Genting’s shifting casino plan in Florida

January 20, 2014 9:03 am

Remember when casino giant Genting claimed it was going to build an elaborate multi-billion dollar resort in Miami? Now, it turns out the Malaysian-based operator will settle for a bare-bones slots barn.

Talk about showing your cards. It seems Genting will say and do whatever it takes to bring more gambling to Florida. That is really what the casino debate is all about.

Recall in 2012 how Florida lawmakers rejected Genting’s effort to build a destination casino resort in Miami. That came after Genting hired an army of influential lobbyists and spent more than $1 million pushing to legalize casinos in the Sunshine State.

Now, Genting has shifted gears and is pushing a plan to team up with a racetrack operator to build a slots-only facility in South Florida. So much for the glamorous tourist resort. Genting is now targeting local and repeat slots gamblers.

The new plan will add nothing to the economy and do little to attract tourists. Instead, Genting wants to just bleed the local gamblers with a giant slots barn.

The Florida plan sounds a lot like the Genting slots barn at the Aqueduct racetrack in Queens, New York. That facility rakes in nearly $2 million a day and is one of the most profitable gambling halls in the country. The Queens facility does not attract tourists and instead caters to mostly local gamblers.

New York Times columnist Michael Powell captured the scene in Queens when he described Genting’s Resorts World as resembling an “airport departure lounge mated with a pinball machine.” The Times’ Clyde Haberman also interviewed gamblers at the Genting slots hall and found not many were there for fun or looked anything like James Bond. Expect the same scene in Florida if Genting gets its way.

Genting was behind the effort to legalize casinos in New York. Genting’s influence was on display in New York. As a candidate for governor, Andrew Cuomo never even discussed casinos. But less than a year into his term he began pushing the idea – thanks to some help and money from Genting.

Now that casinos are legalized in New York, Genting is showing its true colors. After touting how casinos will bring jobs to New York, Genting recently announced nearly 200 layoffs. Likewise, Genting’s initial Florida plan was going to create lots of jobs, but those plans have been scaled back as well.

In Florida, Genting is poised to do whatever it takes to bring more gambling into the state.

Casino measure approved: Cuomo wins; NY loses

November 6, 2013 5:58 am

New Yorkers voted to change the state constitution to legalize up to seven casinos across the state.

The controversial measure was approved by 57 percent of voters. The vote likely would have been closer if the Cuomo administration had not rigged the ballot to place rosy wording in the referendum that touted potential benefits of casinos without mentioning any of the costs. Polls showed voters were evenly divided over casinos, but support increased after voters were given the misleading language.

Gambling interests also raised $4 million to promote the measure largely through TV ads. Another $59 million has been spent by gambling interests since 2005 on lobbying and donations to lawmakers, including more than $1 million to Gov. Andrew Cuomo. (See The New York Times report here.)

As a candidate, Cuomo never discussed casinos. But eight months into his term, he suddenly championed casinos and later cut a series of deals with Indian casino operators and racetrack operators in order to reduce opposition from gambling interests. He said the casinos could generate “$1 billion in economic activity” for the state but failed to hold any public hearings or conduct a cost-benefit analysis into more gambling. Cuomo’s $1 billion figure came from an interview a gambling industry lobbyist gave to a Albany business publication.

Cuomo also said the first four casinos would be built in upstate New York. This also helped to mute opposition in and around New York City, where polls showed more residents were opposed to casinos. But now that the measure has passed it will only be a matter of time before casinos are built in and around the city.

Cuomo said casinos would generate jobs and economic development for the state. However, the jobs that come from casinos do not outweigh the many costs that will come from having more residents gambling more often. (At several casinos in and around Philadelphia, customers come an average of three to five times a week.) More broadly, casinos do not generate new spending but merely divert it.

Studies show that casinos generate anywhere from 30 percent to 55 percent of their revenues from repeat and problem gamblers. Studies also show that where casinos locate there is an increase in social costs, including more crime, bankruptcy, divorce and suicide. One study found that for every $1 in casino revenue creates $3 in costs.

So Cuomo may have won the casino vote, but New York lost.

NY voters confront rigged casino ballot

November 5, 2013 11:59 am

After more than two years of backroom negotiations and Albany-style deal making, voters in New York will decide if the state should change its constitution to allow commercial casinos.

The wording on the ballot has been rigged in an effort to trick voters into believing that more gambling will provides benefits but no costs. As this CBS report shows, not all voters are buying it.

James Cahill of the New York State Building and Construction Trades Council dismissed evidence that shows casinos produce little new spending and are essentially a regressive tax that strips wealth from communities and hits the elderly, working class and minorities the hardest. Casinos also lead to increased crime, divorce, suicide and bankruptcy in the areas surrounding where they locate.

