Cuomo Seeks A Do-Over

When the Gaming Facility Location Board announced their three casino license recommendations a couple of weeks ago, we acknowledged that the process appeared to have been independent of outside influence - particularly that from the office of Governor Andrew M. Cuomo - and admitted that we were wrong to predict and insist that that would not be the case.

But now, instead of interfering with the board's deliberations and decisions behind closed doors while the process was ongoing, the governor is doing so right out in the open, asking it to reconvene and reconsider its refusal to issue a license to the Southern Tier....the "true" Southern Tier, that is. 

"The Binghamton area is tied for the region with the highest unemployment rate in upstate New York, and stands to benefit greatly from new jobs and economic development in the region," the letter states. Cuomo wrote that he wants the siting board to consider issuing a new request for application "to seek a qualified applicant to submit a new bid" for the fourth license in the "true Southern Tier." [Albany Times Union]

  The governor is trying to get a do-over.  You know.  A do-over.  You remember.  When the whiny and entitled kid in the street or playground pick-up game would demand that a play that didn't go his/her way be re-played.  "I wasn't ready!"  "I called time out!"  "The ball hit the wire!"  "A car was coming!"  "Sally farted in my face!"

In this case, the lead crybaby was Jeff Gural...though, to be fair, he was leading a chorus of complaints from not only those in the Southern Tier who felt they were bypassed unfairly and unwisely, but from those who questioned the decision from around the state as well.  And we don't at all disagree with those cries.  The decision to award the Southern Tier region license to a location well north of it - one which is already filled with gambling options; and in a little rural town where opposition to a casino is adamant  - was a baffling one, no doubt.

But the problem is this: Cuomo's letter to the board comes not long after Gural, acting like the entitled crybaby that some consider him to be, ranted and raved like....well....an entitled crybaby. 

  ""Um, I was asked to help get the law passed. I spent about $800,000 of my own money to get Proposition One passed, only to get put out of business. I mean, I, I think it’s a joke to be honest with you."
.......
"And what really pisses me off is the governor asked me to spend $800,000 of my money to pass Local Law 1, Proposition One? What was that all about? I mean—why would—the whole thing is sickening to be honest with you." [Capital New York]

So, for the governor to react shortly thereafter by appealing to the board - which is made up of a co-chairman of his first gubernatorial campaign, another former campaign aide who he later appointed to chair a state agency, two gentlemen who he appointed to their current co-chairmanships of a regional economic development council, and another whose wife, a current Westchester District Attorney, he once appointed to head a prominent ethics committee - to let the crybaby get his way, seems rather inappropriate.  Though hardly atypical or surprising.  Sure, Cuomo's letter couches his intentions in an effort to "excite national competition by interested parties that submit even better applications than the first round." But nobody really believes that any parties other than Gural and Tioga Downs would be interested in a region in which no outside companies were interested even before Atlantic City casinos started going broke, making it increasingly apparent that the northeast is over-saturated with gambling facilities.  Nor that this is anything other than a direct effort to set things right with a person who actively supported one of his key initiatives with his mouth and his money.

The governor, having sat out the casino selection process, contrary to every bone in his body and perhaps due to federal investigations into the Moreland Commission which we have good reason to believe are underway, can no longer help himself.  If the board's recommendations served to quash your belief that there were no stated or implied understandings whatsoever when the NYGA agreed at the last minute to not oppose the casino referendum, these developments should serve to make you think again, as I have.  And, again, none of this is to mean that, strictly on the facts on the ground, Cuomo is wrong to ask the board to reconsider what would indeed appear to be a questionable omission.  It's just that the way it has come about, and considering these persons involved, as well as the history of inside dealing behind closed doors that Albany, and this administration in particular, is notorious for, makes it all seem quite unseemly.  To put it one way.  Though equally quite typical. 

 - The Head Chef and I are currently down in Florida; and, as we are marking a special celebration as the calendar turns to 2015, we will be headed towards climes even further south of here on New Year's Day for an extended vacation.  So, I'm thinking that you likely won't be hearing from me for a bit!  A Happy, Healthy, and Safe New Year to all, and thanks, as always, for your readership and support.

Expected Reactions in an Unexpected Place

The language in the reactions we heard last week regarding the selection of the Lago Resort & Casino in Tyre was the kind that we thought we might be hearing from aggrieved casino supporters in the Catskills had licenses been issued to Orange County applicants instead.

"Something's wrong," Broome County Executive Debbie Preston said. "It's a slap in the face to the people of Broome County and the people of the Southern Tier." [PressConnects]

.......

State Sen. Catharine Young, R-Olean, called the news "a punch in the gut to the Southern Tier." [Syracuse.com]

.......

"To not pick a Southern Tier location — Seneca County, in all due respect, is not in the Southern Tier," [Sen. Tom] Libous said. "I'm extremely upset. I'm very, very disappointed." [PressConnects]

.......

A day after the casino vote last year, Cuomo showed up in Binghamton and applauded the addition of new licenses as he stood in front of a podium with a sign that read: "Funding for Schools ... Jobs for the Southern Tier." [PressConnects Editorial]

Well, no casino jobs for the Southern Tier; at least what those living in that part of the state would consider to be the Southern Tier.  As in....the actual southern tier.  The above-referred-to editorial continues:

As Cuomo said at the time: "We're losing over a billion dollars to the neighboring casinos — New Jersey has casinos, Pennsylvania has casinos, Connecticut has casinos." 

Cuomo was right.

If a Binghamton resident decides to go to a full-service casino, that gambler likely drives 76 miles south in Pennsylvania to the Mohegan Sun casino in Wilkes-Barre. After all, Turning Stone Resort and Casino is 87 miles north. Others in New York are even farther away.

Of course, not everybody up in the Finger Lakes region is thrilled about the decision either....especially those in Tyre who have been trying to block the construction of a casino there.  The CasinoFreeTyre group, unsuccessful thus far with their legal actions, will try again; this time, asserting that the developers' plans grew larger between the time that they were, controversially, approved by the Town Board, and the time that they were formally submitted to the Gaming Commission. That may sound like a technicality.....but recall that a judge ruled in the previous lawsuit that the town was not required to post the SEQRA forms on their website because it didn't have a high speed connection.  So maybe technicality is a language the court will better understand than it did common sense.

