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Tuesday, September 30, 2014

Bonus? What Bonus?

I was looking at the Meeting Book for Monday's hastily-called NYRA Board of Directors meeting (it wasn't announced until Friday afternoon), and I noticed a pretty hilarious omission from the minutes for the last meeting, held on August 6 in Saratoga.  As you may recall, the big news coming out of that meeting - other than the attempt to bar reporters who didn't RSVP - was the $250,000 bonus granted to CEO Chris Kay....an announcement which brought a mixed reaction at best.

However, you would never know that from reading the minutes of that meeting.

    2. Report of the Chair.

Mr. Wait welcomed new Board member, Mr. Holliday, who serves as Chief Executive Officer of SL Green Realty Corp to replace Ms. Rosenthal, who resigned earlier this year. Next, Mr. Wait highlighted the recent accomplishments of NYRA including the addition of new members to the NYRA senior management team, improvements in the backstretch area, payment of outstanding debts and advances in equine safety. Then, Mr. Wait recognized the senior management team and employees led by Mr. Kay for all their hard work.

.........

b. Compensation Committee

Mr. Tese gave the report of the Compensation Committee, particularly its input on the CEO’s performance and compensation. Mr. Tese and the rest of the Committee congratulated Mr. Kay on all his achievements in creating a strong management team, transparency and enhancing the guest experience.
Yes, they recognized and congratulated Mr. Kay.  But there's no indication whatsoever that he was granted a bonus....just a small detail gone unmentioned!  I looked at the Open Meetings law, and the minutes are only legally required to mention items that are voted on by the board.  So it would seem that they are not in violation of the letter of the law, but I'd say that it surely is contrary to its spirit.  One might think that this was written by Communications Director John Durso, Jr.  I didn't know that board meeting minutes were subject to PR BS, at which Mr. Durso is quite proficient - but I guess I was wrong.

It's particularly funny that Tese glossed over the bonus while also congratulating Mr. Kay on promoting transparency!  Seems to me that NYRA has instead become increasingly insular and paranoid over the last year.  The most recent example of that is the sudden embargo on announcing Belmont attendance figures.  Maybe they didn't want to be forced to announce a disappointing crowd on Super Saturday.  (And, given their secrecy and deception when it comes to attendance nowadays, I have every right to make my own assumption that it was indeed disappointing......no doubt they'd be crowing if there were 25,000 people there.  I was not there myself, so I cannot venture a guess.)  Towards the end of the meeting, Chris Kay started to talk about how Churchill Downs doesn't announce attendance figures, and then seemed to catch himself and abruptly broke off.

Otherwise, I'd have to agree with Tom Noonan's assessment of the meeting; it was largely a bore.  Once again, Chris Kay got to drone on about all of the new TVs at Saratoga.  He laughingly reported that attendance there was up by 12% over last year, of course without mentioning that they counted season pass holders who weren't actually on track.  He talked about the year-over-year comparisons, and how the numbers were hurt by 16 more races coming off the grass than last year (which the Form's David Grening says is simply untrue).  And he talked extensively about how the "quality" of racing had improved at the Spa over recent years.  We heard that word tossed around without context, and I'm not sure exactly what that assessment is based on.  I, for one, would not agree.

It was a bit interesting listening to some of the breakdowns of the revenue numbers.  Of the $7.8 million increase in operating revenue through the first eight months of the year, just $1.2 million came from net wagering.  $1.7 million was from increased admission fees, $1.2 million for seat sales; pricing of both of those have been raised.  Money from sponsorships was up by $864,000, food sales by $834,000; there was $1 million in new revenue from the source fee on out-of-state ADW's.

NYRA says they still are on track to show a profit separate from VLT money for 2014.  But again, keep in mind that slots money is used to inflate purses: some $40 million in VLT purse money was distributed through Aug 31.  Without that money, NYRA would not be able to offer the purses that, in theory, help to generate increased betting revenue due to the larger fields that they attract.  And Resorts World has provided $21.5 million in VLT-fueled capital improvements this year.  Without that, NYRA would be unable to make crucial infrastructure repairs and basic improvements (such as the Saratoga TV's); nor the other 'guest enhancements' that allows it to justify all of those price increases that are so integral to their improved performance.  So, it's one thing to show a profit on a piece of paper....and it would be an excellent start in the quest to be independent of the insidious slot machines.  However, the notion that this would mean that NYRA would still be profitable if Resorts World burned down to the ground tomorrow is simply not something we can assume would be the case.

Chris Kay also hinted at further ticket and seat price increases for the Belmont Stakes, saying that they would look at the Derby, Preakness, and Breeders' Cup as points of comparison.  The problem with that is this: the Derby and the Breeders' Cup stand on its own; the Preakness is always of keen interest unless the Derby winner doesn't run.  The Belmont is very much dependent on the outcomes of the prior two Triple Crown races.  This year, it was a boom.  Next year, it could be a bust.  And while Kay pointed out that seating sold out prior to the Preakness last year, a whole bunch of other people who showed up in 2014 could be priced out of a non-Triple Crown event in 2015....and I don't care how many other Grade 1 stakes the day is stacked with.

More on the board meeting can be found here and here.

Board Member Doubly Confused

Been meaning to mention something that I heard during the public comment hearings last week. Honestly didn't have a chance to watch most of the three days, but happened to catch this: A speaker who expressed revulsion towards casino gambling in general drew a rebuke from a member of the location board. I think I know who the speaker was, but they were all off-camera, so I won't venture a guess as to who he (which certainly gives away nothing) was. Anyway, the location board member pointed out that the question of whether or not there should be casinos is not the question here. That has already been decided, he pointed out, with the measure being approved twice by the voters, and once by the legislature.

Of course, he had that backwards. The legislature has to pass a constitutional amendment twice, after which it goes before the voters, once. I don't think that's a small point. For one thing, c'mon man, these guys should know that! This board seems to be earnest, but from time to time they have displayed befuddlement or ignorance of basic points. I don't really feel as if they have dived into all of the background and facts as much as they should have. Another example of that is the fact that they had to be told by an East Greenbush opponent to go and visit the site. Really, they should have already made inspections of all of the proposed sites, if they were really doing this right. Instead of cramming the three public comment sessions into three days, they could have taken a day (or two in the case of the Hudson Valley region) to go check them out....and maybe chat with residential and business neighbors-to-be who maybe couldn't travel to Albany or Ithaca or Poughkeepsie to state their case, for or against.

Anyone who truly believes that the voters approved this thing twice is giving more weight to the idea that the people are for this than is warranted by the one vote based on biased ballot language, and carried in part by support in areas not immediately affected, like NYC. And it's also interesting to consider what would have happened if indeed the voters needed to approve this twice and the second vote was set for November. Assuming that the ballot language would be stripped of advocacy, now that good government groups are hip to that scam, and considering all of the much-publicized bankruptcies in Atlantic City (as well as the declines in the racino business in the state), I would think that a decently-funded opposition campaign would have had a decent chance of success, don't you?

 

Sunday, September 28, 2014

Yonkers Ain't Buyin' It

Empire City Casino at Yonkers Raceway is having none of the talk from Genting that a casino in Tuxedo won't hurt them.

"The revenue from this single property is nearly $300 million a year just for education and we employ nearly 1,400 residents, most of whom are from Westchester, so it puts at risk not only the revenues that are generated by one of the most successful casinos in the state but also would ultimately mean layoffs as well," Duffy told the Journal News. [Politics on the Hudson]

Yonkers, of course, is quick to play the jobs card here. As we mentioned in the prior post, Genting CFO Christian Goode is saying that a Sterling Forest casino would not hurt Yonkers because gamblers there (and at Resorts World) are largely those with just $60-$80 to spend, and they won't cut into that budget by traveling. Before we go on, that brings up a couple of points: That makes perfect sense given my visual observations of customers at Aqueduct; that as opposed to those photos of affluent-looking young folks that you see on racino websites. And, at the risk of sounding presumptuous, it seems unfortunate that those with a limited amount of disposable income choose to dispose of it by sitting in front of a zombie-inducing machine that is eventually going to take most or all of it. (And even more distressing that this is now an accepted way of balancing state budgets and subsidizing horse racing.)

