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Tuesday, October 07, 2014

Cuomo Will Have His Say on These Frackin' Casinos

Capital New York reports on the latest example of the Cuomo Administration involving itself in something that's supposed to be an independent and objective process (exposed only after the state acceded grudgingly to a FOIL request). This took place in 2011, at a time when the governor was considering the approval of fracking on a limited basis in the Southern Tier.  The plan was abandoned in favor of Cuomo's current strategy of simply stalling on a decision after this June, 2012 article in the New York Times, said by the report to have been a "trial balloon" for the plan, was received poorly.

The original draft of a federal water study by the US Geological Survey (USGS) that was commissioned by the state contained "politically inconvenient conclusions" for the governor's fracking plan, as well as for other energy projects that are under active consideration today

Email communications over a period of several months between Cuomo administration officials and federal researchers were obtained by Capital, in heavily redacted form, through a Freedom of Information Act request. The messages reveal an active role by Cuomo's Department of Environmental Conservation in shaping the text, and determining the timing of the report's release.
In the early study draft, author Paul Heisig noted that gas “drilling, extraction, transport via pipelines, and underground storage” could inadvertently introduce methane into drinking water supplies.

But the version published after the copy was reviewed and edited by staff members from the state D.E.C. and New York State Energy Research and Development Authority omits the reference to pipelines and underground storage. The later, administration-vetted version also includes a line that wasn't in the earlier draft, saying that methane pollution risks in fracking are mitigated by well designed gas wells: “This risk can be reduced if the casing and cementing of wells is properly designed and constructed.”
Though heavily redacted, the emails show a number of New York officials were involved in the study’s drafting, including Eugene Leff, a Department of Environmental Conservation deputy commissioner. Leff is a longtime Cuomo loyalist who worked for the governor back when he was attorney general, and whose installment at the D.E.C. was a priority for Cuomo after his election in 2010. [Capital New York]
I would also point out that D.E.C. Commissioner Joe Martens, appointed by Cuomo, also has a long history with the family, having served for four years in the Mario Cuomo administration.

The article tells of an instance in which a USGS staff member had to remind state officials that they are "a 'science organization' which is not in the business of advocating particular positions."

If this all sounds familiar, it's because it is.  The Gaming Commission is Cuomo's commission, and they appointed the Location Board, which is staffed by five men who all have ties to the governor, as we've pointed out (ad nauseum) in the past.  (And we'd also mention that the crucial SEQRA process that all the bidders need to complete was established and is overseen by the same D.E.C. led by the same Cuomo loyalists, though we've also noted that they have limited input into the local approval processes.)  Once again, the point is that we expect that Governor Cuomo is surely going to express his opinion as to who should get these casino licenses, and that the members of the location board are going to be listening quite closely.

 - We've heard a lot about how new casinos in New York will attract customers from other states and/or New Yorkers who are currently traveling over state lines to gamble.  That doesn't mean however that casinos in those other states will take this lying down.  Recent reports tell us of two Pennsylvania casinos that are reacting to the prospect of increased competition by expanding themselves (that despite the latest statewide declines there)....and it sounds like they are taking pages out of the New York playbook.  Mohegan Sun at Pocono Downs is planning to add features aimed at attracting more customers from a wider radius.
“It’s our pack up the minivan approach,” Bean said. “We want to make our complex a family destination by giving more people from farther distances more reasons to come here and stay longer.”

Bean....said future plans include an indoor water park, a summer snow skiing park, an indoor sports complex, a retail shopping center and possibly a second hotel. [Times Leader]

Sounds like we could also be headed for an over-saturation of water parks (no pun intended)!  Remember that Jeff Gural specified Pocono Downs as a casino from which a Tioga Downs facility could attract or retain customers.

Similarly, the successful Sands Casino at Bethlehem is planning to add a second hotel, a Bass Pro Shop, a convention center, and a new Italian restaurant run by a celebrity chef who is not named Mario Batali.  Seems the answer to more competition is to get even bigger, growing at a pace apparently well in excess of the number of new casino gamblers. It doesn't take an economist to see where that is all headed.

 - Officials of Seneca and Oneida Counties are going at it over the prospect of a casino in Tyre.  The latter is the home of the Turning Stone casino and the Vernon Downs racino, and Oneida is worried about the prospect of a casino that would be 75 miles away.  Seneca officials are rather incredulous. 
"My friends in Oneida County have apparently been drinking heavy doses of Turning Stone Kool-Aid,” began a statement released by Seneca County Board of Supervisors Chairman Robert Hayssen. 
“Does County Executive Picente understand what competition is all about,” continued the Seneca County official in his scathing rebuke. “This is America, not Cuba. Competition is good for businesses and for the customers. Even competition where one party (Turning Stone) – his party – gets a 10-county monopoly.” [Rome Sentinel]
Indeed, the deal that Governor Cuomo made with the Oneida Indian Nation last year prohibits a casino from being built in Oneida and nine surrounding counties (Vernon Downs is grandfathered in).  Seneca County is not included.  To give you an idea of just how large that area of exclusivity is, it's the brown colored area in this map (from

So, we are surely not crying for the Oneida tribe here.  Besides the fact that they had operated since 1993 without turning over a penny to the state.