And the horsemen at the Finger Lakes warned that a casino in Tyre could put the track out of business.  

 If actions are not taken by state officials to protect purse account levels and avoid a drop in state tax rates paid by the state, Brown said "racing at Finger Lakes will be gone in two to three years." He said 90% of his 500 members could not stay in business if purse levels drop below the $20 million or so mark they've been running in recent years. [Bloodhorse]

Kevin Law, the chairperson of the Location Board, told reporters that the decision was between Lago and nothing....prompting Jeff Gural to call that the stupidest statement I've ever heard anybody make in my whole life. And, in that interview, Gural again demonstrated the sense of entitlement that he had about this process.

"I finished the garage. I spent a quarter of a million dollars on Winterfest, thinking I would get the license. And I got screwed." [PressConnects]

In an absolutely delicious bit of irony, Gural is conducting a joint press conference on Tuesday morning along with Traditions at the Glen, the other unsuccessful applicant in the so-called Southern Tier region.  There - and I am writing this before the press conference whereas you are likely reading this afterwards - he and Traditions are reportedly set to announce a joint effort to win the 4th casino license which was expected to be awarded in the Catskills/Hudson Valley region, but which was withheld by the Board. You may recall that Gural had previously scoffed at the notion of a cooperative effort with his competitor when it had been raised by Traditions CEO Bill Walsh a few months ago.  

"We don't see any kind of partnership down the road at all with Traditions, and I think that our chances of getting the license are pretty excellent," said Gural.
...........
"Truthfully, I think if (Traditions owner Bill Walsh) won the bid, he would go broke," said Gural. "I told him that. I don't think that there are enough customers for both of us." [WBNG]

Well, as Gural most colorfully informed us last week, he's wealthy and is in no danger of going broke himself.  Unexpected developments often bring unexpected bedfellows.  And I guess Gural has changed his mind about there not being enough customers to go around.

Location Board Gets Two out of Three (Not Four) Almost Right

The Gaming Facility Location Board has spoken, and no, their decision did not favor the politically connected bidders as I'd anticipated would be the case.  If there was a backroom deal with members of the New York Gaming Association in the weeks preceding the referendum vote in November, 2013, it was obviously scrapped and left on the editing room floor.  Jeff Gural, the owner of Tioga Downs, and James Featherstonhaugh of Saratoga Raceway and Casino are both left without their coveted casino licenses. Instead of sticking to the script of intervention, influence, and interference which is well worn in Albany, particularly with the sitting governor of New York, the board did their job earnestly and independently, so it seems.  I'm happy to admit that I was wrong, though I will offer no apologies for the nature of my suspicions.

That said, I don't think that the location board got this all right.  And they surely showed zero sense of drama!  They led off with the most anticipated aspect of their decision, revealing right off the bat that there would be only three license recommendations, with none of them awarded to an Orange County bidder.  Which, as you may recall, wasn't really the idea in the first place.  Not sure what the point of that entire Orange County exercise was, other than to cause a lot of angst and a lot of wasted time, effort, and money on the part of those who mounted bids for a facility there (including money that was directed to well-connected lobbyists and to politicians' campaign funds).

It also appeared as if the board didn't succeed in keeping their decision entirely to themselves.  Trading in the stock of Empire Resorts, set now, pending final licensing by the Gaming Commission, to be the operator of the Montreign casino at the old Concord resort in Thompson, NY in Sullivan County, was frenetic in the days leading up to the decision.  The stock (NYNY, and I still don't understand how they got that symbol!), flirting around 6 1/2 on Dec 12, rallied to 8 on Tuesday on heavy volume.  (It soared to 9 after the announcement before selling, and perhaps some buyers' remorse, took hold and drove it down to 7.13 by the end of Wednesday's trading session.)   And I was surprised on Wednesday morning to see that I was now being followed on Twitter by Galesi Group, who teamed with Rush Street Gaming on the winning bid for the Rivers Casino and Resort in Schenectady.  Perhaps that didn't mean anything, and I don't mean to be presumptuous enough to think that anyone there or anywhere really cares about what I write or think; but I wouldn't think that the folks at Galesi would be curious to see what anyone had to say on Twitter if they didn't think they were going to be selected.

The third license, awarded to Wilmorite for their Lago Resort and Casino in Tyre, is where I think this board really went off the track, ethically and logistically.  We'll get to that in a moment.

The recommendation for Montreign is surely no surprise, even to those who weren't trading NYNY stock, given its location in the Catskills, an area which has been practically begging for casino gambling for decades.  It's a lavish proposal with all of those amenities which we're told will attract gamblers to travel to upstate NY from NYC and beyond; an unproven concept which has no precedent here.  Just go their homepage, roll over the letters as instructed to see all of the nonsense intended to dazzle and distract from the facility's true purpose - to get people onto the gaming floor and keep them there as long as possible.

I have some mixed feelings about their selection.  Of all of the regions that were considered, the Catskills is surely the one which warranted a casino given its history as a faded resort area, the enthusiastic support there, and the long effort to bring this to fruition.  So, even as someone who opposes the whole idea of expanding gaming in the state, it's hard to argue with this location.  And it's great news for the horsemen at Monticello, who recently concluded a deal with management which depended on Empire getting the casino.  It guarantees the existence of the racetrack for the next nine years, and grants the horsemen, in lieu of a share of casino revenues, equity in the company (which they may wish they had when the stock was at 9 yesterday).

On the other hand, Mohegan Sun's proposal for a casino on an adjacent slice of the Concord property seemed slightly less cynical and insincere than most of the others in the state; and may have provided more wide-ranging benefits in the region.  The company's CEO, Mitchell Grossinger Etess, has family roots in the area, and may really have cared about revitalizing it instead of just paying lip service to the idea in order to line his own pockets.  His proposal would have included a revival of Grossinger's (which the Etess family used to operate), as well as commercial development in the city of Monticello.  (Etess said afterwards that he is "happy for Sullivan and wish Montreign the best of luck.”)  In its explanation of its decision, the board did not specify any negatives about the Mohegan Sun proposal (as opposed to the Nevele, which it noted had not completed its financing); only that Montreign is "a more comprehensive and well-measured proposal."

