Revel’s sucker’s bet

June 28, 2013 9:19 am

The Revel casino in Atlantic City opened to great fanfare last year and then promptly filed for U.S. bankruptcy protection.

Now, the $2.4 billion casino appears willing say and do anything to lure in gamblers to help stay afloat. The Revel is advertising a new promotion that claims slots players “Can’t lose.”

During the month of July, the casino says it will ‘refund’ any losses at slot machines. Of course, the ad is misleading. There are no cash refunds. Instead, the Revel will give gamblers credit for any losses at its slot machines. But the credit can only be used to gamble again at the Revel. In other words, the casino will let you lose your money twice.

That’s not a deal, that’s a suckers bet. The goal of casinos is to keep gamblers coming back early and often. Over time, the casino knows it will take your money because the odds are always stacked in its favor. Hence the term, gambler’s fallacy. But the casino industry has a better term that it doesn’t like to discuss. It’s called play to extinction. (See video here and read this excellent piece in the National Review on why casino gambling is a bad racket.)

Getting gambler’s to play to extinction is really what is behind the Revel’s “can’t lose” promotion.

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.

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.

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’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.

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.