One study found that every $1 in revenue generated by casinos leads to $3 in social costs - that all taxpayers will pay whether they gamble or not. Other studies have found that anywhere from 30 to 55 percent of casino revenues come from problem gamblers.

Promises of jobs and economic development have done little to reverse the economic fortunes of other areas that have legalized casinos. See Atlantic City, Detroit and Mississippi.

In Illinois, the casinos have helped to create more problem gamblers than jobs.  That explains why one New Yorker said she intends to vote against the casino proposal: “I’m voting no. I’m a gambler and I want to save me from myself,” said Vida Antoinette.

What the smart money says about casinos

November 4, 2013 11:34 am

In a hotly contested race like legalizing casinos in New York, it is worth noting what the leading newspaper editorial boards have to say about the issue.

The New York Times makes the most compelling case against casinos.  Interestingly, the New York Post agrees with The Times: It is not often those two papers are on the same page, which is telling. This must be a bad idea on all fronts.

A number of other leading newspapers urge residents to vote no against casinos, including The Albany Times Union, The Syracuse Post-Dispatch and The Watertown Daily Times. Each paper makes a thoughtful and well-reasoned case against casinos.

What is even more compelling are the papers in support of casinos. Those editorials struggle to make the case for casinos and lack common sense and logic. In doing so, the editorials actually underscore why commercial casinos would be bad for the state.

The New York Daily News said casinos are a lousy way for government to raise money and will lead to more addiction, but vote yes anyway. Uh?

The Poughkeepsie Journal called the casino ballot language “one-sided” and said the state played “fast and loose with this issue,” while failing to mention the “legitimate concerns.” Keep in mind, this is an editorial in support of casinos.

Newsday actually praised Cuomo’s crass politics and secret deal-making. But then added this gem as part of its, ah, casino support: “It’s not that there isn’t plenty to oppose in both the gambling expansion and the way it’s been handled. The casinos may not provide as much upstate revitalization as hoped. They would inevitably increase the number of problem gamblers where they are located.”

With casino supporters like this, who needs an informed opposition?

TV ad: Cuomo’s dad dissed casinos

November 1, 2013 9:46 am

A group opposed to Gov. Andrew Cuomo’s proposal to change the state constitution to legalize commercial casinos launched a TV ad that uses Cuomo’s father to make their case.

In the ad, a narrator recounts what former Gov. Mario Cuomo once said about casinos:

“There is a respectable body of economic thought that holds that casino gambling is actually economically regressive to a state and a community. Casinos are a whole different breed. It changes communities. It does not generate wealth, it just redistributes it.”

The ad then says: “Mario Cuomo didn’t support changing the New York State constitution to allow Las Vegas-style casinos. He knew gambling was a bad bet for New York. Vote with Cuomo. Vote ‘no’ on Proposition 1.” See the ad here.

The Cuomo administration immediately responded by getting Cuomo’s dad to essentially reject his position.

“I made those statements in 1994. A great deal has changed in 20 years,” Mario Cuomo said in a statement. “The New York that I was dealing with was a different place. We didn’t have casinos on every border. Gaming was only in Las Vegas and Atlantic City. Today couldn’t be more different . . . New York is surrounded by states that have casino gaming – and casinos are a short drive from anywhere in the state. So New York has to compete with out of state gaming.”

The group that released the ad responded to Mario Cuomo’s comments.

“What hasn’t changed since 1994 is the fact that casino gambling continues to be a form of regressive taxation - and casino gambling ‘changes communities’ for the worse. What also hasn’t changed is that casinos take advantage of those who can least afford it. That’s why everyone from The New York Times to the New York Post, to the head of the Conservative Party to stalwart progressive elected officials like State Senator Liz Krueger, urge a NO vote on Proposal 1,” a spokesman for the Committee Against Proposition 1 said.

Unlike his thoughtful father, Andrew Cuomo made clear that he is now forever “linked” to casino gambling. Despite never mentioning casinos while campaigning for governor, Andrew Cuomo made casinos the cornerstone of his economic agenda just months after getting elected.

As a result, there is a lot riding on the Nov. 5 casino vote for Cuomo. That’s why Cuomo cut a variety of deals with competing gambling interests and rigged the wording on the ballot referendum. Polls showed voters were divided on casinos, but support increased after voters saw the rigged language on the referendum.

Fred Dicker of the New York Post wrote recently that Cuomo was worried about losing the casino vote, feeling that his “personal prestige” was on the line.

Note to Andrew Cuomo: There is nothing prestigious about pushing a regressive business that does not produce anything; does not generate new spending; takes advantage of vulnerable citizens; has a corrupting influence of government and gets a third or more of its revenue from repeat and problem gamblers.