Schenectady was also no surprise; indeed, the rumors that it was the leading candidate had been swirling for weeks.  It fits the bill in that it's a city that has struggled financially (though already in the process of a revitalization); and the location, along the riverfront on a long-abandoned industrial site, seems a logical one; it doesn't sit squarely in a residential area like others will or would have.  However, the sentiment was hardly unanimous in favor of the casino; there was opposition to the proposal there.  Didn't cover it much here, and, in fact, when I did, I got yelled at by someone from the group for belittling the notion that the casino would prey on students at Union College (from which I graduated a really long time ago).  Indeed, the school again expressed concerns after the decision.

Personally, while acknowledging the proximity of the campus to where the facility will be and the potential to lure students, I still think that the casino presents more profound problems than preying on students whose parents are spending $60,000 a year to send them there; I'd be more concerned about the community college myself.  The Stop the Schenectady Casino group, seeming resigned to the decision on its website, outlined some of those concerns, particularly those of problem gaming, and the need to "protect the Historic Stockade neighborhood from an increase in traffic that will almost surely reduce the quality of  life in the neighborhood, and threaten the integrity of its historic structures."  (Preserving that neighborhood was the original goal of this group before they pivoted to the casino.)

That brings us to Tyre.  Along with East Greenbush, where Saratoga harness' proposal, led in part in a most arrogant posture by Morgan Hook of the lobbying firm SKDKnickerbocker, was most rightfully denied in the face of the fierce opposition there (though the board would only acknowledge that "the level of public support....was significantly less" than the other proposals), Tyre was where I heard the most from residents terrified at the prospect of a casino destroying the nature of their residential area.  I feel terrible for the people there who will be affected.  Imagine living your life in a quiet area, minding your own business, and some millionaire dude comes along to plop a 24 hour casino right next door.  I wrote extensively about Tyre in this post, and here I'll once again post the Google Maps satellite views - one closer and one wider - of the rural area where this casino would be built.

The red sign post is where the Dawley family lives, and, should this casino indeed be built, their lives and those of their neighbors will surely never be the same.  The residents have mounted court challenges which have thus far been entirely futile.  They've targeted the environmental review process (SEQRA) which, as we detailed here, is designed to be manipulated by the "lead agency" - in this case, the town itself - to fit its agenda.  The Town Board members simply declared that the casino would have no significant environmental impact on community character, and - poof - it became so. One need only to look at the above photos to realize that that assertion is nonsensical and self-serving.  So, we hope that the community will endeavor to carry on their legal challenge.  It seems unconscionable that the location board would allow a casino to be constructed there.

And that's besides the fact that this award to the Southern Tier region is not actually in the southern tier of the state, as we discussed here.  Despite the fact that Governor Cuomo again reiterated yesterday that these casinos will act as a "magnet" to lure New York City residents to Upstate destinations, I can virtually assure you that no one - and I mean nobody - from the city is going to be traveling up to Tyre to gamble, I don't care how many scenic lakes there may be.  (And in fact, I highly doubt they would have traveled to one at Tioga Downs either....and it surely remains to be seen if they do so to the Catskills or Schenectady).  It's been estimated that as much as 80% of the business in Tyre will simply be gamblers relocated from Turning Stone or Vernon Downs or the Finger Lakes; and though that's a self-serving estimate by Turning Stone, it makes far more sense to me than the idea of a family trip from Manhattan.

As you might imagine, Tioga Downs' owner Jeff Gural is not very happy about this.

“I’m totally shocked. I really am. I didn’t think that, first of all, I didn't think that they belonged in the competition, they’re not in the Southern Tier..

“The governor came to Binghamton and announced this and promised the people of the Southern Tier a casino....Um, I was asked to help get the law passed. I spent about $800,000 of my own money to get Proposition One passed, only to get put out of business. I mean, I, I think it’s a joke to be honest with you." [Capital New York]

 Note here that the amount that Gural spent to get the referendum passed has suddenly gone up from $600,000!  And here we see the sense the entitlement that Gural, and surely also Feathers, had about this.  And he went on, and on, and on....

 “It will hurt me at Vernon. But, I don't give a shit about me, I’m wealthy."
....
"It’ll hurt me at Vernon eventually. I wouldn't be surprised if Finger Lakes closes. This is a devastating impact on the racinos in the state that have provided millions of dollars to the state and our thanks is this idiotic decision? It’s a disgrace. No fracking and no casinos? Why don’t you just tell them they should all move someplace else?”
....
“I mean I was concerned, to be honest, that they had a committee of people who knew nothing about the industry, and that’s what you get, you know? I think they’re well-intentioned, but how, they certainly screwed Turning Stone and they put Finger Lakes out of business. They probably put Vernon Down out of business. So basically, they put two casinos out of business and screwed the third one.”
.....
"And what really pisses me off is the governor asked me to spend $800,000 of my money to pass Local Law 1, Proposition One? What was that all about? I mean—why would—the whole thing is sickening to be honest with you."

 The reference to fracking is with respect to Cuomo's announcement that he will ban the practice in the state; curious that he would make that long-anticipated decision on the same day as this one!  Not sure which one he was trying to distract attention from!  (Of course, I'm sure there are some, if not many, in the Southern Tier who believe that yesterday's developments saved them from the ill effects of gambling, air pollution, and contamination of the water supply.)  In making the fracking announcement, Dr. Howard A. Zucker, the acting state health commissioner, noted that his review boiled down to a simple question: Would he want his family to live in a community where fracking was taking place? [NY Times]  That's obviously not the approach that the location board took in deciding to site a casino in the residential town of Tyre.

It's Show (and Tell) Time for Location Board

It's a busy time of year, so sorry again for the sparse posting of late, as the announcement of the Location Board's recommendations in the casino sweepstakes fast approaches.

However, the action will really just be getting started once Kevin Law tells us who the winners and losers are (and it's subject to one's interpretation as to whether the winners are the winners or the losers) some time shortly after 2 PM on Wednesday.  The reactions from the developers and the communities will surely span the full gamut of emotions ranging from euphoria to rage, and either, or both, will likely be heard and felt from winners and losers alike.  Some will appeal directly to Governor Cuomo, questioning how the results comport with the spirit of the casino law. Some of the bitterness could spill into the legal arena.

