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Thursday, December 21, 2006

News and Notes - Dec 22

- The Albany Times-Union reports today:

A federal grand jury investigation of Senate Majority Leader Joseph L. Bruno is focusing on hundreds of thousands of dollars funneled by a wealthy businessman into the senator's private consulting company to allegedly influence the powerful Republican lawmaker,
And yes, that businessman is Empire investor Jared Abbruzzese. Yesterday, the paper reported that Abbruzzese owns 15% of Evident Technologies, the company to which Bruno directed $500,000 in grants that almost always are directed to non-profit companies.

We're also starting to read of stirrings amongst state Republicans that they should have a new majority leader on Jan 3, when a vote is scheduled. At this point, that would probably be a good thing for Empire. Their extensive proposals for Saratoga were seen as being aimed at Bruno, and the Senator has expressed a preference for the for-profit racing model that the group espouses. However, as details of the FBI investigation of Bruno emerge and increasingly point to his relationship with Abbruzzese, it seems as if it would be difficult, if not impossible politically for Bruno to throw his support behind his friend's group now. And that's especially so considering that Bruno's own appointees to the Ad Hoc Committee voted for Excelsior. Whatsmore, the high profile nature of the investigation provides political cover for Gov-to-be Spitzer to give approval to Excelsior despite his now-overshadowed plane rides courtesy of that group's Richard Fields. For Empire, a fresh face in lieu of Bruno might be their best shot to remain in the running.

- Got a comment in response to this post regarding Murray Chass' column the other day, and I checked out the writer's blog, The Verifiable Truth. In this carefully researched blog, I read about the extensive casino holdings and ambitions of Marian Ilitch, the wife of Detroit Tigers owner, and Little Caesar's founder Michael Ilitch. Ms. Ilitch is not an owner of the Tigers, but Mr. Ilitch worked to legalize gambling in the state, and obviously benefits financially from his wife's success.

It's hard to see how Bud Selig could permit that arrangment and say no to Swindal and his one itsy bitsy slots-only casino. OK, probably two itsy bitsy slots-only casinos. In any event, I would guess that they will come up with some arrangement that Swindal be involved only in the racing part of Excelsior. Because that's what he's really interested in anyway, not the dumb slots. Right? After all, it says right on their website that they're exclusively dedicated and committed to making thoroughbred racing in New York the best in the world.

- Donald Trump, the biggest name in the Pennsylvania casino sweepstakes, turned out to be one of the biggest losers when his TrumpStreet casino was passed over by the state gaming commission in favor of two casinos to be built on the Delaware River. I think Rosie O'Donnell picked a bad day to mock him. Here's a recap of the winner and losers.

The Pittsburgh Penguins are definitely amongst the latter. The rejection of the application by Isle of Capri means no $290 million for a new arena that would keep the team in the city. Winning bidder PTIG Gaming has agreed to a Plan B in which it would contribute $7.5 million a year for 30 years, but that would mean that the team would have to kick in $8.5 million initially, and another $4 million over the same time period. Penguins fans are now faced with the loss of the team.


Verifiable said...


You're righth about the existence of a double standard or perhaps its just a complete lack of understanding and grasp of the circumstances on Selig's part.

The Ilitches' casino has 2,618 slots and 136 table games. Not only is MotorCity Casino 100% controlled by Ilitch Holdings, Inc. But IHInc has made investments in Indian Casinos that are operational today and then others that are still planning visions.

Nutting wanted to add a small slot casino with just 500 machines to his ski resort and Swindal looks to do something similar.

What Selig should be concerned about is sports betting; MLB's roots on this matter go back to Shoeless Joe Jackson and his fellow Sox and have nothing to do with today's games of chance and the one armed bandits.

Selig's opened the door to "Grey" by allowing the Ilitch concurrent ownership in an expanding gaming empire. Either baseball and gambling don't mix period, or employment, ownership, etc. in gambling activity is ok unless it involves betting on sports.

One has to wonder what due diligence was done by Selif or his agents prior to granting Ilitch approvals and certainly what's been done in the decade since Marian Ilitch disclosed she was investing in gaming operations.

The gaming business now represents half of Mike Ilitch's $1.5 billion net worth according to Forbes. And Mike Ilitch has done nothing to demand a correction from Forbes.

If Swindal and Nutting are getting thumbs down from Selig; perhaps they'll be catalysts to demand Selig be more forthcoming on the Ilitch situation.


Anonymous said...

Why should racing have any leverage with the State Legislature?

I’m not sure where the benefit to the State from racing lies. There certainly isn’t a good deal of pari-mutuel tax revenue that is received by the State; $11.4 million ($8.8 million from NYRA tracks) according to the New York State Racing and Wagering Board’s 2005 Annual Report. An additional $2.9 million if you account for uncashed tickets, which escheat to the State, and admissions taxes. The revenue produced is virtually none if examined in light of the cumulative state budget of $112.3 billion. That means racing directly contributes .0000127 percent. Recall that pari-mutuel wagering on horse races is permitted by the State Constitution solely on the basis of "raising reasonable revenue for the support of government." Yes, racing has residual effect on multipliers through farms and workers, but the impact is negligible. Green space preservation? Significant only if you accept the premise that the areas would otherwise be developed.

Lately the only fiscal noise Albany hears from NYRA, to paraphrase H. Ross Perot, is a giant sucking sound. The State retention from take-out is relatively low; the pari-mutuel tax is almost non-existent; the State is left holding a bunch of mortgages on Aqueduct and unsecured loans to NYRA.

Racing fans should be grateful for people like Senate Majority Leader Joseph L. Bruno because at least he’s willing to throw a bone to the industry. Without him, NYRA would probably have been out of business a decade ago.

All that said ... given the microscopic nature of impact that the racing industry on the State economic system, the Legislature should grant the franchise to whoever’s best for the racing industry because the additional monies are irrelevant ...

Verifiable said...

Hey ... another thing I'm not sure y'all are aware of, Mike & Marian Ilitch and their guy Michael Malik are bankrolling the proposed Shinnecock Indian Nation Tribal Casino - albeit not much more than a pipe dream at present -- in the Town of Southampton; Hampton Bays, Long Island.

In Michigan they've fought pari-mutuels and in 2004 helped bankroll another statewide gaming ballot measure to strictly limit the introduction of new games or expansions of non-casino gaming opportunities

It's even possible that the Ilitches would see slots at NewYork's tracks as a threat to their future earnings potential in The Hamptons and could be working behind the scenes to stop Swindal.

The Shinnecock and Team Ilitch have Mercury Public Affairs(Kieran Mahoney & Michael McKeon) & Brian Meara as lobbyists in NY. Familiar with these guys?

And Alan, thanks for your kind words earlier about The Verifiable Truth. Please don't hesitate to let me know if there's anyting you'd like to see me include.