Senate Republicans in New York are finalizing legislation to restrict the first three casinos under a gambling expansion effort to areas of the state already home to racetrack-based casinos, a move one top lawmaker believes should signal that racetracks with video lottery terminals should be first in line for the larger, Las Vegas-style casinos.
"They have a history of good performance in terms of job creation," said Sen. John Bonacic, chairman of the Senate Racing and Wagering Committee. "They're basically a proven product. Now I'm not saying they all should go there, but it's a message to the (New York) Gaming Commission that unless something better comes along, (the racetracks) are the logical choice."
Bonacic said the Senate GOP plan will call for the first three casinos to be restricted to, in order of when they would be licensed by the state, to Sullivan County in the Catskill Mountains, the Tioga area west of Binghamton, and the Saratoga/Washington County area north of Albany. All three are home to harness track-based gaming facilities that can VLTs but not table games.
The first facility in the Catskills would be licensed by June 2014, with each of the subsequent two sites getting licenses six to 12 months apart from one another.
Bonacic said the regions were selected because of either proximity to New York City or for economic development reasons to help reduce unemployment levels. Bonacic represents Sullivan County, part of a region promised three casinos more than a decade ago.
The legislation doesn't specify where the other four casinos might go in an expansion plan that could be complete in about five years. He said lawmakers hope to first discuss the effort with Gov. Andrew Cuomo, but lawmakers are not ruling out letting future casinos into the New York City and Long Island markets.
Bonacic said he personally believes the Aqueduct Racetrack VLT casino run by Genting New York should be eligible for expansion to a full Class III casino. "In my mind, that should be number four," he said of the Aqueduct site's order in the expansion plan. "That's the benchmark. All the racinos have done well, but I just think Genting is exceptional."
The Senate GOP plan would not permit casinos in a large area of western New York now under a Class III exclusivity compact with the Seneca Nation of Indians, or in northern New York near the casino run by the St. Regis Mohawk tribe. Bonacic didn't rule out a casino in central New York somewhere near the Oneida Indian's Turning Stone casino, which, unlike the other two tribes, is not subject to a slot machine revenue-sharing deal with New York State.
Final decisions about specific locations in a region or selection of operators would be left, under both Senate and Assembly plans being floated, to the Cuomo-run gaming commission.
Lawmakers last year passed the first resolution to amend the state constitution to permit up to seven casinos on non-Indian lands. They need to pass the same resolution again this year, along with an "enabling legislation" giving more specifics about matters such as regions where the casinos could locate.
Voters statewide could get their earliest say on the idea in a statewide referendum this November if Cuomo and lawmakers agree on a final package before the legislative session ends in June.
One major unresolved issue is the possible tax rates New York might charge commercial casino operators. The tax rate for racetrack casinos in New York is higher than it is in other states, and some casino companies have suggested they are not interested in doing business in New York.
"It's complicated," Bonacic said. "I think you have to look at the interest of the bidders and what kind of private sector money they want to invest in an area, and we leave that decision to the financial experts of the gaming commission to make advisory recommendations to the legislature because we set policy and taxing."
Bonacic said the final deal must give voters and casino companies a clue about the regions that will be open for casino expansions. "I do believe the voter has to know where they're going, and those that are going to put money into this to push the referendum have to know they have a comfort level, that they're not going to be cannibalized," he said.