Albany sells out to casino interests

June 24, 2013 11:33 am

Turns out, it only costs about $2 million to get Albany lawmakers to vote to change the state Constitution. That’s how much gambling interests spent in the run-up to a vote last week to legalize commercial casinos.

As expected, lawmakers voted to change the state Constitution in order to allow as many as Las Vegas-style casino in New York. The convoluted plan calls for four casinos located upstate initially and three casinos to be added later in and around New York City. Voters must first approve the casino referendum at the ballot box in November before it becomes law.

Gov. Andrew Cuomo called the casino plan part of a larger effort to revitalize the economies of struggling upstate regions. He said the legislation was “about gaming, and gaming is about tourism, and tourism is about jobs.” Cuomo offered no numbers to support his economic claim. Instead, Cuomo staffers resorted to alleged threats to get some lawmakers to vote for the bill.

Nor did Cuomo present a cost-benefit analysis that would look at the true costs of adding casinos. Perhaps that is because casinos will do very little to boost tourism upstate. Nor will the casinos provide any ripple effect to the local economy. Yes, the casinos create some jobs and generate tax revenue for the state.

But studies show the casinos will also lead to increased personal bankruptcy, crime, divorce and suicide. The casinos do not generate new spending but instead strip wealth from the local economy. One study has found that casinos generate $3 in costs for every $1 they bring in. (No coincidence that measures to combat corruption and prohibit campaign contributions from gambling interests were rejected by Albany lawmakers.)

Lawmakers do not care about that. New York, like other states, was driven to enable the misguided gambling policy by the river of campaign money that has flowed into the coffers of lawmakers. Consider that Cuomo never even mentioned casinos when he was running for governor. But eight months later he made casinos a major initiative of his administration.

Meanwhile, gambling interests have given nearly $2 million to statewide campaign committees, candidates and parties, according to an analysis by the New York Public Interest Research Group. That may seem like a lot of money to some but it is peanuts to the casino interests. In fact, the average casino takes in $2 million in revenue every two days. Most of that money comes from the pockets of the elderly, minority and working-class residents of New York - the very citizens Cuomo and lawmakers are supposed to protect not harm.

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.

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.

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.

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.

“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.

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.

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.

Cuomo’s uphill casino push

February 26, 2013 2:37 pm

Two polls conducted by a casino company show most New Yorkers oppose Gov. Andrew Cuomo’s effort to change the state Constitution to legalize casinos, Crain’s reports.

The polls show support for casinos drops the more voters know where the casinos will be located. No wonder Cuomo has refused to disclose the locations for the casinos.

Cuomo has tried to win support for the casinos by saying the first three would be located in upstate New York. Some thought this was an effort to win support of voters in New York City, who will dominate the polls in November because of the looming mayor’s race. But the polls also show many voters want a casino in the city.

Crains details the crazy politics of casino issue. Note that none of the debate in Albany is focuses on the social and economic impact of casinos. Yes, casinos generate taxes and jobs, but also lead to increased crime, divorce, bankruptcy, and suicide. Those are real costs that all taxpayers pay for regardless of whether they gamble. But those public policy implications don’t seem to matter to most lawmakers.

Cuomo’s shifting casino policy

February 12, 2013 9:35 am

First it was seven casinos and a giant convention center next to a racetrack in Queens. Then it was a phased in plan starting with three casinos located in upstate New York to help struggling regions. Make that four casinos upstate. Now, it’s casinos wherever lawmakers want.

When it comes to shaping New York’s gambling policy, Gov. Andrew Cuomo appears to be playing roulette. Spin the wheel and see what umber comes up. Initially, Cuomo said the state was already in the gambling business but he planned to do it right. It turns out that Cuomo’s version of what is right is more like a game of three card monte.

In just one year Cuomo’s casino vision has changed four times. Five if you count that he never even mentioned adding casinos when he ran for governor. It is likley Cuomo’s casino plan will keep changing as competing gambling interests flood Albany with campaign contributions and lobby lawmakers in secret. It is all part of the mad scramble by casino operators to get a slice of New York’s gambling pie.

The process is often ugly and has no rhyme or reason. Money and power trump common sense. Thoughtful study and analysis are no where to be found. Same goes for the social and economic costs of the state pushing more gambling as a way to fund the government. When it comes to changing the Constitution to legalize casinos in New York, Cuomo and fellow Albany lawmakers are playing a backroom game of craps.