Then the Gaming Commission will begin their process of assessing each of the recommended candidate's licensability, with the help of the State Police.  As I've pointed out, recent history suggests that the ultimate result could differ from what these gentlemen come up with on Wednesday; I'd rate the chances at around 25% that that turns out to be the case.  That phase will be another chance for the meddling governor to meddle.  This location board is one thing.  Despite the fact that it's comprised entirely of men with past ties to the governor - some more so than others - they seem to be earnest about their task, and we can only hope that the two members, at least, who I'd surmise are certainly on Cuomo's contacts list haven't been getting gubernatorial texts in the middle of the night.  But the Gaming Commission is Cuomo's commission. If, for some reason, he has a strong opinion against any of these development teams, it's hard to believe that this commission will proceed contrary to his wishes.

Regardless of whether or not that's the case, you can be sure that not all of the losing developers are just going to slink away.  One can expect a plentiful helping of mud to be slung towards those winning teams in whom the others may sense some vulnerabilities with respect to their licensability.

And, of course, once everything is worked out, we shall see just how fast they get built, how many good jobs they really create, how much business they bring to (or suck from) surrounding communities, how their results stack up against their projections, how many local customers declare bankruptcy or lose their homes.

But it will all start on Wednesday.  The Public Notification issued by Gaming Commission would qualify, I believe, as being cryptic:

 MEETING AGENDA

1.            Call to Order

2.            Consideration of Meeting Minutes for December 9, 2014

3.            Consideration of Recommendations of Gaming Facility Applicants for Gaming Commission Licensure

4.        Adjourn

So, let the licensure-ing begin!  You'll be able to watch the proceedings live via the Gaming Commission homepage; I'm sure they'll be a direct link right here somewhere come game time if it's still not there now.  And of course, Twitter will be the place to be for those of us who just have to experience the world in real time.  Unfortunately, I expect to be otherwise occupied, and I'm fine with finding out an hour later (though not much more than that!).  But I'm sure that you can get live updates here, amongst many other places.

I guess I should try to squeeze in some picks, which I will endeavor to do at some point on Tuesday.  But seriously, other than my original suspicions towards those who I consider to be politically favored, I have no idea at this point. And I don't think anyone else really does either. "There are a million rumors running around, but nobody knows anything."  So said Thomas Wilmot, hoping to build the Lago Resort and Casino in Tyre (one of the scenarios which would definitely spur a flurry of legal action). We've heard the rumor about Schenectady having an inside track; this above-linked-to article on Syracuse.com refers to the belief that the Catskills will get two licenses after and despite all the angst over Orange County.  That's what everyone assumed would be the case when this started.

I don't know where any such rumors would be coming from though.  I wonder, as I write this as midnight approaches on Monday, whether the location board itself knows definitively what they're going to announce.

 - In the meantime, VLT's are coming to Long Island, likely before any of these casinos are up and running (with the possible exception of Tioga Downs, where Gural says he can have casino table games up in six months). As you may recall, Governor Cuomo inserted a provision that provided for VLT parlors whether the casino referendum passed or not.  Since it did, we get both, oh goodie!  Both Nassau and Suffolk OTB have plans for 1,000 machine facilities; "slots in a box" as the Times article refers to them.  One thing to be said about that: it at least dispenses the hypocrisy about some of the window dressing that we've seen in the casino proposals.  No idyllic gardens or ponds here; just a bunch of machines catering to mindless gambling......to the tune of some $150 million in net profits a year expected at the Nassau facility.

One thing's for sure: whatever Cuomo's motivation was for supporting these smaller VLT parlors - a bone for Senate Majority Leader Dean Skelos, a hedge against the referendum being defeated, or simply a further effort to bleed more out of the gambling stone - one can be sure that he wasn't thinking about the fortunes of the racing industry.  While Yonkers could lose a very small piece of its action (GM Bob Galterio did note during his FIOS interview that they've managed to maintain a number of customers from Long Island even after Resorts World opened), one would think that the Big A racino would surely stand to lose out the most.  And for NYRA, it's a potential double whammy: Any reduction in Resorts World action would negatively effect payments for purses and infrastructure.....while the new slots parlors will be new competition for Long Island OTB dollars that presently go to racing.  [UPDATE: Reader Dan points out that the NYRA horsemen will get a portion of this slots revenue.  Mr. Hegarty reported last year that it's 2.75% to horsemen and .5% to breeders.)

Is Schenectady Casino in the Bag?

Hi.  Hope everyone had a great holiday!

As I'm sure you know by now, the next meeting of the location board, scheduled for December 17, is expected to produce the announcement of its recommendations as to who to license for up to four casinos in the state.  And let's emphasize again that these will be exactly that: recommendations to the Gaming Commission, which will ultimately decide whether or not to issue the licenses accordingly.  It's not an insignificant point, considering that the last two big decision processes of this sort that we've covered here over ten years of being Left at the Gate ended with a twist:  Governor Paterson himself selected AEG to get the Big A racino, but it ended up with Genting; and, an Ad Hoc Committee selected Excelsior Racing to get the racing franchise in 2006, but Governor Spitzer ultimately went back to NYRA (a longer and more complex story to be sure).

In a concerted push for the Hard Rock proposal in Rensselaer, just outside of Albany at the Amtrak station, mayor Dan Dwyer and some 30 other elected officials gathered at the site on Wednesday to announce their support.

What impact the announcements will have on the selection process is unknown, said McDonald, of Cohoes, and a fellow Democrat, state Sen. Neil Breslin of Bethlehem.

With time running out, the group deemed it worth making the public effort within sight of the state Capitol. They brought in for support Democratic Assemblywoman Patricia Fahy of Albany and three retired state lawmakers: Republicans Roy J. McDonald, who represented Saratoga in the state Senate, and Bob Reilly of Colonie, who served in the Assembly, and Democrat Jack McEneny, who was an Albany assemblyman. [Albany Times Union] 

Additionally, Mayor Dwyer announced the completion of the previously-contemplated deal with Albany to pay the city $1.1 million annually from gaming revenue, and commit to job opportunities for residents.  Dwyer had previously insisted on exclusivity, which was thwarted when Albany Mayor Sheehan reached a similar, yet different, agreement with the Capital View project in East Greenbush.

