomo considers that eceonomic development. But the idea that casinos will help revitalize economically distressed cities and towns is laughable. Take a look at how little impact 30 years of casinos has had on Atlantic City. Not to mention, casinos bring about even more social and economic costs to a region. In effect, casinos are a net negative.

Cuomo’s plan gets even goofier in five years when, under his proposal, the state would allow casinos in New York City and elsewhere. Those casinos would lure gamblers away and undermine the casinos upstate, leaving upstate struggling. This make no sense.

To be sure, Cuomo’s decision to push for a casino vote in November is really all about politics and when is the best time to get the measure passed. He has determined that 2014 offers the best chance to win. By limiting the casinos to upstate at least at first, Cuomo hopes the big number of New York City residents expected to turn out for the November mayoral election will not be as exercised about a casino issue upstate. He also doesn’t want the casino issue on the ballot next year when he is running for reelection.

Even still, polls show about half the state opposes casinos. So either way, it is likely to be a close vote.

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Cuomo’s bad bet

May 8, 2013 2:42 pm

Finally, a newspaper starts to raise some questions regarding Gov. Cuomo’s flimsy proposal to legalize commercial casinos. Kudos to the Albany Times Union for its strong editorial regarding the disingenuous way Cuomo and the legislative leaders in Albany have gone about trying to change the state Constitution in order to allow up to seven casinos across the state.

“Crossing one’s fingers and hoping for the best rarely works out well at the  blackjack table. It’s not a particularly good way to make laws, either,” said the Times Union, while noting Cuomo’s “disdain” for public debate.

One of the reasons why politicians can disregard voters and do as the please is the lack of a vigorous press that all too often plays the role of lapdog rather than watchdog. (A largely unengaged public is also to blame.) That’s what makes the Time Union’s editorial all the more welcome.

Albany’s newspaper of record raises a number of basic questions that have gone unanswered as Cuomo and other maneuver – mostly behind closed doors – to hammer out a casino deal. For starters, where will the casinos be located? Will local communities have any say in whether or not they want a casino? What is the tax rate for the casino revenue? Will the local communities get any of the revenue?

There are many other questions the paper did not raise. Changing the state Constitution is no small matter. Adding widespread gambling across the state impacts every resident, and creates economic and socials costs. Lawmakers and voters should know what those costs are before moving forward with such a major policy change.

At the very least, Cuomo should answer the many questions. There should be a public debate. The legislature should hold public hearings. An independent cost-benefit analysis should be done to determine if it is even wise to move forward with a major expansion of gambling.

The fact that Cuomo has not provided any information should be an indication why adding more casinos is a bad bet for New York. The public should demand some answers before any votes are taken.

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“Corruption in Albany”

May 7, 2013 10:52 am

A New York Times editorial urges the FBI to continue to do what Gov. Cuomo and other leading lawmakers have failed to do: clean up New York’s “rancid state government.”

The Times’ editorial comes after another New York lawmaker was busted, this time on charges of embezzlement and obstruction of justice. That makes three of the last four state Senate leaders who have faced criminal charges.

The New York Daily News reports that State Sen. John Sampson was charged with embezzling $440,000 and using some of the money to fund a bid for one of the highest law enforcement jobs in the city. When Sampson feared getting caught, he told an associate he could track down informants and “take them out,” according to an indictment unsealed Monday.

Sampson, who pleaded not guilty, was once one of the most powerful lawmakers in Albany. No surprise, Sampson was also at the center of a corrupt process to steer a lucrative contract to a slots casino in Queens. A state Inspector General’s report in late 2010 found that Sampson and other Senate Democrats steered the multi-billion-dollar contract to operate a racino at the Aqueduct Racetrack to the politically connected Aqueduct Entertainment Group.

The contract was eventually given to Genting, which later struck a secret deal with Cuomo to build a $4 billion convention center next to the racetrack in return for a license to run a full-blown casino. That deal has since fallen apart but Genting is still pushing to legalize casinos in New York. The Malaysian firm has hired several top lobbyists in Albany. (See stories about that corrupt process here, here and here.) Meanwhile, Cuomo’s casino plans keep changing, but most of the negotiations are taking place in secret.

Given the corrupting influence casinos have had on state capitals, the FBI may need to send more agents to Albany.

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NY casino vote delayed?

May 2, 2013 9:54 am

New York Gov. Andrew Cuomo may delay a statewide vote for commercial casinos because he fears a large turnout of city voters for this year’s mayoral race will reject the measure.

What do New York City voters know that upstate voters don’t?

Perhaps city voters are not bamboozled by the casino hype. Perhaps they better understand the social and economic ills that come with casinos, including more crime, divorce, bankruptcy and suicide. Perhaps they have seen that casinos have not helped struggling cities like Detroit, Philadelphia or Atlantic City. Or perhaps they don’t want cheesy casinos invading a world class city.

As usual, the public remains left out of the policy debate regarding casinos. Cuomo and other key political leaders spent the day behind closed doors discussing casino strategy. Rest assured Cuomo and his casino cronies have poll tested a casino vote this year against 2014. Just like the casinos that stack the odds in their favor, Cuomo seems to like his chances better in 2014.

Cuomo has already tried to mislead the public by initially proposing three casinos located upstate. They could tamp down opposition in the city. But if casinos are approved, the operators are going to push hard to locate in and around the five boroughs – especially in the lucrative market of Manhattan.

But having the casino measure on the 2014 ballot could complicate Cuomo’s reelection bid – especially if any opponent highlight how gambling is not economic development. In addition, casino operators in Connecticut, Atlantic City and Indian casinos in New York appear poised to fund a major campaign to keep casinos out of New York – not because of the negative impact of gambling but because they fear the competition. It should make for an interesting election.

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