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NY Voters Approve Major Gambling Expansion

Up to seven new commercial casinos can be licensed under the state constitution.

New York voters Nov. 5 authorized the state to license up to seven new commercial casinos, the biggest casino gambling expansion in state history.

With 98% of the precincts reporting, a proposal to end the state constitution's long ban on commercial casinos easily won by a 57%-43% margin. Its victory was carried principally with the help of New York City and Long Island voters, where Gov. Andrew Cuomo, the plan's author, and his surrogates in the casino industry and unions spent considerable time on get-out-the-vote efforts.

A pro-casino group, financed by would-be casino developers and unions representing everyone from teachers and teamsters to carpenters, raised nearly $4 million the past four weeks that it used on a television ad, mailings, and the get-out-the-vote campaign.

Uncertain, perhaps for years, is the potential impact on the state's racing industry. While a separate, "enabling" law does contain hold-harmless financial protections for existing racetrack-based video lottery terminal casinos, no one can say for certain what might be the effect on such things as pari-mutuel handle at already struggling tracks as they now face even stiffer competition for a limited share of the gambling dollar.

The most successful track-based casino operator in the state said Nov. 6 only good can come from the casino expansion.

"We're pleased voters recognize the important contribution the gaming industry makes to New York's economy, workforce, and education system," said Kerri Lyon, a spokeswoman for Resorts World New York City, which runs the Aqueduct Racetrack VLT casino. "The passage of this constitutional amendment will only expand our industry's ability to create good-paying jobs for thousands of New Yorkers and provide crucial funds for schools across the state."

Resorts World's parent company, Genting, contributed $750,000 the past several weeks to NY Jobs Now, a group of gambling companies and unions that took advice from the Cuomo administration on getting the proposition passed. Genting earlier this year was denied its request to be among those sites where full casinos with slot machines and table games could be located in an initial round of casino selections.

The law states that Genting will not be eligible to apply for those rights for seven years, though there are loopholes in the statute that could make it happen sooner. Also, Genting is said to be interested in partnering with developers eyeing casino sites in the Catskill Mountains, which are located about 90 minutes from Manhattan.

The casino enabling bill seeks to locate the first four of the eventual seven casinos in upstate areas. Three areas have been selected: Albany/Saratoga Springs, the Catskills/Mid-Hudson Valley, and the Southern Tier near Binghamton. No casinos can be located in three large geographic areas that are now home to Indian casinos under an exclusivity deal tribes and Cuomo made earlier this year.

Separate from the Las Vegas-style casinos, Long Island will be getting two VLT-only casinos, each with up to 1,000 machines that will be run by the off-track betting corporations owned by the county governments of Suffolk and Nassau counties.

Uncertain, precisely, is where the casinos might be located. For instance, while the Albany and Saratoga County areas are included in the approved casino zones, voters in those two counties rejected the gambling proposition. In Albany, the measure lost in unofficial returns 33,500 to 30,000, while in Saratoga County it was losing with 98% of ballots counted by a margin of 25,500 to 22,000.

Those numbers are important because the law states there has to be community support for the state to give a license to a casino company. Saratoga Casino & Raceway, a harness track with VLTs, has been the most vocal in wanting one of the first four casino franchises.

Most officials assume one of the licenses will go to Tioga Downs, located west of Binghamton, and that two others will go to the southern Catskills region, a once-bustling resort area.

Officials from the New York Thoroughbred Breeders were not immediately available for comment Nov. 6.

"I think there are still a lot of unknowns,'' Richard Violette, president of the New York Thoroughbred Horsemen's Association, said of the casino process.

When asked if the racing industry can handle added competition from more casinos in the state, Violette said: "That's always a concern. We're used to competition, though, and I think the casino industry is finding out it's much more profitable to be attached to a racetrack than a stand-alone.'

"Competition is competition. And that's why certainly not having a full-blown casino in New York City is somewhat, at least for the time being, a relief. But it's also incumbent upon us that we put on the best product possible."

For the state, the next step comes with the naming by the New York Gaming Commission of a five-member panel that will choose the developers and sites for the first four casinos. The board cannot be legally seated until Jan. 1, 2014, and can't release a request for application from developers until 90 days after a majority of the panel is named.

The panel will have to base its selection on a number of factors, including community support for a casino and the level of economic development and tax revenue created. The selection panel's membership has limits; members cannot come from the legislature or any level of state government, and must have "significant experience" in areas including finance, economics, real estate, or executive experience with fiduciary responsibility at a large organization or foundation.

"We congratulate the governor and all those whose work led to what was a very convincing victory," said Chris Kay, CEO and president of The New York Racing Association. "The New York horse industry has a statewide economic impact of $2.4 billion and employs 34,000 people across 50 counties, and we look forward to working with the state government and others in the creation of even more jobs for New York State residents via expanded gaming."