For their part, Oneida County is concerned that customers from the Syracuse area who presently frequent Turning Stone may be lured to Tyre, should Wilmorite get a license for their proposed Lago Casino and Resort there.  However, Syracuse is located 34 miles from Turning Stone, and 48 miles from Tyre; so those customers who are distance-sensitive are not going to change their habits.  And besides, Oneida gets a flat, guaranteed $2.5 million a year from Turning Stone under the agreement; any loss in the county's revenue from a downturn in business would come from its 25% share of the state's 25% share of slots revenue, the latter estimated to be around $50 million a year.  So, if Turning Stone is down, say, 20% (which surely seems on the high side to me), the cost to Oneida would be $2.5 million of the approximately $15 million they are receiving now; or a 17% reduction.

That's a bummer.  But hard to feel too bad for them, considering the protection granted to the casino by the state, and the sudden windfall to the county that resulted from Cuomo's politically-motivated deals with the Oneida and other tribes that were conveniently concluded months before the referendum vote, effectively ensuring that they would not oppose it.  So, shut up Oneida County.  (And besides, it says here that Governor Cuomo will see to it that Jeff Gural will be rewarded for the $700,000 he spent in support of the referendum and get his casino at Tioga at the expense of Lago and Traditions.)

 - Here's a couple of interesting little tidbits I've seen in the last few days.  Back to the Sands Casino in Bethlehem, seems they're having a little problem with the Asian customers they're busing in from NYC to play baccarat.
More than 50 buses a day flow in from the Asian communities of New York, giving Sands the busiest table games in Pennsylvania. But Juliano acknowledged the practice of bus riders' selling their free play cards and spending the next five hours loitering in the casino and surrounding south Bethlehem neighborhoods has been a frequent complaint by other casino patrons. To address that, he instituted a policy prohibiting bus riders from entering the casino with large bags, which some have used to carry in everything from bagged lunches to newspapers to laptop computers. [Pocono Record]
How pitifully sad is the idea of people spending their entire day riding back and forth on a bus and hanging out for five hours in order to sell a $45 free play card?

And finally, there's this (h/t to our friends at Save East Greenbush).  The state of Missouri has a novel idea to try and stem their regular annual declines.  (By the way, they charge patrons $2 per every two hours they spend in casinos there.) (Don't give NYRA any ideas.) 
A law passed over the summer might help casinos in Missouri. The new credit law allows casinos to loan money to gamblers. Gamblers can establish $10,000 in credit.

“This money that they would borrow would have to be paid back within 30 days...It keeps that gambler from having to carry large amount of cash with them if they’re inclined to bet large amounts of money.” [KRCU]
No further comment necessary.  Have a great day.


jk said...

>(By the way, they charge patrons $2 per every two hours they spend in casinos there.) (Don't give NYRA any ideas.)

NYRA could have made a fortune from this charging everyone who had to wait hours for the LIRR train on Belmont Day.

Alan Mann said...

jk - LOL, indeed!

Anonymous said...

According to recent publicly available information, it appears that Genting expects to complete their SEQRA for Sterling Forest sometime in November, (which would probably break all records for SEQRA), let alone on a scale like this. At first I started to shy away from the backroom deal hypothesis. But now, after watching that Cuomo interview that you posted, I a leaning back towards my original theory -in June 2013, Genting agrees not to fight the referendum with their endless amounts of money, and in exchange, Cuomo slips in Orange County, and everyone at the table agrees to keep their mouth shut about any possibility of a casino in affluent suburban communities is southern Orange County until after a successful vote.

Oh, and not to mention that I find it to be unthinkable that not one person can come up with an explanation as to why Orange County was included in the first place. Come on! This should not be a mystery! I mean...really...its beyond ridiculous.

Funny, when you look at that map you provided, and you look at Region 2, there is this expansive region, yet casinos may be sited on the very most southern tip. its just sickening...all of it. Cuomo is a real sly fox.

And if you read the RFA, you are left wondering how they are going to objectively NOT choose the casino that will make the most money. Personally, I think a draft leaked out and then the gold rush began! Look at the timing of the announcements.

Newyork Isdoomed said...

"And if you read the RFA, you are left wondering how they are going to objectively NOT choose the casino that will make the most money."

You just pointed out the 800lbs gorilla in the room! Local support and local economic impact are a tiny part of the metrics. In the end, casino selection will be based on (#1) which location will draw the largest crowds (Orange County and Albany Area, i.e., East Greenbush or Rensselaer are no brainers) and (#2) which racino owners were promised a license so they would support Prop. 1. In these respects, Jim Featherstonhaugh is a lock for a license because he has projects in two locations near population centers.

Eric said...


I love reading your blog. It is a great combination: inside information, humor, sarcasm, facts and great analysis from someone who seems to truly understand New York (and NJ and PA) and the mess caused by these governments' love affair with gambling. Does the Pulitzer Prize have a blog category? Because, you'd win this year for sure.



Alan Mann said...

Thanks Eric, I appreciate the kind words. If they did have a Pulitzer for bloggers, I'm sure it would come without the cash!