Less than nine months into his administration, New York Governor Andrew Cuomo is taking on the controversial issue of gaming expansion—specifically commercial casinos—in the Empire State.

Last week, Cuomo told reporters it’s time to “come to grips” with the matter, which would require a constitutional amendment starting with approval from two successive legislatures, followed by a public referendum.

“You have gaming in this state and you have gaming in neighboring states,” Cuomo said at a press conference in Albany. “So it’s really not an issue any more of, ‘If we don’t officially sanction it as a government, it’s not going to happen.’ It is happening.”

“So now you have to go to the second step,” he continued. “If there’s going to be gaming, how should it be done? And that’s an important question for the state.”

New York now has five Indian-run casinos and eight racinos offering limited electronic gambling. The ninth racino, a $2 billion development at Aqueduct racetrack in Queens, is set to open later this year, and its developer, Genting New York, has always said it would like to build Resorts World as a full-fledged casino.

Cuomo’s comments should also be welcomed by the state’s other racinos, which have been lobbying the state legislature to let them expand their gaming options. According to the New York Times, the state could earn $684 million this year from racinos alone, and allowing full-blown casinos would substantially raise that figure. Tim Rooney Jr., president of Empire City Casino in Yonkers, said the cash-strapped state loses up to $2 billion a year in revenue “exported” from New York to places like Atlantic City and Las Vegas.

“If you had full casino gambling in New York,” Rooney told CBS-2, “we’d not only be able to keep that $2 billion in the state, but attract out-of-state dollars as well.”

But Cuomo’s comments also have prompted criticism from several quarters: social critics who point out the drawbacks of gambling; and Indian tribes, which will not welcome the competition.

Mark F. Emery, a spokesman for the Oneida nation, said the state would be better served by “working closely with its in-state Indian nations to enjoy immediate revenue sharing, which would benefit the entire state.”

But Joe Kelly, a professor of business law at SUNY College Buffalo and a gaming industry expert, said the tribes have not contributed enough to state coffers to keep their interests inviolate.

“It comes down to one word: money,” Kelly said. “Let’s face it; they are not getting much from tribal gaming.”

Several tribes have stopped paying altogether. In 2010, the St. Regis Mohawk tribe stopped sharing Akwesasne Mohawk Casino revenue, saying the state violated its compact by allowing other gaming halls to open in the vicinity. The Mohawks now owe $17.7 million from a year of non-payments, according to state Budget Division spokesman Morris Peters. And the Senecas, who haven’t made payments for more than two years, have a liability of $288.3 million, he said.

A separate branch of the St. Regis has just opened the Three Feathers Casino in northern New York, without a compact from the state. They do not plan to share any of their revenue with the state government.

Though casinos mean more money in the bank, Joel Rose of the Coalition against Gambling in New York decries the quick-fix mentality of the government. “The function of state government should be to provide for the health and welfare of the citizens,” said Rose. “It seems like now the only purpose of state government is to find ways to raise revenue painlessly for the state so that we don’t have to introduce taxes.”

According to ABC-13 in Rochester, a 2004 study on the impact of a proposed new tribal casino in that city pointed out the pluses and minuses. In the former column: 1,300 primary and secondary jobs; $45 million in new jobs; and a total of $34 million in taxes for the state and the city. But the same study also noted $10 million in “social costs,” such as increased crime and problem gambling.

Moreover, the study concluded, there’s little spillover from a casino to other businesses in the vicinity: “Credible research has shown that there is a consistent pattern of economic loss for specific industries. Downtown food, drink and retail establishments are likely to suffer a loss of business, with a cascading impact on property values and property taxation.”

The conversation is not new in New York. During the 1990s, lawmakers began the process of approving a constitutional amendment to end the ban on gambling. It failed. Last year, a measure was presented that would have allowed five commercial casinos in upstate New York. It passed in the Senate, but never got to the Assembly, and was not reintroduced this year.

State Senator John J. Bonacic, chairman of the Judiciary Committee and the Racing, Gaming and Wagering Committee, has scheduled hearings for September to discuss how to proceed on the issue of casinos.

The governor’s office “hasn’t been giving me any direction,” Bonacic told the New York Times last week. “But at the same time they haven’t discouraged me.”

Assemblyman Gary Pretlow, chairman of the Assembly Racing and Wagering Committee, says he hopes Cuomo moves forward on casinos. “I think it would be an economic boon for the State of New York,” he said.

