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Wednesday, July 02, 2014

Fairgame: Fair to Whom?

A coalition of upstate entertainment venues, calling itself Upstate Theaters for a Fairgame, has announced that it has reached agreements with 10 of the 17 casino applicants.  The group is attempting to mitigate any negative effect that the entertainment venues run by deep-pocketed casinos operators will have on their operations.  They include venues such as Saratoga Performing Arts Center (SPAC), Proctors in Schenectady (whose CEO, Philip Morris, is the chairperson of the group), the Times Union Center in Albany, and the Troy Savings Bank Music Hall.  A complete list is available on their website.  The group is asking for the following:

 - Limiting entertainment facilities to no larger than 1,000 seats for the life of the Casino

  -Matching Casino operators and Venues for partnership agreements ranging from sponsorships to booking
  -Guaranteeing there not be exclusivity for talent by date or distance
  -Paying annual fees to the Fairgame Fund to support impacted facilities in the region [reportedly .05% of gaming revenues]
  -Successful agreements will allow us individually to endorse applicants.
Well, the last one sounds more like a threat than a request, but there you go.  According to the Times-Union article, some of the agreements vary from this list of requests.

Now, not everyone thinks this is very fair to anyone other than the members of Fairgame.  David Giacalone, a retired lawyer living in Schenectady who has been active in opposing the proposed casino there, claims that Fairgame is in stark violation of antitrust laws.  He has written to Attorney General Eric Schneiderman to express his concerns:
Fair Game is taking advantage of the Casino Siting process, which includes criteria concerning the formation of partnerships with affected local entertainment venues.  Fair Game is using collective action among the largest theater venues in the State to pressure casino applicants — who are major potential competitors with such entertainment venues — into accepting a stringent, uniform set of restrictions and financial obligations in order to demonstrate Local Support in the Application process.  That pressure is greatly magnified by the very tight and imminent deadlines for all Applicants.

As seen in news articles such as the one that appeared in today’s Schenectady Gazette, Fair Game members not only seek to eliminate competition with casinos for top talent and productions, but also have agreed among themselves to a formula for dividing the revenues received from casinos.
 Giacalone writes a lot more about this on the Stop the Schenectady Casino website here.
By also reaching agreement with seven applicants in the two other Upstate regions that are eligible for casino licenses, the “FairGame” Coalition (Concert Cartel?) may end up achieving joint booking and venue-size limitations, and a revenue-sharing agreement with each of the 3 or 4 winning casinos.  That could mean the equivalent of territorial exclusivity, and joint booking and ticket pricing, for all/each of FairGame members, across all of the eastern portion of Upstate New York, through midState locations such as Utica and Syracuse, and apparently stretching to their members in the Western end of the State.
 No response from the AG office as of yet.

 - Moody's Investor Service has issued a grim outlook on the short-term future of casino gambling.
"The fact regional gaming revenues excluding Nevada remained flat, despite further improvement in the economy and additional regional casinos throughout the U.S., is a strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve," Moody's Senior Vice President Keith Foley said in the report.

U.S. gaming revenues (figured derived from state revenue reports) are estimated to decrease at a rate of 3 to 5 percent over the next 12 to 18 months, according to Moody's. This anticipated slide will cause overall industry earnings to decline by as much as 7.5 percent, the firm estimates. [Albany Times Union]
This is of course a national forecast, not a prediction of how the pending explosion of Northeast casinos (the exact size of which is pending the outcome of November's repeal referendum in Massachusetts) will effect business at those and existing casinos in the area.  You'd think that the national trend does not bode well for all of the new facilities.  But the 17 bidders for New York casinos, throwing around spending promises as they are, don't seem to be very concerned.

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