Yonkers will tell you that they've lost 15% of their business since Resorts World opened at the Big A. Net win figures I've seen are more like 11%.....but let's go with their figure. That is business lost to a racino located 24 miles away....and one which has aggressively provided free busing from areas in and around the city. (Their big ugly red buses have become quite ubiquitous around town.) So, how much more business would they lose to a full-blown casino located some 40 miles away? And one which has made it clear that they are more interested in big-money baccarat players from around the globe than small-time slots players? And where blackjack tables will have $25-$50 minimums? (In a recent interview, Yonkers GM Bob Galterio broke down their customer base as such: 15% NJ, 7% CT, 30% Westchester, 20% Bronx, the rest from the other boroughs and Long Island.)

So how much business would they really lose to Sterling Forest? Or, to a casino in Woodbury or thereabouts? I'm not going to guess. What I think we can surmise however is that, eventually, as these things proliferate here in NY and in NJ and in Massachusetts (perhaps), each will, for the most part, serve a local customer base. Beyond that, whether any of them can really draw customers from around the region, based on amenities such as golf or water parks or spectacular views, remains to be seen. (For this purpose, let's exclude Genting's grander scheme of flying in customers from Beijing.) With all the talk about the proposals being considered, this whole idea of a "casino resort" in rural areas of NYS attracting families is a totally unproven business model. We do know that the business model of resorts without the casinos in the Catskills was a failure. Whether Mom and Dad will really bring the kids so they can slip off and play casino games surely remains to be seen. I found it quite surprising that only once did any of the board members question the concept during the oral presentations....and that question was posed to Howe Caverns, which actually does have a track record of attracting tourists from beyond their immediate area.

- Noting that his location board heard from 415 citizens during the three days of hearings, and received around 3,000 written comments, chairperson Kevin Laws says that this is "true democracy in action, hearing directly from hundreds of individuals who feel very strongly about the future of their communities." Of course, true democracy requires the participation of both sides. It's one thing for the people to speak. Those making the decisons have to also truly listen. We'll reserve judgment for now.



Friday, September 26, 2014

Friday Casino News and Notes

Traveling for a few days, so I'm a bit behind....but here's a good recap of the third and final day of the public comment hearings; this one for the three Southern Tier applicants, which took place in Ithaca on Wednesday. Opposition seemed scarce for the Traditions project near Binghampton (a reference to a "small grassroots group") and Tioga Downs - just one opponent out of around 20 speakers.

That Tioga speaker noted that "Everything there seems to be less," and that could be a concern for Gural. Remember, the board got him to admit under questioning that only 900 of the 1200 job number would be new positions. So Tioga surely lags in that area as compared to the other two....though Gural's political connections may very well render that moot. I don't think that Gural would have built a new parking garage if he didn't think he has this in the bag.

The Casino Free Tyre group was out in force to make their case against the Lago Resort and Casino proposed for their little town. However, Wilmorite was able to rouse 33 people to speak in support of that project....a stark difference to Capital View in East Greenbush, who didn't even try, for whatever reason to bring supporters, perhaps, as this reader suggested, because they don't have to. Still, when the location board members look back fondly on their three day marathon, I would think that the three groups who spoke out forcefully - those in East Greenbush, Tuxedo, and Tyre will stand out from the others and leave a significant impression. Unless of course the political outweighs the practical; and in the case of Tuxedo, the sheer scale of the Sterling Forest proposal dwarfs all of the other factors....both those pertaining specifically to this project, or with respect to the whole question of Orange County vs the Catskills, and what the real priorities of the casino law is as interpreted by this board.

 

Genting CFO Christian Goode poo-pooed the notion that Sterling Resort would significantly hurt Yonkers. He called racino customers "convenience gamblers" with a modest budget.

"When you start thinking about that, if somebody's got $60 or $80 to spend, you can easily assume today with gas prices and tolls, that you're going to take 25 percent of their spending power. We don't think that person's going to go up here," he said. [Journal News]

(That's why I think that the cannibalization of Saratoga harness may not be as bad as people are saying.) And speaking of poo-poo, that's been the attitude by Genting all along to the ruling by the Palisades Insterstate Park Commission that they can't build a new Thruway exit there.

Goode said the commission "acted prematurely," and the state Thruway Authority would control whether an exit were built. Having the exit is central to the casino project, and Genting is confident it would be built, he said.

Maybe they know something that we don't.

- A minority owner of Vernon Downs, which is also majority-owned by Gural, says that a casino in Tyre would hurt his racetrack-racino, "putting its entire existence into question."

Tyre is closer to Syracuse than either Tioga Downs or the town of Glen. Greenberg says Gural wouldn’t have supported the state approving commercial casinos last year had he known then there would be a competitor as close as Tyre. [Daily Sentinel]

Well, I think he probably would have anyway.. And it may not be as bad as he is saying, at least according to the Genting theory explained above.

- Republican Attorney General candidate John Cahill says that he will use that office's organized crime task force to vet the casino applicants should he be elected.

"These are sophisticated deals, potentially involving offshore investments, foreign players and incredible sums of money," Cahill said. "The organized crime task force has the expertise and the personnel to make sure New Yorkers are safeguarded from fraud, crime or even terrorist activities." [Albany Times Union]

As we've mentioned, we haven't seen that level of scrutiny, as there was in Massachussetts....enough to dq Caesars there because of an alleged tie to an alleged mobster. The location board is required to use the State Police to investigate, which I imagine will only take them so far. However, Cahill would take office on Jan 1 should he upset incumbent Eric Schneiderman. That might be too late. After the location board announces its recommendations, it's up to the Gaming Commission to actually award the licenses. You can bet that, should Cahill win, the governor will see to it that the job is done before New Year's Day.

 

Tuesday, September 23, 2014

East Greenbush Opposition Should Seal the Fate of Capital View

The public comment hearings go on, Tuesday in Poughkeepsie for Catskills/Hudson Valley, and Wednesday in Ithaca for the Southern Tier.

During Monday's session in Albany, two groups took center stage: supporters of a casino at Howe Caverns, and opponents to one in East Greenbush.  The two groups seemed to become fine friends as the day went along!  There were 28 people who spoke about Howe Caverns, and not a single one was opposed, according to WNYT.

If you recall, during the oral presentations a couple of weeks ago, Saratoga Racing and Gaming's Rita Cox, when asked about the opposition in East Greenbush, indicated that she didn't know where it was coming from.  One of the many speakers against the casino - 50 out of the 61 who spoke on the topic - asked the board whether they now know exactly where it's coming from.  Board chairperson's Kevin Law's answer was quite affirmative. 

[Law] told the crowd during a day of 145 speakers and 11 hours of testimony that "we have no doubt that Schoharie County wants a casino," drawing hurrahs from the crowd of Howes Cave backers. He also said he got the message from opponents of the East Greenbush plan for Thompson Hill, thanking one of the foes of the project for educating the board.
The speakers opposing the Capital View casino, proposed by Saratoga harness and Churchill Downs, covered all of the bases: conflict of interest, the inappropriate location in a residential area next to a girl scouts camp, the complete story behind a Wall St Journal article that the developers deceptively used (a portion of) to try and make it seem as if town residents are needy (the article in fact blamed the town's poor finances on "questionable employment contracts and illegal payments to town officials"), the bait-and-switch which resulted in a far smaller project (and the resulting defection of one of the board members who voted for the plan), and behind-closed-doors maneuvering by a town board being guided by the developers' lobbyists.....who, for example, told them to have only one presentation to the town because "any more continues to promote 'negative' side more than anything."  (The lobbyist who gave that advice, Morgan Hook, tweeted pathetically and sophomorically early on in an attempt to discredit the opponents.  He asked the group to disclose its donors, which is absolutely precious considering that, in East Greenbush, he is operating in a legal-loophole netherworld in which his clients are not required to report their lobbying expenditures.  Not surprisingly, he shut up as it became quite apparent that the opponents are genuine residents acting quite genuinely.)  One resident told the board that she has a letter confirming that the NYS Attorney General's pubic integrity board will investigate the complaints about the conduct of the town board in supporting the plan.

Almost as pitiful as Hook was the appeal by Albany mayor Kathy Sheehan, on hand to support the East Greenbush casino after reaching an agreement with the developers for an $11 million bribe.  As if this is really any of her business.  I think she has a lot of damn gall.

