Cuomo Touts Expansion of Casino Gambling

The New York governor said some track-based casinos will apply for expansion.

Gov. Andrew Cuomo said there is a big enough appetite for gambling in New York to permit the state to expand casino operations while protecting the interests of existing racetrack-based casinos.

The governor unveiled a new version of a casino plan, absent some details, to locate the first three of seven possible casinos in specific regions of upstate New York. His plan would ban for five years any casino development in New York City, Long Island, and the northern suburbs of New York City, which would make Genting New York’s Aqueduct Racetrack casino the major beneficiary by blocking out competition during the period.

Cuomo and lawmakers are trying to get a casino expansion deal done by the end of session June 20. Lawmakers approved a first step last year and need to pass a second resolution this year to amend the state constitution to permit up to seven Class III casinos on non-Indian lands.

A separate enabling bill is being negotiated with details about possible regions eligible for the gambling facilities and what entity would select the winning casino bidders. Voters statewide could be asked as soon as this November to consider the plan in a referendum.

Cuomo released a map of six upstate areas that could be eligible for casino expansion under a new plan he unveiled May 8. Three of those areas–in western, central, and northern New York–would be taken off the site list if Indian tribes already operating casinos in those areas agree by the end of June to make new, or to restart, stalled revenue-sharing payments to the state from gambling proceeds.

The upstate areas of the state that would be eligible, for certain, under the Cuomo plan include two separate regions that stretch from north of Saratoga Springs down to Monticello Raceway. A third would be a slice of central New York from Lake Ontario southward toward the Binghamton area and the nearby Tioga Downs Casino.

Cuomo dismissed racing industry concerns that racetrack casinos will not be able to compete with full-blown, Las Vegas-style casinos that, rather than just having video lottery terminals, will be able to offer slot machines and table games such as poker. The racetrack casinos have fueled new investment in equine breeding and ownership operations through pumped-up purses.

He cited the success of the Vernon Downs Casino in central New York located just a few miles away from the Oneida Indian tribe’s sprawling Class III Turning Stone Casino. “You’re going to see cluster casinos. I don’t think one is the enemy of the other,” he said of new competition.

Cuomo said he fully expects many of the racetracks to bid for rights to become Class III casinos, though he has in the past said his chief interest is in developing major, destination-style resort casinos to increase tourism. But the New York governor also made clear his longstanding distaste for how the state years ago approved racetrack-based casino deals.

“I also believe what we did with the racinos was bad policy and bad practice by the state,” he said. “We gave out very valuable franchises with very little rhyme or reason, very little regulation, and very little uniformity, and a lot of people made a lot of money over the years. I don’t think the taxpayers got their due.”

One racetrack executive took exception to Cuomo’s comments.

“Cuomo is wrong saying racinos are dysfunctional and people made a lot of money with the current tax system,” said Gary Greenberg, a minority owner of Vernon Downs. “Cuomo’s comments addressing racinos hurt the chances of any amendment being passed in November. Whoever is advising the governor is giving him bad advice.”

The governor is not supporting a key aspect that will determine whether some casino companies seek to locate or expand in New York: tax rates. He said that will be decided, if voters approve the overall expansion, by a temporary panel of financial and real estate experts who would be appointed by the government to assess the bids.

Winners would be chosen based on such factors as the level of impact their plans would have on a local economy and how much they would pay the state in an up-front franchise fee payment or annual takeout tax levels.

"We are reviewing the proposal and look forward to working with the governor and lawmakers to ensure that (the New York Gaming Association's) nine racetrack casinos can continue to be a reliable partner in creating jobs and providing substantial funding for New York's education, equine industry, and local governments," said James Featherstonhaugh, president of the NYGA, a trade group that represents the state's racetrack casinos.