NY Racinos Want Indian Casino Deal Scuttled

U.S. Department of Interior has set Feb. 19 deadline to approve or reject deal.

The major racino operators in New York are urging the state’s new governor and legislative leaders to scuttle a deal made by former Gov. David Paterson with a Wisconsin tribe for a full-fledged casino in the Catskills resort region.

The pleading to Gov. Andrew Cuomo and the heads of the Senate and Assembly came from the future operators of the Aqueduct casino, as well as existing track-based casinos at Yonkers, Monticello, Saratoga, Finger Lakes and a Buffalo-area track.

The group said the state would lose $400 million in tax revenues by reduction in business at the racinos, which share a portion of their proceeds with the state. They asked the Cuomo administration to "stop the clock" with the U.S. Department of Interior, which is on a Feb. 19 deadline to approve or reject the plan between the state and the Stockbridge-Munsee Community Band of Mohican Indians.

"I don’t know anything about it," Cuomo said when asked about the letter. He said he would read the group’s letter and respond at some point.

The state’s casino plan was submitted to the federal government in the closing days of the Paterson administration last month. Racino operators say a Catskills-based casino --located 90 miles from Manhattan--would especially lure upscale and weekend bettors from Aqueduct, Yonkers and Saratoga. Unlike the racino facilities, which offer VLTs, the Indian-proposed casino would feature slots and table games.

"We believe that this compact, signed and submitted without public input or oversight and at the very end of the Governor Paterson’s tenure, poses significant, negative budgetary impacts for New York state that should be carefully re-evaluated--particularly in this time of fiscal crises--to determine whether or not the current New York state administration should withdraw the compact and inform the (Interior Department) that it no longer supports the compact," the group said in a letter written by James Featherstonhaugh, an Albany lobbyist who is also secretary of Saratoga Gaming and Raceway.

"Coming on the closure of NYCOTB, the opening of the Sullivan County casino may well spell the end of the New York horse racing industry," the group warned, claiming that the casino will cost up to 1,000 racino jobs.

The group said the state now takes up to 70% of racino proceeds, compared to Indian casinos in New York that now pay up to 25% off slot machine revenues to the state.

"The reduced tax structure provided to Indian casinos not only immediately reduces state tax and education funding, but creates a structural competitive advantage that cannot be overcome because Indian casinos have the ability to offer free room, food and beverage because of the low tax rate. With limited products and profoundly greater taxes, racinos cannot and will not be able to effectively compete," the group warned.

They asked state officials to commence an economic review to determine the fiscal and economic impact of the casino deal entered into by the former governor and the Wisconsin tribe.

Of the estimated $407 million in revenue loss, the group said the state will lose $188 million annually that goes to public school funding and $127 million will disappear in racetrack commissions. Another $51 million would be erased, they said, in money that now goes to the racing industry, including breeding and purse funds. And the state lottery office, which administers the VLT program, would lose $40 million in racino proceeds.