It surely appears as if the location board got the message.
"I've learned a lot today," Law said. He noted that 70 percent of the ranking of a project involves its economic development impact, 20 percent on how the locale will be affected and 10 percent on workforce issues. "For that 20 percent, hearings like this are tremendously helpful," Law said.
At this point, it seems almost inconceivable that this board would go against what appears to be the overwhelming sentiment of the town's population.  Whether the Capital View developers either couldn't round up more people to talk in favor of the casino, or they didn't do so out of overconfidence, arrogance, laziness, or incompetence, it seems to me that they should be DQ'd at this point.  If there's any remaining doubt amongst the board members, they should do as was suggested and go visit the site.  (Actually, it also seems almost inconceivable that they haven't already visited all of the proposed sites.)  

Robert Williams, the acting executive director of the Gaming Commission, wants us to believe that the board is truly independent and that the process is not rigged.  This would be a good test.  Given the involvement of the prominent Albany lobbyist James Featherstonhaugh (and his personal ties to Governor Cuomo), this is one of the proposals on my list of those that are politically favored.  If it is selected over the insistent cries of opposition (and the threat of the project being held up by lawsuits), then that would, in my opinion, put the lie to any claims that the outcome of this process is not, at least to some extent, preordained.

More on the hearings in Odato's piece, and this one from WNYT, and this one from the Troy Record.  There was broad support for the Rivers Casino in Schenectady - 43 out of 50 speakers in favor (though some angry stories from Rush Street Gaming employees in Illinois) -  and not much comment on Rensselaer - only 13 speakers, 11 in favor, including that city's mayor Dan Dwyer spoke in favor. 

In other news, it was revealed that a consultant for Genting was offering $75 to recruiters for each resident they could get to go to Poughkeepsie on Tuesday and declare their support for the Resorts World Hudson Valley proposal in Montgomery, NY (while wearing a pro-casino T-shirt).  Here is the memo.  "Similar to a presidential election, the choice we make, or don’t make, will have far reaching consequences."  Well, it seems that we end up involved in Middle East wars no matter who we elect as president, so this is probably even more consequential to those people living in the immediate vicinity of a casino.  The recruitment website was taken down after Capital New York questioned Genting about it.

Senator John Bonacic weighed in - once again - to urge the board to shun Orange County in favor of the Catskills. 
The four-page letter repeatedly notes the intent of the amendment to expand casino gambling as outlined by Gov. Andrew Cuomo and Bonacic himself in New York beyond Indian-run gaming halls was to boost the economic outlook of financially strapped regions.

“Voters throughout New York state relied on these statements, and others like them, when they passed with over 57% support, the constitutional amendment necessary to bring about this process,” Bonacic wrote. [NY State of Politics]
- The New Jersey State Senate......that's right, New Jersey!....has asked New York to drop any plans for the Genting casino at Sterling Forest in Tuxedo.
The resolution, sponsored by state Sen. Paul Sarlo, D-Wood-Ridge, says the proposed Tuxedo, N.Y., casino “would impart an incalculable environmental footprint on this preserved area, threatening New Jersey’s drinking water, and bringing substantial traffic and pollution into the area.” [Bergen Record]
Genting responded....and in this particular case, it's hard to argue much with what they said!
"We aren't shocked that politicians in a state struggling to save its very existence in the gaming space would object to a destination resort that would heavily compete with Atlantic City and future North Jersey casinos,"
Tuxedo is less than 20 minutes from the Jersey border, and around 45 minutes from the Meadowlands.

Monday, September 22, 2014

Public Comment Session Provides Chance for Casino Supporters Too

The focus on this blog has been mostly on the groups that are trying to stop a casino from being built in their town....such as Save East Greenbush, whose attorney was scheduled to speak at Monday's public hearing, now underway, at 8:05 AM.  (Three 12-hour marathon sessions, one in each region.)  He'll be followed by a host of other opponents to the project, including the CEO of the Girl Scouts of Northeastern NY, who will be speaking out against the inappropriate placement of a gambling venue bordering their wooded camp for girls. [Times Union]

But there will also be speakers from communities that are apparently largely in favor of a casino.  Based on this video below cooked up by the Howe Caverns bidders (who obviously have no qualms about playing the Hurricane Irene card), some of those appeals could be quite emotional.




On Sunday, there was a pep rally for the Howe Caverns casino which drew 1,500 people. 

With planes flying overhead, and live bands in the background, organizers said they are ready to make the final push in the fight to get a New York casino license.
The pitches made in favor of the Nevele facility could be even more heartfelt considering how long the Catskills region has been trying to attract a casino, or two.  Nevele CEO Angel Brummer says that this is the first time she’s been involved in a project that has 100 percent community support. [Daily Freeman]  (This is also the casino that will completely eliminate unemployment in Ellenville, or so we've been told; so this group likes to speak in absolutes!) And indeed, these Catskills communities are desperate for casinos; they've been trying to get them for some three decades.
Widespread support for the project is evident, not only by viewing the list of endorsements the project has received — which range from local officials to chambers of college, tourism officials, area colleges and not-for-profit organizations — but also by the proliferation of signs placed in the yards of residents throughout southern Ulster County welcoming the Nevele back to the community.
We'll hear similar appeals from the supporters of the two projects bidding for licenses to build at The Concord, in Sullivan County.....including from Scott Samuelson, the chairman of the county legislature.  (And also from Orange County officials.  A casino sited there would preclude the Nevele being selected, as they affirmed to the location board during their presentation that they will not build under that circumstance.  Should make for a lively session on Tuesday.)  I suppose we'll also hear from people in Newburgh talking about the dire economic condition of that city.

Those will all be passionate stories to be sure.  People in those communities desperately need jobs.  It's hard for an outsider to tell them they shouldn't be given this opportunity to see them created.  It's a sad situation that it has come to this.  Because while a casino may, for now, fulfill their promises in that respect and provide some relief to the long-term unemployed, there's no question that some, if not a good deal, of the money that supports them will come from those who can't afford it, and/or who have an issue with gambling.  If the Catskills got a casino resort 30 years ago, then it would no doubt have been something that would have attracted customers from around the region.  Now, it's far more likely that much of the revenue will be local and a regressive revenue source.

We shall see, but I would think that casino opponents have a better chance of influencing the outcome than do the supporters.  Whereas repeatedly singing the praises of casinos can have, I would imagine, diminishing returns as the days go on (and on, and on...), the more opposition in a community that can be established, would - again, in my estimation - have a better chance of sowing the seed of doubt amongst the board members.  Doubt that the particular project qualifies in relation to the others in satisfying the 20% of the evaluation process that is supposed to be devoted to community support.  And doubt that the project won't be delayed by a flurry of lawsuits by impassioned opponents.

Saturday, September 20, 2014

A Declaration of Independence (FWIW)

Robert Williams, the acting executive director of the NY Gaming Commission, wants us to know that the casinos decision isn't rigged.

"This is not preordained," Williams said Friday during an editorial board meeting with the Times Herald-Record. "This is a real process, a real functioning process. I personally have had no connection with the Office of the Governor related to that. Nobody wants anything to do with us, because they are afraid of appearing like they are involved." [Times Herald-Record]
Hmmm, not sure what prompted that.  Unless it was suggested (and written) by Joe Percoco.

Of course, given this governor's history, it's entirely fair to be skeptical of any process ultimately under his purview that is said to be "independent." And we certainly don't have to dig too deeply for examples of that, to be sure.  As you may know, his administration is under federal investigation over alleged interference into the affairs of the Moreland Commission; and for its possible abovereferredto attempts to coordinate an organized response from the participants.
“He’s not looking for rubber stamps,” [Moreland Commission co-chairperson William] Fitzpatrick said [when the commission members were introduced]. “He’s looking for an independent commission, and we’ll do what Deep Throat told Bob Woodward to do: Follow the money.” [NY Times]
Later, of course, Fitzpatrick complained that “the interference has got to stop" (before he denied any interference at all) and Cuomo ultimately derided the notion that the commission was ever independent at all.   And then there was the matter of the IDC's coalition with the minority Republican conference in the State Senate.  "I have no intention of getting involved in either situation,” Cuomo had said of the leadership in the Assembly and the Senate.  Earlier this month, Capital New York completely blew the doors off that lie in this report, about which I've seen no retort from the Cuomo administration.

