Casino law could flood state with new money

Posted on January 12, 2012 by

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Video gaming machines were added at racetracks starting in 2001, to create "racinos." Racetracks like Tioga Downs and the Aqueduct are likely to seek full casino status if an amendment to New York's constitution legalizes gambling.

Matt Richmond, BINGHAMTON

One of the main planks in Governor Cuomo’s State of the State address was the legalization of casinos in New York. As the Innovation Trail‘s Matt Richmond reports, a great deal depends on how that process unfolds. 


In last week’s State of the State address, Governor Cuomo made legalized casinos seem like a logical next step for New York.

“It is not a question of whether or not we should have gaming in the state, we have gaming in the state of New York,” Cuomo said. “We don’t realize it. We don’t regulate it. We don’t capitalize on it. But we have gaming.”

So, according to the governor, all that’s left is to change the constitution, which still prohibits casino gambling.

“The argument is some places and not others makes no sense at all,” says  Gerald Benjamin, a political science professor at SUNY New Paltz.

The full-scale casinos on tribal lands include table games like blackjack, roulette and poker. They differ from non-tribal operations known as racinos, which are only allowed to offer betting on horse races and video gambling machines.

Benjamin says the idea to legalize full-scale casinos has come up in the past and was never an easy sell: “There’s always been a lot of controversy about the exact geographic locations in which gambling might be permitted, whether it should be run by the government or run by private enterprise under government regulation.”

But after a year like the one Cuomo had in 2011, it’d be hard to bet against him. Bill Eadington is the director of the University of Nevada at Reno’s Institute for the Study of Gambling. Eadington says legalizing casinos has historically been easier for politicians during hard economic times.

“They feel they need to legalize casinos because if they don’t all of their citizens are going to cross the state line and go to casinos in the next state over,” said Eadington.

And that is an option for New Yorkers. Pennsylvania has had gambling since 2004. Atlantic City has been around since the 70s. Maryland, Massachusetts and Connecticut all have gambling of one kind or another.

But the linchpin of the governor’s plan is something that could draw gamblers from far-and-wide – a casino in New York City.

“That could be a game changer,” says profesor Eadington.

He says Cuomo’s proposal for a convention center at the Aqueduct Racetrack combined with the conversion of the existing racino there to a full casino would be a huge draw.

“Location is critical for casinos and location relative to population centers is really the driving economic dynamic and so New York City is one of the most attractive potential casino venues in the United States right now,” Eadington Says.

He also say the best way to leverage location is to give individual operators monopolies on gambling in each region through an open bidding process.

But that, says Susan Lerner of Common Cause New York, is a recipe for influence buying.

“One of the things we would see immediately is a significant increase in campaign contributions from gaming companies and I think we will see an increase in the amount of money that the gaming industry spends on lobbying,” said Lerner.

Common Cause’s Pennsylvania office found that, between 2001 and 2008, the gaming industry there and its lawyers and lobbyists contributed almost $17 million to state politicians.

James Browning from Common Cause Pennsylvania says they looked at the top recipients and found clear ways that the industry’s investment had paid off.

“Three of the people were State Supreme Court justices and the industry has won something like 13 or 14 decisions in a row in the state supreme court,” says Browning.

He cautions that the debate about legalizing gambling will likely focus on whether or not its social costs are too high, which could deflect attention from the gaming money quietly pouring into Albany.

That money will have the potential to influence a lot of elections – the constitutional amendment process takes a while. First, an amendment has to pass the legislature. Then, after a general election, the new legislature has to pass it again. And finally voters get a say before it becomes law.

Read and hear more at InnovationTrail.org.

PHOTO: Tioga Downs / Courtesy photo
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