Rensselaer's payments will come for the city's annual $5 million to $5.7 million host community payment, while the payment for East Greenbush would be made by the casino developer. The money from Rensselaer would go to the city's general fund. The East Greenbush developer would pay Capitalize Albany, the city's economic development wing. 

This above-linked-to Times Union piece serves to support those loud whispers we've been hearing that Schenectady has the inside track on this thing, and portrays this as a last ditch effort to persuade the Gaming Commission that Hard Rock is the best option.  Columnist Chris Churchill, writing for the same paper, goes further, writing that the notion that this is in the bag for Schenectady is "widespread amont insiders."

That suggests the deal between Albany and Rensselaer, officially announced Wednesday, could be a Hail Mary by a casino team that's desperate and realizing it's not going to win.

Or maybe, just maybe, the deal is a response to a whispered message from someone in state government that sounded something like this: "Listen, we want to give this to you. But you need to bolster your local support before we can."

As troubling as it would be for the integrity of the gaming commission's process, the second scenario seems as likely as the first. And that would mean Schenectady doesn't have the casino competition wrapped up after all. 

To me, the developers of the proposed Rivers Casino and Resort, on the shores of the Mohawk River in Schenectady, bring precisely the kind of concerns that has the potential, however slight one may believe it to be, to cause the kind of licensing issues that could lead to the type of twist we mentioned above.  Rush Street has received negative publicity over its involvement in the development of casino-type games aimed at kids; and has been the subject of intense criticism by the UNITE Here union over its labor practices. And Och-Ziff Capital Management, who would solely provide the funding, is a subsidiary of a company being investigated by the SEC for investments said to prop up the brutal reign of Zimbabwe president Robert Mugabe.  [Ooops, they are actually the Hard Rock funding arm, sorry for the mixup.]

Churchill also criticizes Och-Ziff Capital for not being willing to make the payments to Albany itself, as Capital View is proposing for East Greenbush, rather than have it taken out of casino revenues that may otherwise flow to the city of Rensselaer.

Och-Ziff isn't even donating to the other newly announced sweetener of the proverbial pot: a pledge of $500,000 to build a dock for the Half Moon, the financially troubled replica ship. That money would come from the city of Rensselaer, along with casino partners Flaum Management and Capital District OTB.

Not Getting the Memo on Cuomo

It seems as if not everyone has gotten the memo that the governor is not involved in the casino selection process.  Last week, it was reported that Republican Senator James Steward had written to Cuomo (copying in the location board) to advocate on behalf of Howe Caverns, referring to the casino law's intent of creating jobs and funding for schools. 

“It is clear that no other site better fulfills these strict criteria, no other will another have a more profound regional impact, than the Howe Caverns Resort and Casino,” Seward wrote in the letter dated Nov. 14. “It is projected to deliver 20 percent more revenue to the Schoharie County budget, create 3,000 construction jobs and nearly 2,000 permanent positions.” [Capital New York]

I've considered Howe Caverns to be an interesting longshot.  Though its revenue projections come in below that of the other three Capital District applicants, it enjoys wide community support in a region that was devastated by Hurricane Irene.  And, as Senator Steward also noted, it is located far enough from Saratoga to not pose much of a threat at all to the racino there.  Remember that the state collects a higher tax rate on the existing VLT parlors than it will on casinos, so it's certainly in the state's interest to try and prevent cannibalization there.

As if that wasn't enough, Governor Cuomo received some additional reading material last week; this from two lawmakers supporting the Hard Rock casino in Rensselaer. 

"We believe that opportunities for employment and tourism will extend to both sides of the river in Albany and Rensselaer Counties," the letter states. " ... Issues such as transportation, job training and employment are critical to our constituency and will be of utmost importance with regard to this project." [Albany Times Union]

  And why exactly was this letter addressed to the uninvolved Governor of New York? 

"At the end of the day ... the members of the (Gaming) Commission are appointed by the Legislature, yes, but also by the governor," [Assemblyman John] McDonald [of Cohoes] said in an interview.

Indeed.  And the Gaming Commission, which ostensibly made the selections to the location board, happened to pick five gentleman who all have varying degrees of ties to Cuomo; two of them, in particular, held key posiitons on Cuomo's 2010 campaign team.  So, you can't blame these legislators for sending their letters the governor's way.

Mentioned in the article about Rensselaer are a "flurry of rumors" regarding the Capital District license, which are apparently pointing towards Schenectady.  I recently read a quote from Rennselaer mayor Dan Dwyer to that effect.  If those rumors turn out to be true (and I can't really imagine where they'd be coming from), the license award would be going to Rush Street Gaming despite a concerted effort by the Unite HERE union to discredit the company on grounds of unfair and mean-spirited labor practices.  And there has also been bad publicity regarding the company's involvement in gaming apps marketed to kids.  (Rush Street is also involved with Saratoga harness in their Newburgh bid.)  Should the location board select this project despite those concerns, you can expect the union to keep the heat on as the Gaming Commission considers the issue of the company's licensability.

We're told that the location board will indeed make their announcement at their next meeting, whenever that might be.  I'll believe that when I see it.  These guys have a lot to consider; that's an understatement to be sure.  One thing that I'll repeat here.....and perhaps there's no need, because, hopefully, the location board members have, at some point, visited all of the proposed casino sites; though if they have, they must have done so quietly.  If they haven't, then I don't see how they can be getting the whole picture.  The trip that the Head Chef and I took up to Ellenville, home of the proposed Nevele casino, a couple of weeks ago really opened my eyes.  It's one thing to read and hear about how the Catskills proponents are concerned about a casino in Orange County.  It's another thing to take the trip up there and pass by, one by one, the signposts for towns with proposed casino sites off Route 17 on the way from NYC and the Catskills region.....and yes, that includes Newburgh, despite what Saratoga harness wants you to believe. 

Similarly, I don't see how one can fully appreciate the concerns of the residents of East Greenbush that live near the proposed site there without seeing the surroundings for oneself, as I did; and I'm sure that goes for places like Tyre and Tuxedo as well.  If the board is having trouble making a decision and/or coming to a consensus, then I'd recommend that they take a couple of days off from their day jobs and do their due diligence, if they haven't already done so.  As they should have.