So, Rob Williams can say what he wants.  I think he's a totally honest guy, and that we have no reason to doubt that he believes what he says. However, given Cuomo's history and the connection that he has to each of the five members of the location board, I'm sure he has all of their text numbers stored somewhere, and doesn't have to go through the executive director to let his wishes be known. My take all along has been that there had to have been some kind of backroom deal made before last fall's election to get the NYGA, which includes the deep-pocketed Genting, to back off from their stated opposition to the referendum.  I have little doubt that, had they put their full financial resources into an advertising campaign, the vote result could have been different.  So, I still believe that this process is tilted towards Jeff Gural (Tioga Downs), who put $600,000 into supporting the referendum, then-NYGA president James Featherstonhaugh of Saratoga harness (East Greenbush and Newburgh proposals), and Genting (two Orange County proposals and an interest in the Adelaar-at-The Concord proposal) to walk away with casino licenses. This committee is free to prove me wrong.

 - Gannett's Joseph Spector (who you really need to be following on Twitter if you are interested in NYS politics) reports that Kevin Law, the chairperson of the Gaming Facility Location Board, is quite serious about the idea that any preconceived notions of how many licenses they will award, and where, are exactly that. “It says up to four. So the decision could be made to do less than four.” And he noted that while an Orange County casino may make the most money, that is not the only intent of the law.
Law said the objective is to balance between the needs of each region and the casinos that can be most profitable.

He also noted that New York has to mindful of growing casino competition in other states, pointing out there may one day be casinos in northern New Jersey – just across the border from Orange County.

“It’s really going to make our jobs very challenging. We want to do something good for communities that are starving for this type of investment. We’d love to do something to promote tourism upstate,” Law said. “But you have to also take into consideration what’s happening around us in the gaming industry.” [Press Connects]
Sounds in this statement as if Law is laying the groundwork to back off from the Orange County idea. While that might not result in the best bottom-line result for the state, it would, I believe, be the best result politically for the governor.  He could trumpet that he kept his implied promise that he would come to the rescue of the long-suffering Catskills region.  The people there would be extremely happy.  Might turn out to be too bad for them that the location board is so damn independent.

Friday, September 19, 2014

Tyre Casino Opponents Take it on the Chin

Casino opponents in Tyre, NY suffered a stinging and sweeping legal defeat when a judge thoroughly dismissed their suit against the Town Board.  The plaintiffs were challenging what they consider to be inadequate, hasty or incomplete environmental reviews in complying with the requirements of SEQRA.  We wrote about the lawsuit....and how the SEQRA process seems to favor the municipal boards trying to push these casino projects through.....in this post.  The decision, embedded below, demonstrates how and why the latter is the case, and surely comes as a cold slap in the face not only to the folks in Tyre, but to any other groups that are attempting to halt a casino on a challenge based on SEQRA.




One part of the decision in particular seems to simply fly in the face of common sense.  The 7th and final cause of action was based on the Town failing to make a draft of Part 2 of the SEQRA form (the Full Environmental Assessment Form).....and again, I'd ask you to please refer to this post for the background if you are interested....available to the public at or prior to the June 12 meeting at which the Town Board issued its "negative declaration" that the project would not cause any negatively material environmental effects.  Justice W. Patrick Falvey pointed out that the burden is on the public to request such documents, and noted that a request made by the main Petitioner Desiree Dawley at that meeting was made to one of the Town's engineers, and therefore and technically not to the town board. (ugh.) Particularly bizarre was that "the court finds that the Town did not utilize a high speed internet connection, nor did it maintain a regularly and routinely updated website.  Thus the Town was not required to post the resolutions.."  Oh man.....seriously?  Besides the fact that this would, by extension, relieve any government agency of any public notification requirement if they didn't endeavor to maintain a modern website (and/or if the town didn't have a local newspaper)....it seems to me that the Town of Tyre website functions just fine.  In fact, I obtained the SEQRA forms that appear in the aforementioned background post from that very site.

The main points of the decision in my view are this:

 - The oral discussions that the Board had at the June 12 meeting constituted, in the Court's eyes, completion of the critical Part 3 (in which the lead agency - the Town Board in this case - articulates its reasoning behind its dismissal of potential environmental concerns that are raised in Part 2), even though it wasn't actually put in writing and posted until July 11.  This could certainly be taken as a signal by other town boards who have not yet completed SEQRA that shortcuts to finishing the paperwork are wholly permissible.

This part of the decision comes despite the fact that, as pointed out to me by a concerned resident of Tyre, according to an October 2013 revision of the model EAF (as noted on the Department of Environmental Conservation (DEC) website) in order for the form to be "adequately completed," "Part 3 must contain a discussion of why the relevant impacts identified in Part 2 may, or will not have, a significant adverse environmental impact."  That clearly was not the case on June 12.

 - It affirms what we discussed previously - that the Town Board, as the "lead agency," has wide leeway to determine what is or, more applicable in these cases, what is not a potential environment hazard.  The decision takes us step-by-step through the record of the discussions at the June 12 meeting about each of the items identified in Part 2.  Some of the deliberations - and I think I'm probably being generous in that description - included consultations with one of the town's attorneys or engineers (for whatever that is worth, considering that they are in the employ of the Town Board).  But consider this segment: 
The Board completed their review of the environmental impacts at the June 12, 2014 meeting by covering impact on human health, consistency with community plans and community character, with the Board members each stating "no" regarding significant environmental impact for each of these potential impacts.
And viola!  Just like that, based on the judgment of Town Board members with a vested interest in the outcome (to what exact extent we'll never know due to the 'loophole' in the law which exempts lobbyists from reporting their activities in communities with populations of less than 50,000), those Town Board members went ahead and determined the outcome themselves.  As we've said, the question of community character, for one thing, is surely one that can be interpreted differently by those with differing viewpoints; though it's hard to see how a casino could possibly not have a significant effect on a community with a population of 900.

Back to the Department of Environmental Conservation site, we see just how daunting it is for the public to challenge the determinations of a "lead agency" that is determined to shape SEQRA to its own desires and purposes.  In fact, not even the DEC has a say in the matter! 
6. Since DEC issues the regulations, doesn't it have the authority to at least notify a lead agency that they are not correctly meeting the requirements of SEQR?
No, because the SEQR statute did not provide any such oversight authority, to DEC or to any other entity. If an agency contacts DEC with questions regarding the SEQR process, staff can give them informal advice regarding the SEQR process in general, or informal interpretations related to their review of a particular action. However, DEC cannot intervene in any lead agency's conduct of SEQR, nor stop any agency from conducting its SEQR review, even if the review is not following the correct procedures as set forth in ECL Article 8 or the SEQR regulations.

And as far as the public challenging a SEQRA decision with an Article 78 proceeding?  Good luck with that.
Individuals or groups who can demonstrate that they are sufficiently environmentally harmed by an agency's decision may seek judicial review under Article 78. If the party or parties that bring an Article 78 proceeding against an agency cannot sufficiently demonstrate to the court that they suffered "harm" by the actions of the agency, the lawsuit may be dismissed before the subject of the agency's conduct and decision is even discussed.
It is hard, I would imagine, for anyone to prove "harm" when the project has not yet even broken ground.  It is also explained that the courts "will look to the SEQR record to see if the parties bringing the challenge did participate in the lead agency's proceedings, and are less likely to be sympathetic to the challenge if those parties did not initially raise their concerns within the lead agency's SEQR process."  The Tyre opponents claim that they did not receive adequate notice of the discussion of these specific documents in order to be able to participate - the agendas refer only generally to "SEQRA Review."  But the judge obviously disagreed.

An attorney with experience in Article 78 proceedings writes to say that they are so hard to win because "if there is a rational basis that is not arbitrary and capricious and supported by substantial evidence (all terms of art defined in numerous appellate case law rulings), then the administrative or municipal ruling stands. That's true, even if another decision would have been equally correct."  And while the Article includes amongst the questions that may be raised during these proceedings the matter of "whether a determination was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion," the burden of proof is squarely on the plaintiffs.  I suppose there has to be a point at which a negative declaration simply doesn't pass the laugh test; if a town board says that there's no potential hazard to a lake because the lake doesn't exist, and the lake clearly does exist, then I presume that any sane judge has to throw out their decision.  However, there are no such clear cut determinations at play here, and I would guess that's the case in the East Greenbush and Tuxedo suits as well.  I'm sure that none of those plaintiffs are laughing today.

