CARS HOMES JOBS

Compromise casino bill addresses many concerns

Thursday, June 20, 2013
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— In a little more than two years, at least one live-table casino could be up and running in the Capital Region, but maybe not in Saratoga Springs.

A compromise between Gov. Andrew Cuomo and legislative leaders produced a comprehensive casino siting bill late Tuesday that outlines the placement of four upstate casinos if a constitutional amendment allowing seven non-Indian, live-table casinos is passed by the state Legislature at the end of the week and approved by a statewide referendum in November. The bill allows for casinos to be put in the Capital Region, Southern Tier and Catskills, with the possibility of one region getting two casinos.

The selection process, which hinges mostly on a planned casino’s potential economic benefit in a region, is to be overseen by a siting board that will be appointed by the state Gaming Commission. The first four members, enough to provide a quorum, were confirmed to spots on the Gaming Commission less than 24 hours after the bill was introduced.

State legislators, business leaders, people in the racing industry and gambling interests, including officials at the Saratoga Casino & Raceway, were still reviewing the proposal Wednesday afternoon and had reached few conclusions.

A key question for Saratoga County Chamber of Commerce President Todd Shimkus was the bill’s impact on support payments to the New York Racing Association from video gaming at the Resorts World Casino in Queens. He argued that this revenue, which is used for capital projects, operating expenses, subsidizing breeders and growing purses, has been successful and generated positive results for Saratoga County.

Payments from the Resorts World Casino would not be impacted, but the concern is that they could decrease if the site experiences a loss of revenue due to new competition, including a live-table casino in the Catskills or video lottery terminals that will be introduced at two sites in Long Island. If there is a drop in revenue that causes a decrease in support for NYRA, it will be maintained at this year’s levels with revenue from the new VLT sites in Long Island.

Shimkus added that he was encouraged to see the bill guaranteed the state’s harness racing and breeders wouldn’t see a drop in similar support payments they receive from VLT revenue at eight racinos.

A major change in the bill from the proposal rolled out earlier in the month by the governor are the tax rates for the new casinos. An across-the-board rate of 25 percent drew complaints from the state’s nine racinos, which pay a rate about twice that and said they wouldn’t be able to compete with new casinos that would keep more of their revenue.

In response to these concerns, the new casinos are to be taxed at two different rates. They will pay 10 percent on revenue from live-table games, which is just slightly higher than what casinos pay in Las Vegas, but the rate for machine gaming, comparable to the VLTs at the racinos, will be set at what the racinos are required to pay in that region.

State Sen. John Bonacic, R-Catskills, said there was discussion in a committee meeting Wednesday about future tweaking of the rates that might be needed to ensure the racinos can compete.

Likely as the result of the different tax rates, the proposal also replaces a minimum $50 million license fee with a fee that will be determined in the future by the casino siting board. Some potential bidders, including Jeff Gural, who wants live-table games for Tioga Downs in the Southern Tier, said the $50 million fee would have prevented him from bidding. The new fee will allow him to apply.

Officials from the New York Gaming Association, which represents the state’s racinos, and the Saratoga racino declined to comment on the new rates and license fee.

A change in the bill that requires the siting board to consider more than three years of past capital investment when judging casino bids appears to address another concern of the racinos. Because the initial bill only required the siting board to consider the past three years when determining overall investment in the project, sites like the Saratoga racino would be out of luck, since much of their investment happened a decade ago.

This investment consideration is not a complete win, though, because it allows the siting board to discount previous investments as it sees fit.

Also tucked into the bill is an expansion of sites in the state that can operate VLTs, including one in the Capital Region, but this only happens if the public referendum fails. This is being billed as a way to increase state revenue, but more cynical observers view it as a threat to racinos that might lobby against the referendum and then face new competition.

Despite the bill’s guarantee that at least one casino will go to the Capital Region unless no qualifying operators are identified, Shimkus still had reservations about not simply giving live-table games to the Saratoga racino. “I look at the map and go, ‘We ought to just be designating Saratoga,’ ” he said. “It’s the logical place.”

The city’s representatives in the state Legislature, state Sens. Hugh Farley, R-Niskayuna, and Kathy Marchione, R-Halfmoon, and Assemblyman Tony Jordan, R-Jackson, have all previously supported plans that would specifically identify Saratoga Springs as a site for a casino. They were still making their way through the more than 200 pages of the bill on Wednesday and declined comment on how they’ll vote.

Assemblyman Phil Steck, D-Colonie, said in an interview at the end of May he was philosophically opposed to gambling but said a smart plan could be beneficial. From his perspective, Saratoga Springs was a good place in the Capital Region for a casino, despite the city being outside his district.

Steck said his district would still benefit from a successful casino in Saratoga Springs, noting that his constituents would receive increased education and municipal aid from casino revenues.

The municipal aid provision in the bill was a welcome change to Shimkus, who said it appears to provide more stability than the current host payments Saratoga Springs and Saratoga County receive from the Saratoga racino, which have been taken away and partially returned at the whim of state officials.

Because the compromise bill has support from all of the legislative leaders, it and the constitutional amendment are expected to pass by Saturday.

 
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