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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Cuomo’s cronies

May 1, 2013 10:59 am

Remember how Gov. Andrew Cuomo promised to clean up the corrupt culture in Albany when he took office in 2011?

Well, fuggedaboutit.

Turns out, Cuomo is engaging in the same patronage practices as many of his predecessors, The New York Times reported. One state agency in particular, the Empire State Development Corporation, has hired 49 people since Cuomo took office. Nearly one third of those hires were political associates, donors, and friends, or their relatives, The Times found.

One recent college graduate got a $45,000 a year job as a special projects associate. His father happened to be on Cuomo’s transition team and has donated $28,000 to the governor’s campaigns over the years. Another 23-year-old graduate landed a $75,000-a-year job shortly before his father gave $25,000 to Cuomo’s re-election campaign.

The office claimed The Times was trying to “create a scandal.” As if all of Cuomo’s cronies just happened upon these jobs while searching Monster.com.

Think this is bad? Just wait to see who gets the jobs, contracts and lucrative licenses if commercial casinos are legalized. In fact, the uncle of the college grad who received the $75,000-a-year job is a financial consultant at Moelis & Co., which the Cuomo administration hired as an adviser on gambling matters.

Cuomo initially talked a good game about cleaning up Albany, but he has avoided pushing measures that could change the culture, such as term limits, reducing the influence of lobbyists and taking away pensions for elected officials convicted of crimes.

Consider that Cuomo never discussed casinos before getting elected. Just eight months into his tenure he raised the idea of changing the state constitution to allow casinos. Since then much of the process has played out behind closed doors, as the plan changes to fit the political will and influence of lobbyists. That’s the Albany way. Only Cuomo, Senate Republican leader Dean  Skelos, Sen. Jeff  Klein of the four-member Independent Democratic Conference and Democratic  Assembly Speaker Sheldon  Silver are privy to the real negotiations.

It’s an insiders games. That’s why the insiders are getting dealt all of the good cards.

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Casinos coming to Florida?

April 29, 2013 9:15 am

Florida lawmakers are following the classic playbook to build the case for more casinos in the Sunshine State.

First use taxpayers’ money to conduct a study about gambling. Make sure study touts benefits of gambling while playing down or ignoring the social and economic costs. Use that study to support votes to allow more casinos.

Call it the Casino Confirmation Bias. The Legislature recently agreed to spend nearly $400,000 to “comprehensively examine” gambling issues. The Legislature then hired Spectrum Gaming Group to conduct the study. Spectrum specializes in promoting gambling and casinos.

As Scott Maxwell writes in the Orlando Sentinel: “Gee, I wonder what it will find.”

Maxwell says that hiring Spectrum to study gambling is like “contracting Anheuser-Busch to do a study on whether drinking beer is OK.”

Of course, the casino lobbyists are the main drivers behind more gambling in Florida. Efforts to bring Las Vegas-style casinos to Florida failed last year but they remain undeterred.

As Maxwell writes: Before he was elected, Gov. Rick Scott “promised the Baptists that he would fight gambling. Yet right after he was elected, Scott jetted off to Vegas to meet with casino magnate Sheldon Adelson, who wants to build casinos in Florida — and who later cut a $250,000 check to Scott’s campaign. And now, according to the Sunshine State News, Adelson’s lobbyists are telling legislators they should start giving casinos tax breaks and incentives.”

The casinos aren’t even legal and already the lobbyists are working on tax breaks. That should give some indication as to what Spectrum Gaming’s study will find.

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Steve Wynn’s toughest hand?

April 26, 2013 10:08 am

Casino mogul Steve Wynn’s company is under investigation for violating the Federal Corrupt Practices Act stemming from its efforts to enter the Macau market. Wynn is tangled in a messy lawsuit with a former business partner in which both men have lodged bribery allegations. He once poked an elbow through a Picasso painting, which he recently sold. Wynn also and faced off with a kidnapper who took his daughter and paid a ransom before the men were caught.

But Wynn now faces his biggest battle with his ex-wife, Elaine.

Elaine Wynn filed a lawsuit in federal court seeking to sell her shares of Wynn Resorts, which she was awarded as part of their $750 million divorce. The sale of half of her 9.6 percent stake could trigger a series of events that would threaten her ex-husband’s control over the $13 billion casino company and possibly his personal fortune, reports BusinessWeek.