 - I thought this was rather interesting, in an article about the latest attempt by those trying to build a soccer stadium for a Major League Soccer team (the New York City Football Club).  They have turned their sights toward Aqueduct....though whether as a replacement for a razed racetrack or on adjacent Port Authority land is not quite clear.  Of the area, it says here:
Not only has it already been zoned off for entertainment but, as previously stated, the area around the Resort World Casino is in desperate need of rejuvenation. [Empire of Soccer]
Yeah but.....what about.....I thought that the racino was supposed to.......

Oh, nevermind.

Thursday, September 18, 2014

No Exit for Genting?

The "public comment events" for the casino bidding is scheduled for this Monday - Wednesday; 12-hour marathons each day, one in each of the regions being considered for a casino or maybe two.  (Or maybe none. The location board is not actually required to site any casinos anywhere.)  The schedule can be found here.  James Odato notes in the Times Union that the hearings are likely to be "contentious."  Hmm, y'think?  Casino Free Tyre has 21 of the five-minute speaking slots booked, and plans to speak about, amongst other things, an old racketeering case involving developer Wilmorite Management Group (the indicted party was eventually acquitted on most of the charges). Save East Greenbush has 32 slots, and will, again amongst other things, reiterate complaints about the process taken by the East Greenbush town board that are the subject of its pending lawsuit.  The union which is in a dispute with Rush Street Gaming will bus some workers from Chicago.  The Sterling Forest Partnership has ten slots; and a group called CasiNo Orange is opposed to all proposed casinos there.  And there will be casino supporters too.

So, the Gaming Commission has established some ground rules to try and keep things from getting too out of hand.

Decorum

Speakers and participants may not disrupt or otherwise attempt to interfere with any individual’s opportunity to speak. Disorderly behavior will not be tolerated.  Speakers engaging in personal attacks, using inflammatory language or failing to confine remarks to the identified subject or business at hand will be cautioned by the Chairman and given the opportunity to conclude remarks within the designated time limit.

Disruptions. Any person making offensive, insulting, threatening, intimidating or obscene remarks, or who becomes unruly during the Public Comment Event, will be requested to leave at the direction of any Board member. If necessary, the Board will request the assistance of law enforcement for the purpose of maintaining safety, order and decorum.
Each of the bidders is required to have at least one representative there....however, the speakers may not "pose comments or questions" to them directly....and the applicants may not make any "public comments" at all.  That sounds odd and rather awkward.....some of the bidders' representatives may feel as if they are sitting in the dock without permission from the judge to respond as the accusations fly.

Meanwhile, Genting has itself a rather major problem in Tuxedo; all over less than 1,000 feet of County Route 106. That section of the road is owned by the Palisades Interstate Parkway Commission [PIPC]; and in a much-anticipated decision, that body voted unanimously to deny access to Genting.
 Access to County Route 106 would help Genting build a new exit — interchange 15B — on the New York State Thruway, by allowing it to connect to Route 17A. That would provide access to the Sterling Forest Resort casino, which would be built on private property. Genting has said that building the casino hinges on building the exit, which would make it easier for an estimated 6.9 million annual visitors to reach the casino without using a longer, more circuitous route. [Times Herald-Record, limited free access]
Here's the problem:











There currently is no exit there off of Route 87 (the NYS Thruway); Route 106 passes underneath and hooks up with 17A.  In addition to a section of the road, the commission also controls Sterling Forest State Park, which would be adjacent to the casino. 
Now, Therefore, Be It Resolved that in the Palisades Park Commission’s opinion, the proposed development of New York State Thurway Exit 15B, in conjunction with Sterling Forest Resort, is not in accordance with our stewardship mission and the public trust to preserve the scenic beauty, natural resources and public enjoyment of Sterling Forest and Harriman State Parks. — from Palisades Interstate Park Commission Sterling Forest Resort Resolution  [via Sloatsburg Village Local News & Community Life]
So, that's a big issue for Genting.  Other than the Asian baccarat players that they plan to shuttle into Stewart airport in private planes, getting there would be a major issue, enough to make it a no-go; at least that's what Genting has said. The ironic thing is that, according to the Herald-Record, it was just last December that Orange County turned Route 106 over to the PIPC.  DOH!  Now, they might want it back; but the decision stands, and only votes in both the NY and NJ legislatures can reverse it. And while Genting surely has enough money to pay those legislators off mount an effective lobbying campaign, that seems most highly unlikely.  Genting, in an email to the Herald-Record, said:
"By funding the design and construction of a new Thruway Interchange, 15B, and by creating a world-class, destination resort on a currently dilapidated site, Sterling Forest Resort will only expand that opportunity."
I guess we'll see about that.  Genting says they will explore alternate means of building the exit.

 - Interesting article brought to my attention about the Sands casino in Bethlehem, PA.  It is, by far, the most successful casino in Pennsylvania....and they are utilizing a strategy that is a key component of Genting's at Sterling Forest. 
Experts say it's found a niche that hasn't been greatly affected by the economy or competition from the next state. By marketing itself heavily in the Asian neighborhoods of New York, Sands has developed an Asian customer base like few others in the nation. For example, it has 50 tables featuring the Asian-popular game baccarat — more than any other casino in the nation, according to gaming experts.

As a result, more than 50 buses carrying more than 3,000 gamblers from New York neighborhoods of Flushing, Chinatown and Brooklyn flow into the Sands every day. [Morning Call]
Cheaper than flying them in from Beijing too.

 - I wrote a lot here last fall about the "Advocacy Language" that appeared on the ballot for the casino referendum last fall, and the effort by lawyer Eric Snyder to have it altered.  Although those attempts proved to be futile (and the language no doubt had a material effect on the final vote numbers), it appears as if they did not go entirely to waste.  Good government groups are now on the lookout for additional attempts to use ballot language as a campaign tool inside the voting booth; and a court ruling yesterday prevented a similar fiasco. 
In a victory for the segment of good-government groups opposed to the compromise constitutional amendment on redistricting, state Supreme Court Judge Patrick McGrath has ruled that the redistricting commission that would be created by the proposed change “cannot be described as ‘independent’ when eight out of the ten members are the handpicked appointees of the legislative leaders and the two additional members are essentially political appointees by proxy.”
........
The ruling calls on the state Board of Elections to remove the word “independent” from the ballot language. “No adjective preceding the word ‘commission’ is necessary to indicate the subject matter of proposed amendment in a clear and coherent manner,” McGrath wrote. [Capitol Confidential]
The constitutional amendment on the redistricting procedure itself has split good government groups.  It was established in a deal between Governor Cuomo and Senate Republicans by which the latter got their way on redrawing the maps in 2012, despite the governor's prior promises to veto any such partisan drawing of the district lines.  Some feel that the language that bans "partisan gerrymandering" is a sufficient improvement from the current system, in which the process is controlled by the majority party in each chamber.  Others feel that any process which is ultimately controlled by the politicians whose re-election potentially depends on its outcome - as this clearly is - is subject to the usual partisan maneuvering and corruption.  Guess which side I'm on.

Wednesday, September 17, 2014

NYRA Oversight Board Wants Details on CEO Bonus

Franchise Oversight Board member Steven Newman wants to know the precise basis on which CEO Chris Kay was awarded a $250,000 bonus after a little over a year on the job.  In response, at Monday's meeting of the board, Mr. Kay seemed a bit defensive.  Pointedly mentioning that the board "was appointed by Governor Cuomo and other elected officials," he responded:

"The Board has certain criteria that the chairman of the board communicates to me....and then the chairman has made the determination that I have performed in a fashion being consistent with being eligible and entitled to that bonus."
Sensing the defensive nature of the response, Newman replied: "My purpose is not to dispute the bonus.  My purpose is transparency and disclosure."  And considering the way that Charlie Hayward was skewered for his hesitancy to reveal his own salary when NYRA was a private non-profit entity, this surely seems like a fair request now that NYRA is, as Newman noted, "in essence, a public body." From his statement, it would seem as if Kay is very well aware of exactly what those criteria are.  Yet the matter was left with the FOB having to submit to NYRA a formal written request for the information.  Questioned further on the matter, Kay noted that NYRA Board Chairman Dr. David Skorton "has been an advocate for transparency."

