Officials in New York have been quietly discussing ways to "send a shot across the Hudson River" in advance of New Jersey's fall referendum in which voters will determine if two casinos can be located in the northern part of the state not far from Manhattan.
Driving the talks is a growing concern that New Jersey might legalize the casinos at a time when New York is in midst of its own casino expansion program. The plans, according to individuals involved in the talks, run the gamut, but all consider that New York could end a self-imposed, seven-year ban on new casino development in New York City or its suburbs.
The seven-year restriction was part of a 2013 law intended to give four upstate casinos, three of which have been licensed, are under construction, and are due to open next year-time to operate before they face in-state competition from new facilities in the state's population center.
Officials in New York said they can't sit by and let New Jersey legalize new casinos so close to the border without acting. Under one scenario described by well-placed sources, all of whom spoke on condition of anonymity, New York is considering a plan in which the state's three remaining casino licenses would be put out for bid for downstate locations if New Jersey voters approve the casino expansion.
It wouldn't come without a cost to New York: The state has collected $151 million in license fees from the three casinos under construction. One is in the Catskill Mountains; another in Schenectady near Albany and Saratoga Springs; and the third is between Rochester and Syracuse.
A fourth license for Tioga Downs, a harness racetrack with video lottery terminals located west of Binghamton in the state's Southern Tier region, is pending. Owner Jeff Gural also operates Meadowlands, one of the possible sites for a New Jersey casino if the referendum passes.
Another plan that has been discussed is to let New Jersey know—in ways not yet decided—that New York might consider giving the VLT casinos at Aqueduct Racetrack and Yonkers Raceway full-blown casino licenses if the Garden State's referendum passes. A full casino license would permit those tracks to install real slot machines and table games.
It would also make them eligible to offer sports wagering if the federal government someday legalizes that form of gambling.
The threats under consideration against New Jersey—aimed at voters but chiefly investors who might finance northern New Jersey casinos—don't come without risk to the New York casino program. If the seven-year casino ban in the New York City is reduced in years, it is uncertain how, for instance, that might affect a large casino under construction in the southern Catskills near Monticello, located just 90 minutes from Manhattan.
The seven-year clock started ticking in March when the three casino licenses became effective.
The ideas are being considered by officials with Gov. Andrew Cuomo's office and the state legislature. One official publicly acknowledged ideas are being discussed.
Uncertain, according to Assemblyman Gary Pretlow, is whether any action might occur on the matter the week of June 13 when the 2016 New York legislative session ends or wait until after New Jersey voters decide the issue.
"I'm not interested in creating a border war with New Jersey, but New York has a vested interest in gaming and we're not going to allow one of our neighbors to take away from that," said Pretlow, a Democrat who chairs the Assembly Racing and Wagering Committee.
Pretlow confirmed that two ideas—ending the seven-year ban on downstate New York casino development and consideration of Aqueduct and Yonkers for two of the licenses—have been under discussion at the New York Capitol.
"We now find it very important that we are a leader in gaming," Pretlow said.
It remains uncertain if any action taken by New York before the fall referendum by its neighbor might backfire with voters in New Jersey, which has enjoyed a long, cross-border competition on any number of matters.
"We're not telling them what to do," Pretlow said. "We're telling them if they do what they want to do then we're going to do what we want to do."