New York casino deal falls apart

June 4, 2012 10:59 am

Now that Genting, the Malaysian gambling giant, has pulled out of a deal to build a $4 billion convention center next to its slots barn in Queens, Gov. Andrew Cuomo is searching for a new sucker, er, partner.

The New York Times reported that “uncertainty surrounding Cuomo’s efforts to push through a constitutional amendment to create a framework for casinos in the state made it difficult to reach a deal.” What uncertainty? It seemed like the deal was getting rammed through with little or no public debate. The other problem is this: Genting’s desire for exclusive gambling rights in New York City also hampered the talks, according to The Times.

That detail shows that this proposal was always more about a casino than a convention center. Claims that the project would create 10,000 jobs seemed dubious at best. Who would want to travel an hour from Manhattan to a convention in Queens? Of course, it never made sense for Cuomo to be negotiating privately with a casino company while the state had yet to legalize commerical casinos. Cuomo is now claiming he will have an open process. Right.

Indeed, Cuomo said other casino companies are interested in coming to New York, including MGM Resorts. Of course, all the problems that bogged down the Genting deal remain. As The Times reported: “The breakdown of the Genting plan also highlights the challenges confronting gambling companies now: the industry has matured to such a degree, and casinos have so proliferated in the Northeast, that competitors are desperately seeking to take market share from one another or to block their entry altogether.”

Look for the other casino companies to push to locate in Manhattan, a move Cuomo and other lawmakers have previously resisted. But when it comes to gambling, lawmakers are often quick to get behind whatever deal is on the table. Update: Cuomo and others signaled they are open to casinos in Manhattan.

As for Genting, the gambling company has had two recent major setbacks in its effort to expand gambling in the U.S. A proposal to build a giant casino resort in Miami failed to gain political support. The collapse of New York deal sent shares in Gentings tumbling. Genting spent nearly $900,000 on lobbying and campaign donations in New York last year, according to an analysis by the New York Public Interest Research Group. That’s a drop in the bucket; a New York casino would like take in more a $1 million in gambling revenue a day.

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