Well, I'm glad somebody around here is.  Because I think it's entirely fair to say that NYRA has not exactly been a beacon of transparency of late.  If it were, then I'd think that they would simply provide the details of the bonus instead of making the FOB go through circles to get it.  And that they would have let us known exactly how they were going to count attendance at Saratoga without a newspaper report forcing their hand (and that they would endeavor to count it accurately).  And that they would have made a choice for Director of Communications other than an industry outsider with a clear history of obfuscating the public with bullshit, and with a hostile attitude towards the working press (including illegally barring some members of the media from an open meeting of the NYRA board).  And that they would announce the attendance figures at Belmont (which they haven't since the fall meet began).  That all seems rather opaque to me.

Interesting to hear Kay explain some of the reasons behind the all-sources handle decline for the Saratoga meet (on-track handle was up). 
Kay attributed the off-track decline to a 19.4% drop in bets on NYRA races through the Del Mar system and a 10.6% decrease at Gulfstream Park, which now races live in July and August. [Bloodhorse]
We figured that Gulfstream had something to do with it.  The magnitude of the Del Mar decline is rather ponderous; the handle on its own races was down by 7.3%.  I wonder if running less races and ending the cards earlier in the day might have been a big factor in that drop considering the fact that it's three hours earlier in the day out there.  After all, it was with an eye towards capturing additional handle from western time zones that NYRA moved post time to 1:20 at Aqueduct and Belmont earlier this year (it's back to 1:05 for now).

 - The Massachusetts state gambling commission awarded the Boston-area casino license to Steve Wynn, who will construct a facility in Everett, over the Mohegan Sun bid at Suffolk Downs.  The track will close. 
“We are extraordinarily disappointed as this action is likely to cost the commonwealth thousands of jobs, small businesses, and family farms,” Suffolk chief operating officer Chip Tuttle said in a statement. “We will be meeting with employees and horsemen over the next several days to talk about how we wind down racing operations as a 79-year legacy of Thoroughbred racing in Massachusetts will be coming to an end, resulting in unemployment and uncertainty for many hardworking people.” [Boston.com]
That sucks.  Have to feel for all of the people that will be affected; the horsemen, workers at the track and farms and related businesses; as well as Chip Tuttle and the team at Suffolk who have worked so hard to try and make things work.  However, one can surely argue that a track that can't survive without being subsidized by a casino isn't truly working.  And remember, the people of East Boston voted against having a casino in their community.  By moving ahead with a plan to build entirely on the portion of the property located in Revere (which approved a referendum), Suffolk was attempting an end-around the voters' wishes.  In East Boston, those who constituted the majority of referendum voters are no doubt thinking that justice ultimately prevailed.

On the other hand, Everett is a town that overwhelmingly approved a casino - some 86% voted yes.  “This is going to be a snowball, getting bigger and bigger,” [Mayor Carlo] DeMaria said.  Perhaps the mayor has missed the memo, which actually has the snowball going in reverse. Or, perhaps Boston, by virtue of its location, will be better isolated from the growing competition than casinos in New York, or the MGM resort planned for Springfield, MA, closer to the NY border (though still over an hour and a half from the Capital District).  We are skeptical, as always.....but hope that things work out for the people there.  (Of course, the entire casino question in the state is once again up before the voters in November.)

Tuesday, September 16, 2014

Schenectady Casino Bidder Invests in Slots Games For Kiddies

I mentioned the group opposing a casino in Schenectady the other day; haven't really discussed them here before. Their website, Stop the Schenectady Casino, can be found here.

On their homepage now, there's a link to this report about a multi-million dollar investment by Rush Street Gaming, the company that is hoping to build the Rivers Casino and Resort at Mohawk Harbor in the city, in Ruby Seven, a company that is marketing "social gaming"- or casino simulation games - to kids as young as 13 years old.

Ruby Seven games currently being distributed include “Cats Vs. Dogs Slots” featuring big-eyed cartoon cats and dogs in “a FREE to PLAY slots game with the cutest puppies and kittens, hourly bonus coins, and realistic slot machines [capitalization in original],”and a poker game promising to be “simple to learn.”
The game is accessible via Facebook, where it says that the game "is intended for use by those 21 or older for amusement purposes only." However, if you click on the Terms of Service, it reads:
The Service is intended for use by those 21 or older for entertainment purposes only. By using this Service, you declare that you are 13 years old or older. If you are between the ages of 13 and 18, you declare that your legal guardian has reviewed and agrees to these Terms.
Which I'm sure really happens.  (Apple iTunes has changed the rating to 17+.)  Although the games are said to be "free," in fact, as the report explains, this was actually an $8 billion market in 2012. The games come with free chips (or equivalent), but players have to pay up to replenish when they run out, and they can purchase bonuses and upgrades.

The report notes that Ruby Seven seeks to "bridge the space between land-based casinos, onlinegaming and social casinos." And it suggests the obvious; that Rush Street and its partner are attempting to sow the seeds of casino gambling in kids so that they can convert them to paying customers at their casinos, either online or brick-and-mortar, and possibly acquire behavioral information for marketing purposes, for when they reach legal gambling age.  The meticulously-footnoted report cites a study that concludes: "Studies of adult problem gamblers have reported that earlier onset of gambling is a risk factor for problem gambling."  And that's interesting now that I think about it just based on my personal experience.  All of the people I grew up with who later had an issue with gambling were amongst those with whom I went to Roosevelt Raceway back in high school.  (The tracks surely did their part.  In those days, the gambling age here was 21; I would go when I was 16, I looked and sounded more like I was 14, and only once do I ever recall being turned away at the betting windows.)

This report also notes that these game developers can make it easier to win than it is in actual gaming, thereby creating false impressions as to the odds involved; and that the "social network" aspect of the games and the virtual prizes involved can be as equally alluring as the promise of winning money.  It's an interesting read; and again, the link is here.

The report is dated September 9, the day after Rush Street presented for the Schenectady project, and the same day that they presented for the Newburgh casino that they hope to build in partnership with Saratoga harness (as well as for the Greenetrack proposal near Stewart Airport).  During those presentations, Rush Street emphasized the Best Places to Work awards that they earned at their Pennsylvania facilities.  But the very next day, Jim Odato reported in the Times Union that a casino workers union wrote to the Gaming Commission to complain of "illegal harassment by casino managers including threats, surveillance and other intimidation." 
Asked about the union's complaints, Rush Street Chairman Neil Bluhm and CEO Greg Carlin said the company's record speaks for itself. During two days of presentations to the siting board earlier this week, the company emphasized it has won repeated best-employer awards at its three casinos for years.

"We certainly have disputes with companies all the time, but there is nothing like this anywhere else," said Martin Leary, gaming research director for Unite HERE. The union has 275,000 members in hospitality and food service jobs, including about 100,000 casino workers. [Times Union]
The Schenectady group has also posted articles about the proposed casino's proximity to Union College, and the potential danger presented to students who may be lured there.  I actually went to Union, graduating in 19--......well, a long, long time ago.  Not sure what the student body is into there these days; but I don't recall much in the way of on-campus gambling in the form of poker games, etc.,  Back then, in 19--....well, back then, for horseplayers like myself, the Schenectady OTB office was just a short distance away; and around the block from there was Baum's Newsroom, where one could pick up the NY Post (to keep abreast of the Rangers....no PC's then, not to mention the internets) and the Daily Racing Form, probably for a couple of bucks.  And the Saratoga harness track was about a half hour away; we took many a trip there via Route 146 through Clifton Park, probably a couple of times a week when it was open.  The vast majority of students however made the trip to Saratoga to hook up with Skidmore girls (Union had just recently gone co-ed and the male-female ratio was untenable for guys), and I'd guess that the hormonal instinct is still more powerful than the lure of gambling for most students.  However, I don't want to downplay the concerns; I'd imagine that many of the students whose families can afford to send them there probably have a little disposable income available to piss away, and would therefore be likely targets for a casino operator.