If Wynn’s ex-wife wins in court, that may force the company to buy back $3 billion in bonds. The company is already deep in debt and would likely have to borrow more money to finance such a buyback. That could lead to a lower credit rating and complicate the completion of a $4 billion casino project in Macau. Despite Wynn’s problems, it is tough to feel sorry for a billionaire who made his fortune stripping wealth from gamblers, many of whom can least afford to gamble.

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Casinos: ‘dime a dozen’

April 22, 2013 1:53 pm

Lawmakers and casino operators tout new gambling halls as a way to attract tourists and boost the economy. But a sports columnist in Canada argues against adding a casino in Toronto because they are a “dime a dozen.”

“Where’s the uniqueness? Where’s the lure to tourists when practically every American already has a casino nearby?” writes Dave Perkins of the Toronto Star.

Perkins points out that many casinos lose money. Others are in business with gangsters. And the arguments by lawmakers are prepared by casino lobbyists.

“Despite claims a casino is a cash cow, many of them lose money,” Perkins writes. He pointed out that Caesar’s posted a fourth-quarter loss of some $500 million and MGM has a dubious history. “Do a little Internet digging and look at the way it went about trying to get into business with the notorious Stanley Ho and his daughter Pansy in Macau. Google the words ‘New Jersey special report Pansy Ho Macau’ and pull up a chair. Read it and then say you want to do business with this company.

“Locally, politicians have the debate framed for them by paid lobbyists working for casino companies who are so honest they do things like run phantom “job fairs” for positions that don’t actually exist.”

Another story out of Canada points out that officials pointed to increased crime problems from casinos a decade ago. But now new officials pushing for a casino dismiss crime issues.

 

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Albany gets back to business

April 18, 2013 11:28 am

After a two-week break, New York lawmakers returned to work (for three days) amid the stench of more scandal as a handful of their colleagues were busted for a variety of corruption charges. So how do the honorable lawmakers in Albany deal with the scandal?

“Dark humor and stiff drinks,” reports The New York Times.

Apparently, the gag running through the halls of the Capitol is for lawmakers to frisk their colleagues to see if they are wearing a wire after a senator was caught on tape arranging a bribe. “You run into them, and you feel them up and down,” Assemblyman David I. Weprin, a Queens Democrat, told The Times. “You’ve got to make light of it some days.”

If that doesn’t work, start drinking. The workweek in Albany usually runs Monday to Wednesday. That explains why on a Tuesday night legislators, staffers and reporters gathered at Elda’s, a friendly bar in the Center Square neighborhood, to discuss their, ah, four-day weekend plans.

But in general it was back to business as usual. Assembly Speaker Sheldon Silver, a Manhattan Democrat, held a closed-door pep talk to tell members “a few bad apples” would not ruin their reputation. Meanwhile, one of the accused wrongdoers, attended a brief Senate session and sat in the so-called “crooked seat,” reserved near the chamber’s doors for lawmakers who are in trouble with the law. (The fact that there is a reserved seat in the corner for lawmakers in legal trouble is a sure sign that Albany’s moral compass is askew.)

Indeed, one of the top items on lawmakers’ agenda is working behind closed doors to hammer out a plan to change the state constitution in order to allow commercial casinos. That process is already off to a dubious start, considering one casino operator cut a deal with Gov. Andrew Cuomo to build a $4 billion convention center in hope of securing exclusive casino rights to New York City. That deal failed but that has not stopped the lobbyists and money from casino interests flowing into Albany. By the time the casino process ends, Albany may need more crooked seats.

For those not keeping score at home, here’s a quick update on the recent corruption arrests:

* Malcolm A. Smith, a Democratic senator from Queens, was charged with trying to bribe his way into the New York City mayor’s race.

* Assemblyman Eric A. Stevenson, a Bronx Democrat, was accused of taking bribes from developers of adult day care centers.

* Assemblyman Nelson L. Castro, also a Bronx Democrat, resigned in a deal with prosecutors under which he had secretly recorded conversations with other lawmakers to avoid prosecution on state perjury charges.

* Assemblyman William F. Boyland Jr. a Brooklyn Democrat, was indicted for bribery and other alleged crimes.

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