Casino Selections Hurdle Towards New Year

We're told that the Gaming Facility Location Board is "closing in" on their decision on where, and to whom, to recommend the issuance of up to four casino licenses; but it won't come at Friday's closed door meeting.  "We expect to be able to make a decision at our next meeting,” Kevin Law wrote to Gaming Commission Mark Gearan.  But we don't yet know exactly when that meeting will be....mid-December is the target.  However, once you get to that time of year, the holidays loom and people have the tendency to put things off until the new year.  I would not at all be shocked if that happens here.

The longer this thing goes on, the more it veers off the ambitious timetable that had been set by Governor Cuomo, who had one time actually envisioned casino money starting to flow by the early months of 2015.  And the more it veers off course, the more I start to believe that maybe.....just possibly.....the outcome will not be what I've always believed to be one that was pre-ordained in the days/weeks leading up to the casino referendum vote.  That was when the New York Gaming Association flipped its stance and agreed to not oppose the referendum after flipping its stance to one of opposition.  The thinking here all along has been that then-NYGA president James Featherstonhaugh, along with Jeff Gural and, perhaps, Genting (who has had a complicated history with the governor, but who surely had the money and the means to influence the vote's outcome) would have the inside track via a closed-door deal with the governor.  That may still indeed end up being the case.  But if it does, these guys are sure doing a convincing job of going through the motions!

Tom Noonan was nice enough to drop by last week and point out that with a grand jury looking into allegations that Cuomo interfered with the investigations of the Moreland Commission, the governor and his staff would have to be a clueless and arrogant fool to interfere with a competitive procurement.  Especially considering the scandal over the selection of the Aqueduct racino.  That's surely a very fair point. However, one might have thought that, with US Attorney Preet Bharara squarely focused on the matter, Cuomo would have had to have been a clueless and arrogant fool to tamper with that investigation by orchestrating a coordinated response by Moreland participants willing to say that there was no interference.  Maybe Bharara's furious reaction to that action gave the governor pause about his meddling behavior.  Still, these casinos are his baby, and it's extremely difficult to believe that he's not actively monitoring the deliberations.  And that his preferences have or will not be expressed to a board which includes people with whom he has worked closely in the past.

But in any event, and no matter what Cuomo is or is not doing, the longer this thing drags on, you gotta believe that Gural and Feathers are shitting their pants.  Surely they must have felt, at the very least, entitled to a license when this process started.  But now, it all seems to be up for grabs....seemingly at least. And both of them have some serious issues with their bids.  For Gural, it's the fact that his revenue and employment projections are incremental to what his Tioga Downs racino is producing now; it's the only existing racino bidding to expand into a casino.  That was the point of the ad attacking the Tioga bid that Lago ran, even if it didn't have the facts straight.  You may recall at the oral presentation, Gural was called out on his projection of 1200 jobs, and sheepishly admitted that only 900 of those positions would be new ("we're allowed to present it like that").

As for Feathers, he picked up his stake in Saratoga, a place where there was some staunch opposition to expanding his existing racino, and landed in the middle of a residential area in East Greenbush, where the opposition is stauncher still.  In my opinion, an award to his Capital View casino there would belie any claim that the process is legitimate.  And his Newburgh bid relies on a notion that it would "complement and not compete" with a Catskills casino which, as I pointed out in this post, is a bunch of unadulterated hogwash.  I would hope that the location board members took that same drive that I did up towards the Catskills to visit each of the sites (don't know if they've actually done so, as they certainly should have by now); then they would have seen the arrogant lie behind the Newburgh narrative for themselves.

Don't Expect Much From NYRA "Re-Privatization"

Gary Pretlow, the chairman of the Assembly Racing Committee, feels that NYRA is not "ready to go on their own" as of yet.

The warnings by Pretlow and the hesitation by his Senate committee counterpart to give a green light now to any of NYRA's still-developing plans signal some potential bumps for next year's scheduled end of state oversight of NYRA.

Though NYRA uses the term "re-privatization" to describe the scheduled end next fall of the state's control of its operations, Pretlow made clear he will oppose any effort that might arise to make NYRA a truly private corporation. 

"It remains a franchise under the state of New York and nothing else is really acceptable," Pretlow said. [Bloodhorse]

I think that last point is something that was conveniently overlooked when we heard talk about re-privatization meaning a New York Racing Association that was owned and operated by Churchill Downs or Frank Stronach.  The 2008 franchise agreement runs through 2033 and quite explicitly states that the New NYRA "is the not-for profit racing corporation incorporated pursuant to Section 402 of the Not-For-Profit Corporation Law of the State of New York."  So, it would require a lot of legislative effort, at the very least, to effect a change as drastic as NYRA becoming part of an out-of-state for-profit entity.  It's not going to happen.  I think that for all of the talk and speculation about the "re-privatization" of NYRA, it could be largely a non-event.

In fact, I think this whole state takeover thing just about qualifies as a non-event itself.  The fact is that NYRA was already under state control.  The Franchise Oversight Board was established in the franchise agreement to oversee the operations, and should NYRA not satisfy a list of Performance Standards that were written vaguely enough ("NYRA shall use its best reasonable efforts to maximize attendance..") to give it wide discretion, the FOB can threaten a revocation of the franchise. It was that threat which forced NYRA to reorganize its board to Cuomo's wishes in the first place.  And though we read about how the new board is "dominated by Cuomo appointees," it consists of largely familiar faces.  Nothing really drastic has occurred here.

Of course, that's not to say that things are not different than they might have been had the so-called takeover not transpired.  Surely, the old NYRA board would have gone in a different direction in choosing a new CEO, and he - or she (ha) - would have brought in a different executive team.
And while they would have faced the same issues - pressure to improve the financials separate from VLT money, the general decline in national handle, the future of Aqueduct (punted by this board), safety and medication issues, and a big wad of VLT cash with which to install much needed capital improvements - a different team may very well have taken a different approach.  Perhaps it would have focused on filling the void left by NYC OTB to fill its financial coffers instead of bleeding its customers for extra cash; or declined to be as hostile to the press and as non-transparent as this regime as proven to be.  (And a half hour session with customers at 10 AM on a Sunday morning at Aqueduct doesn't really change the latter.)

