Let the Hearings Begin

Casino gambling in New York State was the subject on Wednesday of a joint Senate hearing conducted by the Committee on Racing Gaming and Wagering, and the Senate Standing Committee on Judiciary. It was the first of two related hearings to be chaired this week by the Racing and Gaming Committee Chair John Bonacic.

On Friday, Bonacic will conduct a hearing with the stated purpose: To develop potential legislation to enhance the racing industry in New York State. And, with a witness list which includes Steven Crist, Charles Hayward, Rick Violette of NYTHA, and three OTB presidents, Friday's hearing should be one in which the industry gets its say on the matter. However, recall that Bonacic has promised to, among other things, determine whether the three-track franchise can be legally taken away from the New York Racing Association; perhaps, it's been speculated by some, to facilitate a casino at Belmont. And, with respect to said casino gambling, to determine, and I quote, what requirements, if any, should there be to benefit the horse racing industry? So we can expect additional hearings to come.

(It's also worth pointing out at this time that Bonacic, as we discovered a few weeks ago, has been the recipient of generous campaign contributions by one aspiring private casino developer. I might repeat that on multiple occasions as this story plays out over the next few months and beyond. It's particularly significant in this case in which the Senator is presiding over a Committee that will eventually make a recommendation to the Senate body as to whether or whom amongst private developers, Indian tribes, or existing racinos will be granted the right, perhaps in exclusivity, to develop casinos.)

At Wednesday's hearing, the Committee heard from the New York Gaming Association, the new group representing the state's racinos. Its president, James Featherstonhaugh, an owner of the Saratoga harness track, and a veteran and prominent Albany lobbyist, told the Committee that the Aqueduct racino will bring the total racino proceeds to the state up to $1.1 billion a year. In arguing for exclusive casino rights for his members, Featherstonhaugh tried to make things simple: "We're simply asking you let people play different games at the gaming facilities that already exist." [Buffalo News]

Representatives of the Indian tribes, on the other hand, argued that they already have casino exclusivity under a deal made with Governor George Pataki. Indeed, the Seneca Nation has withheld $310 million in state aid since August 2009 because it says that tracks have been violating their exclusivity in western New York, in part when they added electronic table games and started calling themselves casinos. [Politics on the Hudson]

And, never to be outdone, the indefatigable harness horsemen, fresh off their sweeping court victory which has effectively, for now, ended out-of-competition drug testing in the state, weighed in as well. SOANY president Joe Faraldo hailed the VLT program and the resulting gains made by the harness industry. But he said that his members are on "are on pins and needles about how the proposed constitutional amendment will play out." With respect to the possibility of competing full-scale casinos, Faraldo said:

It is, quite frankly, economically illogical to consider trading off tens of thousands of existing racing, agricultural and equine-related jobs in exchange for increased profits for casino owners and a limited number of new positions for blackjack dealers, croupiers and pit bosses.

Faraldo did not let the racinos go unscathed, charitably warning the Senators that they would seek lower tax rates on new games. "How will that impact revenue to the state and to education?" It was an impressive statement indeed, appealing to matters that even NY State Senators can understand, like revenue, jobs, and schools. You can read it in its entirety here.