There was a time when a smart governor named Mario Cuomo knew that.

Casinos in NY: a sucker’s bet

October 30, 2013 4:02 pm

E. J. McMahon, the president of the Empire Center for Public Policy, details the real impact – of lack of – from the proposal to change the state constitution in order to allow up to seven casinos in New York.

Here’s his conclusion: “The pro-casino campaign is at least confirming one old adage: There’s a sucker born every minute.”

McMahon explains how little impact casinos will have on the state, despite the claims by Gov. Andrew Cuomo and other gambling supporters. “A large majority of New York City residents think the non-Indian gambling casinos authorized by Proposal One on next week’s statewide ballot will bring in ‘significant new revenue for New York state and local governments,’ according to a New York Times-Siena poll released Tuesday,” he wrote in the New York Post. “If they’re voting “yes” on that basis, they’re in for a rude awakening.”

Casino issue heats up

September 25, 2013 10:17 am

Gov. Andrew Cuomo is confident the casino referendum will pass – despite the state’s lack of independent study, debate or public hearing. But not everyone thinks more gambling is a good idea. A number of thought leaders have chimed in with powerful pieces, sparked in part by the recent report titled “Why Casinos Matter” that was published by the Institute for American Values, which sponsors this blog.

New York Times columnist Michael Powell wrote a compelling column where he interviewed a gambler who thinks more casinos is a mistake. “It’s a losing deal, casinos,” electrician Stu Litwin told Powell. “I’ll be honest, I should have my head examined for coming here. You really don’t want the whole city doing this.”

Powell found Litwin at the Resort World Casino at Aqueduct Racetrack in Queens, which he said “looks like an airport departure lounge mated with a pinball machine.”  He also likened the Cuomo camp’s rosy wording of the casino referendum promising jobs, lower property taxes and school funding as “Leonid Brezhnev Triumphal Style.”

CNN contributor David Frum chimed in with a column titled “The Harm that Casinos Do.” Frum wrote: “The impact of casinos on local property values is “unambiguously” negative, according to the National Association of Realtors. Casinos do not revive local economies. They act as parasites upon them. Communities located within 10 miles of a casino exhibit double the rate of problem gambling. Unsurprisingly, such communities also suffer higher rates of home foreclosure and other forms of economic distress and domestic violence.”

IAV President David Blankenhorn and former Rochester Mayor William Johnson also wrote an op-ed in the Albany Times Union that argues how casinos contribute to the gap inequality. “While casinos do not create wealth, they redistribute it, overwhelmingly from the have-nots to the haves. Gov. Andrew Cuomo and other casino advocates often use terms such as ‘destination gaming resorts’ to describe them, but the label is highly misleading. Anyone who has actually visited America’s regional casinos knows that they are quite different from Vegas-style resort casinos.”

Cuomo and other casino supporters have avoided public discussion on the well-documented economic and social ills that come with casinos. As such, many voters are not well informed about casinos. But many thought leaders who have taken the time to examine the issue understand that casinos do more harm than good.

Study: casinos = corruption

July 3, 2013 9:06 am

A new study has found what anyone who has watched states legalize casinos already knows: gambling has a corrupting influence on elected officials.

Two economists studied federal corruption conviction rates in states before and after they legalized casino gambling. The study focused on the years 1985 to 2000, a period when gambling interests flooded state capitols with money in a drive to legalize casinos.

They found corruption convictions increased after casinos were legalized. The study also showed that the corrupting influence of casinos began a year or two before lawmakers approved gambling. (See New York, where the first hint of corruption began two years ago. The impact casino money has also begun to impact Massachusetts, where gambling was recently legalized. Of course, Pennsylvania may have set the gold standard.)

Economists Douglas M. Walker and Peter T. Calcagno said the pattern supported two theories to explain the increase in corruption: the casino industry is attracted to states with an existing “culture of corruption.” The casino industry often exploits the regulatory atmosphere after gambling is legalized. In other words, the casino interests corrupt public officials before, during and after the legalization process.

The study looked at conviction rates in all 50 states between 1985 and 2000. Four out of the five states with the highest annual rates of public corruption were casino states.

Mississippi topped the list with almost four public corruption convictions a year per 10,000 state employees followed by Louisiana, Illinois and South Dakota. The five states with the lowest corruption rates did not legalize casinos during the same period.

The corrupting influence of casinos is not new, it has only increased in recent years. (See a list of anecdotal corruption incidents here.) But former Illinois Sen. Paul Simon pointed to the problem while testifying at a meeting in 1997 before the National Gambling Impact Study Commission when he said, gambling “has more of a history of corruption than any other industry.”

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 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.