However, structurally and functionally as a corporation, I'd guess that things won't be all that much different when the three year period ends as it would have been if the governor hadn't been interested in staging his brief political show in reaction to the 2011-12 spate of breakdowns at Aqueduct and the takeout "scandal" which was portrayed as "robbing" bettors of millions of dollars.  The franchise agreement will remain in place, and NYRA will still be subject to the Franchise Oversight Board and the performance standards set forth.  It will almost be like nothing ever happened.

Number of Casino Awards Going South?

An editorial last week in the Binghamton-based Press & Sun-Bulletin wants to know exactly how Tyre, NY - where Wilmorite is seeking to build their Lago Resort & Casino despite concerted opposition in the town - got involved in the competition for the Southern Tier license in the first place. 

The rub here is that — as stupid and suspicious as it sounds — the state for casino licensing purposes has chosen to define the "Southern Tier" to include Seneca County, taking the Tier all the way north to Lake Ontario.

Why? you might ask. What were they thinking?

All definitions of the Southern Tier of New York state say Tier counties roughly run along the northern border of Pennsylvania. Empire State Development, the state's chief economic development agency, defines the Southern Tier as Broome, Chemung, Chenango, Delaware, Schuyler, Steuben, Tioga and Tompkins counties.

Darned if we know what went on.

Indeed, here's the map of the regions, with what the Gaming Commission deems to be the "Eastern Southern Tier" shaded in pink.

Tioga and Broome are in the southern portion along the PA border, enclosed in blue; while Tyre is not only in Seneca to the north, but towards the northern portion of it, off the NYS Thruway.  Tyre's inclusion for this purpose is, according to the editorial, a "gerrymandered" definition of the region.  And should Wilmorite be granted a license there, it would mean "zero employment and zero economic benefits to our area — the true Southern Tier."  

Gov. Andrew Cuomo visited Binghamton on Nov. 6, 2013 — the day after the casino amendment passed handily, with 57 percent of the vote, and received overwhelming support from Southern Tier counties....The governor spoke behind a podium reading: "Funding for Schools ... Jobs for the Southern Tier."

We're asking the state and, specifically, Cuomo to hold true to that promise.

Hmm, seems as if the governor was quite busy blowing a lot of hot air all around the state on Nov 6, 2013.  That was the same day that the governor visited Sullivan County in a similarly triumphant mode, declaring how the coming casinos would "fundamentally change the economy of the Catskills."  To those in the southern Southern Tier who agree with this editorial page's exhortation that "we need that casino," Tyre is their spoiler equivalent of Orange County.

Except that I'd be a lot more worried if I was a casino proponent in the Catskills than one in Binghamton.  The Tyre casino has serious issues, from the staunch community opposition to the possible cannibalization of the Turning Stone casino, as well as of the Finger Lakes and Vernon Downs racetracks.  The project generated some bad publicity last week when it published an ad which included falsely understated projections for a casino at Tioga Downs (while, as this article points out, raising a legitimate question of exactly how much additional revenue an expanded facility there would generate.)  Besides, as we've discussed, Tyre is a little rural town that is just totally inappropriate for a casino.  I'd be pretty shocked if they get a license there.  (And only a tiny bit less so if it doesn't go to Gural.)

But folks in the Catskills, already apoplectic at the prospect at a casino in Orange County, must be further rattled by the increasing speculation that the location board will recommend only three licenses, with only one going either there or somewhere in Orange County.  

After New York voters approved four upstate casinos last November, four Atlantic City casinos have closed, gambling profits plunged from Connecticut to Mississippi, and new casinos opened or were greenlighted in Maryland, Pennsylvania and Massachusetts....That increasingly unsettled, crowded market has casino developers and gambling opponents alike speculating that state regulators may award three licenses instead of the four authorized in the 2013 referendum. [Times Herald-Record]

Should that be the case (and assuming that each region would get one....which does not necessarily have to be so), I would have to believe that the Catskills/Hudson Valley license would go to an operator in the Catskills (probably the Montreign/Adelaar project at The Concord).  It just has never seemed possible to me that the Catskills would get completely shut out here; I've been thinking in terms of one for Adelaar (the only developer who said they'd still build should a license go to Orange County), and one perhaps in Newburgh.  If the board is getting concerned about competition, the Catskills region is further isolated at least from the present racino at Yonkers and a future one at the Meadowlands than are the Orange County locations further south.  (As well as from Philly, about to add a second casino.)  However, on the other hand, if the board is instead thinking in terms of trying to get the jump on the Meadowlands, then maybe they are indeed thinking about an Orange location.  In that case, they could be tempted by the big prize - Genting's outlandish and outrageous proposal at Tuxedo, complete with its $380 million bribe.  Though, having said that, I don't believe Genting will get a license there.....they're messing with environmental groups and that project therefore carries the threat of being tied up in the courts for years.

So, we await the location board's next meeting on Friday.  I think it's 50/50, at best, that the announcement comes at that time.

Still Waiting...

A bit of wishful thinking?  Or some clever (and prescient) advance planning?

We don't know yet.  And we won't until at least November 21.  That's all we were told after the closed door meeting of the Gaming Facility Location Board that took place in Manhattan on Monday.  And while Gaming Commission spokesperson Lee Park said that the board is "on track to make a decision this month," he added that a final decision is not guaranteed to be announced at that time.

Well, even a November 21 announcement would actually be past the "early fall" target that would make this process truly "on track" with respect to the original plans.  One can surely be cynical and say that the decision was never going to happen before the election, that the board is procrastinating to make it seem that the license awards are not already pre-ordained and 'in the bag;' that they are waiting for advice and/or approval from Larry Schwartz or Regina Calcaterra from the governor's office (if not from the governor himself); or that they are merely now devising a narrative to make the decision seem as if it is really based on the merits rather than on politics and the wishes of Andrew Cuomo.

Given the history of this administration, all of that, and any similar conspiracy-type theories, would be absolutely 1,000% fair to believe.

However, we'd prefer to think that these gentlemen are doing their job in earnest, meticulously weeding through the thousands of pages of documents, taking into full consideration all of the comments received at the hearings and in writing, weighing what the true intent of the casino-enabling law dictates, and simply struggling to come to a fair consensus.  (Before, the cynic quite fairly would believe, they run it by the second floor for approval.)  But whatever the case, we continue to wait.