 - City & State reports on the financial woes of Caesars, bidding for an Orange County casino in Woodbury, citing "a streak of quarterly losses and a mountain of debt that is projected to lead the company into a major debt restructuring, if not an outright bankruptcy."  The company points out that the NY bid is through an affiliate, Caesars Growth Partners.  CEO Gary Loveman (one of the smoother presenters that we saw last week) told the location board:
“This entity has in excess of a billion dollars of cash today on its balance sheet, it is very lightly levered and therefore has very sound financial circumstances. And this project, Caesars New York, would exist within the Caesars Growth Partners category. This entity would generate more than $200 million to the state of New York and its various local constituencies.”
.....
But that maneuver has angered creditors, who have found themselves saddled with a weaker set of assets while potentially being on the hook for bigger losses if the company goes bankrupt or refinances its debt.  [City & State]
The piece also points out that Caesars was forced to drop its Massachusetts bid (in partnership with Suffolk Downs) in response to a report by state investigators that expressed doubt about the parent company's debt load, as well as a business relationship with a person with alleged ties to Russian organized crime.  The location board did not question the Caesars team about either of those situations; they skirted around the financial issue by asking generally about the situation in Atlantic City, and about the status of their financing.  Which, once again, raises the question of just how much preparation these guys did, or have done, for the task that lies ahead for them.

Monday, September 15, 2014

Group Pledges to "Bury" Genting in Lawsuits

The Albany Times-Union checks in with an editorial opposing Genting's proposed casino in Tuxedo. The editorial, quite appropriately, accuses Genting of "attempting to bypass the deliberations and virtually buy a state casino license" with its "outlandish" $450 million cash offer for what is a $70 million license fee, and its brash offer to "write you a check today."

Consider how the change in the state's constitution to legalize these full-blown casinos was sold to voters. Recall the controversially favorable — some say unfairly promotional — wording of the ballot proposition last November. It unequivocally stated casinos were intended for "promoting job growth, increasing aid to schools, and permitting local governments to lower property taxes through revenues generated."

Backers portrayed casinos as a panacea for New York's most economically distressed regions, providing jobs and spurring other development. They conjured images of rundown and abandoned resorts in the Catskills and a second lease on life for the struggling region.
The editorial goes on to note that Tuxedo and the surrounding area do not at all qualify as a struggling region; neighboring Tuxedo Park has a median income of over $91,000.

Meanwhile, an environmental group is pledging to "bury" Genting in lawsuits should a license be granted to them.  Whether that in itself acts as a deterrent to the location board picking them remains to be seen...but considering the fact that community support is supposed to be one of the criteria, I don't see why it shouldn't.  There are 16 bidders, and I myself know of only four that have attracted an active opposition - East Greenbush, Tuxedo, Schenectady, and Tyre.  (I'd be more than happy to receive word of any others.)  So, it seems to me that there are plenty of options that would better satisfy the community support requirement.  And I don't see why the board would make a selection that is likely to be tied up in the courts....unless it finds the riches that Genting is promising too much to resist. Which is surely a possibility.
Sterling Forest Partnership opposes the proposed $1.5 billion casino because it is located on privately owned land surrounded by Sterling Forest, a 22,000-acre state park that was created in 1998 after concerted efforts by environmentalists. The group believes a casino of that size would disturb the environment, and a proposed Exit 15B off the Thruway would bring too much traffic to the area. [Times Herald-Record]
As we mentioned, there was an anti-casino contingent from Tuxedo at the presentation last Tuesday, and Genting at least acknowledged their presence; that as opposed to Saratoga Raceway and Casino, whose Rita Cox feigned ignorance of the roots of the opposition in East Greenbush.  Genting says they will work with opponents, and they're making a lot of promises as to how they will assuage environmental concerns; they'll treat runoff, they'll protect wildlife, they'll use low lighting that won't disturb the views.  And to that, I'll remind you that Genting pledged to "work closely with NYRA to transform [Aqueduct] into a casino and racetrack that will be the envy of the country.”  Yet, we were told at a NYRA board meeting by then president Ellen McClain in December, 2012 that Genting failed to follow through on a promise to keep the racing side of the plant clean - NYRA took over maintenance in 2013 - and repeatedly delayed groundbreaking on the Longshots bar which finally opened in April. 

Now, I don't know that we could expect the gentlemen on the location board to be quite that fully immersed in the details and history of all this (although, why shouldn't they be); but I sure would have liked to have heard them question Genting about past broken promises instead of being so concerned about golf courses, proposing hypothetical scenarios that are not going to happen (such as two casinos in the Southern Tier), and asking rote questions about financing, the answers to which are either already in the applications or easily attainable at another time.  Kevin Law told the folks in the yellow shirts to come back for the public comment sessions later in the month; and it's indeed the public that will have to ask the kind of incisive questions that we, for the most part, did not hear last week.

And as far as those lavish illustrations of what Sterling Forest will look like?  I might also take that with a grain of salt.  Here's the original illustration of what the Aqueduct racino was supposed to look like:












And here is what it actually looks like now:












I was very excited about the big water fountain.  Guess it dropped out of the plan at some point, along with the trees and the shrubs and that big tower thing that looks like the Chrysler building.  Anyone who was familiar with the old Aqueduct footprint knows that, for all the supposed glitz, it is really a relatively cosmetic change from the original.  May be a small point.  But the devil is in the details, and should Genting be granted the license to build this thing, I'd bet that it won't be quite as spectacular and glamorous as they portray it to be now.

Friday, September 12, 2014

Genting's Audacious Tuxedo Proposal Has Worldwide Ambitions

Man, it took me a few days (and a couple of excellent music shows) to recover from watching all of the oral presentations by the casino applicants on Monday and Tuesday.  I had a headache for around 18 hours afterwards.  You can read all of my tweets if you care to scroll through my Twitter feed here.  Or here's a serviceable recap of Tuesday's presentations from the Albany Times-Union.

It was all a lot of slick (and not that slick) videos, lofty (and, in some cases, dubious) claims and promises, (deceptive) illustrations of young, affluent looking types having fun, subtle (and not so subtle) putdowns of the competition....but one thing was notably missing.  The other side of the equation. 

Americans, according to The Economist, lost $119 billion gambling last year, most of it at casinos. [Aljazeera America]
Yeah, all that money that is gonna create jobs (for now), fund education, pay for fire truck ladders, and bribe enrich local governments has to come from somewhere.  Out of all of the presentations, only Jeff Gural/Tioga Downs acknowledged that the money lost at casinos is cash that is displaced from other segments of the local economy.  Otherwise, one might think that the money is generated out of thin air. It comes out of peoples' pockets, and while some can afford it, others cannot.  And while all of the bidders paid lip service to the issue of problem gamblers (one, the Nevele, even had a guy from the NY Council on Problem Gambling on hand, nice touch), none addressed the studies that suggest that up to half of casino revenues come from those with a gambling problem.  And I've never heard any studies whatsoever about where/how that $119 billion might be spent/saved/invested otherwise.  And how the overall employment/economic picture might be affected by that.

Look, there are some desperate towns/communities involved here.  Who are we to tell them that a casino won't provide a lifeline for some of their unemployed, inject life into local businesses, and provide much-needed financing for education, infrastructure, and government services?  But the money is, to a significant extent, as one casino operator himself recently conceded, a tax on the poor. I sincerely hope that towns like Newburgh or Ellenville get the relief that they need.  But I also hope that peoples' lives aren't irrevocably damaged in order for that to happen.  And remember, this is not a charitable endeavor, even though it sometimes seemed that way from the tone of the presentations; two of them referred to casinos as "beacons."  These companies stand to profit enormously from the pain of others, at least to some extent.  Otherwise, we wouldn't be hearing from them.

Seems to me that the board, or at least its chairman Kevin Law, bought right into all of the nonsense about water parks and all of these amenities that are clearly intended to gloss over the hard reality of the hardcore gambling facilities they are proposing to build. 
“On one hand, we want to help invest in communities that are distressed or have been historically not receiving the types of investments we would have liked for them to have received.."

But, Law said, “the state’s trying to grow the tourism industry and so there are some applications which would lend themselves to things beyond casinos and take advantage of skiing and golfing and vineyards and other aspects of our great state." [Capital New York]
Oh jeez, seriously Kevin Law?  The tourism industry?  Skiing and golfing?  Dude, you're really gonna fall for that?  Maybe he should speak to his colleague Stuart Rabinowitz, who skeptically questioned the Howe Caverns team about the whole concept of a casino being a family resort destination.  I wish he would have asked every bidder that.  (Rabinowitz was not on site on Tuesday; he observed and participated via the internet.)












