Casino Companies See Opportunity In New York's Budget Shortfall
ALBANY, NY (WSKG) - Gambling casino companies are pressing Governor Cuomo and the legislature to allow them to open gaming centers in New York City as part of the new state budget. There are a number of obstacles to overcome, but the proposal may seem tempting to lawmakers, who are strapped for cash this year.
Representatives for major casino companies, including Las Vegas based Sands and Malaysian based Genting , have been spotted in the halls of the state Capitol in recent days, advocating to speed up the timetable for allowing gambling casinos in New York City. They say the state could gain one and half billion dollars in new licensing fees and reap one billion dollars in new revenues a year, at a time when there’s a $2.6 billion dollar deficit.
The issue even brought a former governor back to Albany. David Paterson, who was governor from 2007 until 2011, is on the board of Sands, to promote women and minority owned businesses. Paterson says he’s not lobbying for the new casinos. But he nevertheless listed reasons why they would be a good idea. He says the related attractions, like stores, restaurants, and concert venues, would boost visitors and tourists.
“When they rebuilt Yankee stadium, the place looks like it’s like a cathedral. If you look around long enough, you might see a baseball game going on there,” Paterson said. “It’s not just a casino. It’s the stores, it’s the shopping it’s the shows.”
Two different ideas are being discussed. One would open bidding for a new casino and resort style complex located in the downstate area.
The other would convert the existing video lottery slot machines at the Aqueduct racing venue into a full-fledged casino. Michael Levoff, the Senior Vice President of Worlds Resort, a subsidiary of Genting, said in a statement that the expansion would create “thousands more good-paying union jobs” and also generate “hundreds of millions of dollars each year in additional revenue for the state”.
The proposals come just a month after a mega project to bring Amazon to New York City collapsed when Amazon pulled out of deal that the company said would have created 25,000 new jobs.
Under current law, upstate was allowed to build casinos first, and four have been located- in Schenectady, Binghamton, the Catskills and in Central New York . New York City franchises were not to become available until 2023.
If new casinos were to be opened in New York City, the owners would have to pay a penalty fee, known as a liquidated damages clause, to the upstate casinos, which could reach several hundred million dollars. The casino companies say they are willing to do that.
Governor Andrew Cuomo says he understands the appeal.
“Everybody says that would be the golden franchise,” Cuomo said. “If you had a casino in New York City.”
But he says if new casinos were to be permitted, the franchise awards would all have to go through a bidding process. He does not think current owners should be allowed to simply expand their businesses to include a casino. But Cuomo says he has not spoken to anyone from the casino companies or talked about the issue with legislative leaders.
Assembly Speaker Carl Heastie says his democratic conference is not a fan of more casinos.
“Expansion of gambling not very high on their love list,” Heastie said.
The Speaker says casino revenue is regressive, because it draws profits from low income earners more than higher income people. He instead adding new, higher, tax brackets for multimillionaires and billionaires as a way to gain revenue to balance the budget .
“We don’t believe rich people gamble,” Heastie said. “Assemblymembers would prefer asking those with the means to do a little more than to ask people to pay more through gambling.”
The State Senate is not in favor of adding additional taxes for millionaires. Senate Leader Andrea Stewart-Cousins has not taken a position on the casinos. Although the Senate budget resolution does call for allowing on line sports gambling in the state’s existing casinos. The US Supreme Court recently granted states permission to allow sports gambling.
Heastie says there is some support in the Assembly for the idea.