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Thursday, June 24, 2010

Gambling on Revenue Raisers

The budget stalemate goes on, headed towards what promises to be a theatrical conclusion on Monday, when, if no deal is reached beforehand, the legislature will vote on what would be (with sincere apologies to Casey Seiler of the Albany Times Union's Capitol Confidential blog), the Mother of All Extenders (MAE). It would contain, in an emergency appropriations bill to keep the government running, any remaining cuts or taxes/fees which are needed to close the $9.2 billion budget. As one might have expected, attention has been turned to raising revenue as opposing to further budget cuts; and though the soda tax was vehemently opposed by both parties, apparently the idea of a increase in the sales tax on clothing is acceptable. Don't ask me.

I'm told by a person with knowledge of the situation that there are three gambling-related revenue-raising proposals currently being considered:

- Make a "free play" promotion at racinos, in which nontaxable betting vouchers are given out in the hope of hooking and reeling customers in for future profit, permanently legal in all of the state's racinos. Apparently, the tactic works quite well; the program has proven successful at Monticello and Tioga Downs during a 12-month pilot program. And, according to a position paper advocating for the change that I've seen, a promotion at Finger Lakes in March resulted in a churn rate of 4.7 times the investment in free bets. Seems rather perverse in a way, doesn't it? Based on an assumption of a 3x churn rate, the measure is expected to raise $103 million.

(That might be a good context in which to present the idea of a lower takeout on certain exotic and multi-race wagers. I know, it's not gonna happen, but I'm just's the same concept.)

- Legalize electronic table games at racinos - $30 million

- Eliminate the restrictions on when, and where, Quick Draw lottery games may be conducted. It was projected in the governor's budget plan that the state could raise some $45 million from people playing Quick Draw wherever [they're] having fun (according to the Lottery site) between the added hours of midnight and 5:30 AM. Sounds like a ball. Overall, the measure is expected to net the state $70 million.

In total, that's $203 million, roughly 2/3rds (conservatively) of what the state could have been getting from a racino at Aqueduct every year.

- I'll leave it to the legal experts to determine what the Supreme Court's decision to restrict the use of "honest services" laws to prosecute white collar crimes means to former Senate Majority Leader Joe Bruno. The Court, which in two fell swoops this year has made life easier for corrupt politicians, ruled that prosecutors could use the law only in cases of bribery and kickback schemes. William Dreyer, Bruno's attorney, told the Daily News' Glenn Blain:

"We’re still evaluating the decision but obviously the decision speaks for itself and tends to limit the honest services statue to bribery and kickbacks…..The allegations against the senator in the indictment concerned conflicts of interest." [Daily Politics]
To me, that's like saying that murder laws are limited to killing and my client is only accused of strangulation. You can call it whatever you want; Bruno made lots of money in questionable arrangements with people with business before the state. While I'd previously had no particular hankering to see an 80-year old man sentenced to a inordinately lengthy prison term, I certainly don't believe he should walk scot free.


steve in nc said...

Ameican justice rules! The head of Enron - how was he supposed to know what not to do under such a vague statute? Poor guy making legal billions entrapped by big government. Defendants deserve every protection (unless they sit silently for two hours under questioning - they don't deserve Miranda rights, do they?).

What kind of sap would expect and demand honest services from a politician or CEO anyway? This is a free market system, everything and everyone is and should be for sale. The profit motive will insure that everything turns out great.

Steve Zorn said...

OK, I'll pretend to be a legal expert (have a law degree anyway). Looks to me overwhelmingly likely that Joe Bruno gets off. Maybe some of what he did qualifies as a "kickback;" I haven't, thankfully, read the trail transcript, but my money's on letting Joe go.

And those of us in racing should always remember that he might have been a crook (that's for the courts to decide), but he was definitely our crook, always available to help out the racing industry. The last Albany politico who did as much for the game as Bruno was probably Averill Harriman in the 1950s (and he was rich enough to not have to bother being a crook).

El Angelo said...

So we should glorify someone for being corrupt if it helps us in the end, the rest of the state be damned? That's unacceptable to me.

Anonymous said...

So, how many others playing the Albany game are as corrupt, or even more corrupt, than Joe Bruno? Joe Bruno was the sole victim of a political score settling by El-yut Spitzer.

Why should Joe take the fall alone for the sins of a totally corrupt political culture? Yes, he has always been a good friend of NY racing and NY racing fans should not forget it.

Certainly Saratoga County racing fans will not forget his contributions to racing and to the Saratoga County economy, one of the most robust in all of NY State. Joe could deliver on his promises and for that he will be remembered. /S/greenmtnpunter

El Angelo said...

GMP, every single politician that's corrupt should be prosecuted the same way Bruno was. But you can't argue that because nobody else was that he's innocent, that doesn't make any sense. I agree that prosecutors should go after them all with the same vigor. The easiest solution for now is to just "vote the bums out" in November.

Speedyman said...

translation: joe bruno took tax money taken from downstaters and gave it to upstaters, who can't generate any real wealth for the state.