“And then you have the economic realities of proximity to the masses of New York City’s population, and the real possibility of New Jersey, perhaps, allowing for casinos north of Atlantic City, which would then lend themselves to, ‘well, are we going to get boxed out?’ And do some of the later presentations make more sense?” Law said, referring to the Orange County proposals.
The Catskills bidders, and those needy towns in which they are proposing to build which are fervently hoping against an Orange location, cannot be encouraged by Law's remarks.  I'm not sure about this guy.  There were some times when he asked prescient questions, and others when he seemed confused, particularly when he asked Mohegan Sun if they were proposing to build at the Concord or at Grossinger's.  (Unless that was a sly commentary about their presentation not making that clear.....though it seemed quite so to me.) And I'm also still not quite sure whether Law and this board just missed the memo that everyone else seems to have gotten about two licenses going to Catskills/Hudson Valley and one each to the other two regions; or whether that 4th license is truly at play statewide.  It's obvious to anyone that the Southern Tier ain't getting two licenses, so I don't understand the point of his presenting that to the bidders as a possibility.  And the only possible scenario by which the Capital District gets two would be one at Howe Caverns, and one in the Albany/Schenectady area; but even that seems extremely unlikely. It's been suggested that the board will only award three licenses and punt on the 4th (thereby creating another round of lobbying and campaign contributions).  If the board is indeed going to diverge from the expectations, I'd think the latter is by far the most likely scenario.

One thing the board had exactly right is its sense of narrative.  By having Genting's Tuxedo proposal go last, it surely saved the "best" for last....if "best" means biggest, anyway.  We started out on Monday with Tradition's proposal for a $155 million project, plus a $35 million licensing fee, creating maybe 1500 jobs and generating $135 million in annual gaming revenue, with 90% of that coming from the local area.  We ended up on Tuesday evening with Genting's ginormous $1 billion Sterling Forest Resort - plus a voluntary overpayment of $380 million on top of the required $70 million licensing fee ("we can write the check tomorrow") - with a globe-spanning customer base, some 4,000 jobs (at an average wage of $75,000 a year....or so we're told; no doubt including the executives) and over $1 billion in annual gaming revenue.  Their hotel would be 1,000 rooms; we had heard of hotels with as few as 100 rooms, such as in East Greenbush.  They're going to pay for a dedicated exit off the NYS Thruway, at a cost of some $30 million.  They're going to revitalize the ski slopes and the gardens; the latter will be "mentioned in the same breath" as spectacular vistas in the Grand Canyon and Yellowstone Park, we're told.  "It will invite guests to dream of the intoxicating moments of life." 
I don’t think it is a shock and awe strategy,” said CFO Christian Goode. [Daily News]
Well, I was pretty shocked and awed at the sheer audacity of it all.  We'd been hearing all this talk about drawing customers that are presently going to other states, and from those states themselves.  Genting is talking about drawing gamblers from China, flying them to Stewart International Airport in private jets, and unleashing them upon the baccarat tables, apparently their preferred method of gambling.  In their minds, they're not competing with Yonkers.  They're competing with Las Vegas; they displayed a slide showing that it takes two hours longer to fly there from Beijing than it does to NYC.  They don't seem to particularly care about the threat of a casino at the Meadowlands, because they plan to increase their percentage of international revenue from 20% to 45% by the time one gets built there (and they ain't talking about Canada).

[Say, hypothetically, 100% of their revenue came from Asian tourists that can afford to fly here, check out some restaurants, shopping, and museums in NYC and then go to play baccarat and shop at Woodbury Commons and ski and check out the Renaissance Fair (but no golf at Sterling Forest, much to the apparent disappointment of board member Dennis Glazer).  Would it change the ethics of all of this if all of the jobs and revenue were generated in that way?  Surely wouldn't be the first time that Asians are funding government here!  Yes, it does seem exploitative....but anymore than depending on poor schnooks gambling away their paychecks?]

So, in one way, it's hard to argue with this gentleman:
“How can you say no to that?” said Chad C. Beynon, a gambling analyst at Macquarie Securities Group. “How can you honestly pick someone else?” [NY Times]
On the other hand, as the gaming committee leaders of the state Assembly and Senate complained after the hearings:
"[Assemblyman] Gary [Pretlow] and I intended Orange County never to get a casino because any of the disadvantaged counties – southern Ulster or Sullivan County – it’s going to hurt their banking efforts," [Senator John] Bonacic said. "Banks make decisions on anticipated revenue." [Politics on the Hudson]
So, it will come down to the governor location board deciding what is the real priority here - helping the counties that Cuomo were quite specific about benefiting in the immediate aftermath of the referendum vote?  Or taking the most money, no matter where it's coming from?

That's the big question....and one of the reasons why, despite what Law said at the end about possibly announcing their decision in mid- to late-October, I don't think it will happen until after the election. I don't believe Cuomo wants his margin of victory to be mitigated by furious voters who didn't (or did) get the casino that they wanted (or didn't).  Unless of course he comes riding into Sullivan County on a white horse days before the election announcing that they'll be no casinos in Orange County.  Looking at the size, scope and revenue projections of not only Genting's Tuxedo proposal, but those by Caesars' in Woodbury and Genting's own alternate proposal in Montgomery (which they made explicitly clear upon questioning is their second option), it would appear the money may be hard to resist.  I'd originally predicted that the casinos for that region would be limited to the Catskills in order to comply with the stated intention of the law.....but it's hard to still believe that considering the money figures that are being floated here.

 - Of the three Catskills bidders, only Empire Resorts (proposing the Montreign project.....which we learned is a combination of Monticello and the "reign of a king") said that they would forge on even if a license is awarded in Orange....although on a significantly smaller scale.  Upon questioning, the Nevele affirmed that they would not proceed even if the Orange casino is the Saratoga harness proposal in Newburgh....which Saratoga contends would not harm a facility in the Catskills (an assertion which was greeted with skepticism by board member Dennis Glazer).  Two of the Catskills bidders used the governor's own words about the importance of revitalizing upstate areas in their presentations.

 - The Nevele, repeating a claim made in their application, said that a casino there "will end unemployment in Ellenville in our lifetime."

 - As there were on Monday, there were subtle tweaks of the competition without mentioning their names (or drawing the wrath the board).  Saratoga harness pointed out that they don't have a conflict of interest in NYC whereby they might encourage their patrons to go from a high-tax racino (Aqueduct) to a lower-tax casino (a Genting facility in Tuxedo or Montgomery).  (Though they might very well want to do that themselves should they win a license, which they surely will, whether in Newburgh or East Greenbush.)  The Penn National/Cordish team, hoping to build in South Blooming Grove, a few miles from the Woodbury Commons mall, completely dismissed Catskills casinos as being too far from NYC.  And, most amusingly, on one of their slides, Mohegan Sun noted the location of the Monster golf course next to their proposed casino at the Concord.  Of course, that golf course is on the Adelaar part of the property.  That didn't however escape the notice of golf-conscious board member Dennis Glazer, who elicited an admission from the Mohegan Sun team that the course is not on their property and therefore not part of their proposal.

 - I find it pretty astonishing that Zephyr Teachout won SO many counties outright - some 30 in all! I think that's been understated in the reporting on the primary.  She got as much as 78% of the vote, in Columbia County, and trounced the sitting governor in the Capital District area.  Here's the electoral map, with Ms. Teachout triumphant in the counties shaded in green.







Whether it has anything to do with the casino process I can't say....but she beat Cuomo in all but two of the counties where a casino is being proposed, one of which (Orange) was a virtual dead heat.  Ironically, since hers was supposed to be a challenge from the left flank of the party, it was in NYC that Cuomo ran strongest, perhaps reflecting a GOTV effort and the support of some unions.  I would think that some of Ms. Teachout's support was "anyone but Cuomo" votes from the right flank of the party as well, in large part (based on how many lawn signs that I saw in my travels in and around Saratoga) based on his SAFE Act....and from across the political spectrum due to the Moreland Commission scandal, and the unprofessional behavior towards his challenger that was widely viewed on video last weekend.