Senate Majority Leader Dean Skelos has hailed the idea as “a tremendous opportunity for economic development” in depressed regions of the state. “Also it means a substantial amount of revenue for the state,” Skelos told the Mid-Hudson News.

Meanwhile, the possibility that New York might push for casinos in the state could provide the impetus that Massachusetts lawmakers need to finally pass a gaming expansion bill.

New York currently has eight racinos, which bring in an estimated $500 million annually in revenue, but Cuomo has talked about the possibility of licensing Las Vegas style casinos to raise state revenues.

That could drain off some of the revenue that the Bay State lawmakers hope to raise with three regional casinos, especially from a casino in the western part of the state.

Bay State House Speaker Robert DeLeo and Senate President Therese Murray have said they have a bill to present to their two chambers next month. It is similar to a bill they passed last year, and which Governor Deval Patrick killed with by proposing an amendment to it at the end of the legislative session—which had the actual effect of a veto.

The sticking point last year was DeLeo’s insistence on not just three casinos, but two racinos, i.e. racetracks with slot machines. DeLeo has two faltering racetracks in his district.

However, Patrick said recently that he expects a bill to pass in both houses, and that he could sign a bill that has one racino, as long as its license was issued after a competitive bidding process.

In Palmer, where Citizens for Jobs and Growth in Palmer supports the plan by the Mohegan Sun to build a casino in the town, spokesman Jennifer Baruffaldi urged legislators to move quickly. "I think it would be a wise decision for our politicians to vote on this sooner than later. You would think that with New York expanding gaming, why not Massachusetts?” she said, according to the Associated Press.

The tribe’s representatives recently hosted a summer barbecue with Palmer residents in which they promised to release the names of their financial partners in the resort next month. Over 300 locals showed up, despite heavy rains.

The Mohegan Sun's vice president of development, Paul I. Brody, reemphasized the tribe’s commitment to the town to build a $600 million casino resort, which he said would generate 2,500 permanent and 1,200 construction jobs. He said he hopes that by fall the legislature will have adopted gaming legislation. "We're looking forward to the bill advancing," he said.

Later Brody was interviewed and talked up the Palmer site, which he said is better than a site being touted in nearby Holyoke at the Wyckoff Country Club by Paper City Development.

He added that the tribe’s experience in running one of the largest casinos in the world in Connecticut as well as a racino in Pennsylvania gives it a leg up in operating a successful casino.

The tribe has spent over $10 million on the Palmer proposal, including public relations, engineering, site acquisition and legal fees.  

Recently the Palmer Town Council voted to ask the tribe to give the council an update on its plans.

Kathleen C. Norbut, a member of United to Stop Slots in Massachusetts, recently accused the Mohegan Sun of having “grave financial problems, does not have a solvent fiscal plan for building another casino and seem to think that their little 'dog and pony' show with a storefront in a fiscally depressed community and hosting a 'comp' barbecue proves that they have good intentions.”

Statewide casino opponents say that gaming interests are trying to pit New York and Massachusetts against each other to generate competition—and more casinos.

They also warn that states can get hooked on the culture of dependence and greed,” as former state Attorney General Scott Harshbarger phrases it. Others say that it’s not good for a state’s economy to urge people to lose money gambling. "The worst thing you can do is say: 'Look we have an economic problem, let's have more people lose more money,” is how Tom Larkin, president of United to Stop Slots in Massachusetts, puts it.

Meanwhile, a Colorado developer who is tired of waiting for the legislature to act, last week launched a campaign to put the casino issue on the ballot next year.

David Nunes submitted a referendum to the attorney general’s office that would authorize one Indian casino in the eastern part of the state, one in the western part, and one in Milford that would specifically be run by his company, Crossroads Massachusetts LLC. 

Nunes wants to build a casino and large hotel on 200 acres in Milford.

Nunes says he is willing to spend hundreds of thousands of dollars to pass the initiative. But he will only do it if the lawmakers and governors fail to act this year. He called his initiative an “insurance policy,” and said he had been frustrated and disappointed many times over the last dozen years. It remains to be seen whether it is legal for him to put a measure on the ballot that would benefit him personally, even though he would still have to gather nearly 70,000 signatures by this November and another 11,485 by June of 2012 to qualify for the ballot.

Under Nunes’ proposal casinos would pay 25 percent of their profits, with the money earmarked for municipalities. 

By Staff