The Head Chef and I were up in Ellenville, home of the once-thriving and now dormant Nevele resort, this past weekend to visit some friends.  We drove up the Palisades and Route 6 to Route 17, the road which I once traversed many times en route to a Sunday afternoon of racing at Monticello (when it was the only Sunday game around).  Post time was 2:30 PM, and many of the regular NY drivers would be on hand.  But now, it's a ragged road which still promises to become Route 86; and I'd surmise that the traffic which once clogged it on late Sunday afternoons is no longer such a problem. 

On the way up 17, it was perfectly clear exactly what all the angst up in Sullivan and Ulster counties over possible casinos in Orange County is all about.  We passed right by signposts for Woodbury, South Blooming Grove, and Montgomery; all proposed casino sites.  No doubt that there's little reason to see why potential customers would want to continue on to the Nevele or the Concord; and perfectly understandable why the Catskills developers wouldn't want to build in that case (or, in the case of Empire Resorts' Adelaar/Montreign project, significantly scale back).

Jimmy Feathers and Saratoga harness, however, would have you believe that their Hudson Valley Casino in Newburgh wouldn't present the same problem because it's located north of Route 17.   It will "complement, not compete," they say.  But we passed two big signposts for Newburgh as well; one when getting onto Route 17, and one where that road intersects with Route 84.  The latter intersection is, according to Google Maps, 22.6 miles and 24 minutes (without traffic) from Newburgh.  But from there to the Nevele, it's 27 miles/31 minutes.  And to the Concord (and yes, Google Maps, we know that both resorts are "reported closed"), it's 29.2 miles/29 minutes).

So, I know that the argument from the Newburgh developers is that it's a completely different driving route there, and that the location therefore won't detract from the Catskills locations.  Gamblers will already have decided to visit one, or the other.  But I guess it depends on how one is going.  Anyone on Route 17 or 84 who sees the sign for Newburgh and consults with their GPS when they get to that intersection will see that that city is the closer location.  Who's to say they just won't turn off there even if they originally intended to head to the Catskills?  And if you're on the Thruway, maybe deciding where to go, when you get to the turnoff for Route 17 at Harriman, you're more than an hour from either the Nevele or the Concord.....but just 47 minutes from Newburgh.  So, I think it's fair to say that, as with most everything we've heard from this group with respect to their East Greenbush proposal, Feathers and his cronies are simply full of it.  Actually, I'm struggling to make their point make any sense even as I write this.  Because it really doesn't.

 - We were told that downtown Ellenville has seen some economic relief thanks to The Shadowland Theater, right in town.  It presents a full slate of live theater over the spring/summer/early fall months.  The productions this past season were quite well-reviewed and well-attended; Stephanie Zimbalist starred in one; Judd Hirsch has appeared there in the past.  The theater has spawned, I'm informed, the opening of several restaurants in town.  That's the kind of more wholesome economic revival that I'm sure everyone would prefer to see.  Of course, the bad times in the town and the region require more than a few eating spots.  A casino located outside of downtown will surely create jobs for now (while sucking money out of the pockets of local gambling residents); but whether patrons will venture into downtown (beyond walking distance in the winter months at least) is surely an open question....regardless of what a newly-issued, industry-commissioned report may say.  We know that Resorts World hasn't done much for surrounding businesses in Ozone Park other than the pawn shops...and there's not even a hotel there.  The Nevele proposal touts an unspecified number of "great restaurants" on site.

There hasn't been a whole lot of buzz about the Nevele - which may be a good thing for proponents, as most buzz we've heard about other projects involves communities aghast at the thought of a casino in their midst.  Even in Ellenville, there was a billboard on Route 209 at the edge of town, but I didn't notice any lawn signs either for or against. 

The question of whether this panel opts for the Catskills or Orange....or, possibly both (which would presumably preclude the Nevele and Mohegan Sun, both of which have said they won't build with a casino in Orange)....or, quite conceivably, only one in one of the counties.....is probably the most vexing one for them.  It didn't have to be this way.  And when Governor Cuomo made his triumphant appearance in Sullivan County the day after the referendum was approved, there was no reason to think it would be.  This board's job would have been a whole lot easier if it weren't.  Why the governor made the call to include Orange, we don't exactly know. Maybe we'll learn more about his intentions on November 21 or afterwards (the cynics would say).

 - Mohegan Sun, one of the two bidders at the old Concord site, has added a sweetener to its proposal.

We will certainly want to welcome back to the Catskills those who themselves, or through their parents and grandparents, have such fond associations with the Catskills in its heyday, but more critical will be ensuring generations of new visitors.  To that end, and to promote the new concentration of gaming and entertainment amenities at the Concord, we are pledging to dedicate a portion of our gross gaming revenue annually - 0 .5% - to a new marketing and tourism fund to focus on the Catskills and Hudson Valley region as a gaming and entertainment region, and we will encourage others to participate to maximize the program and its impact.

  That actually is a continuation of a theme, as Mohegan Sun's proposal already includes a revival of the Grossinger's resort, and development in downtown Monticello.  They have also begun "moving dirt," and have advanced their projected opening date from June, 2016, to March of that year (barring any unforeseen weather events), "or sooner."  Still, that's a long way from Cuomo's original hope that casino money would start flowing into the state coffers early next year.  That was even more unrealistic than expecting the location board to have made a decision by now.  Of course, should the decision not go Mohegan Sun's way, that dirt will stop moving pretty fast.  I bet they won't even put it back where they found it.

Yonkers to France: Sensationnel!

Quite a successful beginning to the Yonkers-France experiment on Sunday morning.  Five full-field mile and a quarter trotting races attracted European handle, through the French betting conglomerate PMU, of nearly 1.4 million Euros.  That is well above and beyond the projected 1 million Euros, and it translates to around $1.75 million USD.  As we mentioned in this post, the 13 race card on Yonkers Trot/Int'l Preview night did a little over $1.1 million.  So...sensationnel!  Not only that, I'm told that there were some transmission kinks in the first race that kept the handle down on that race, and that $2 million is a possibility for this weekend.  The results had something for everyone - couple of favorites (with nice returns for exacta-wheelers) a medium 9-1 shot, and a bomb.

Domestic handle exceeded expectations too.  Horsemen were concerned about how the card would measure up against the Tuesday night session that the Sunday card replaced; but the nearly half million bucks wagered in the U.S. was, again as I'm informed by an informative source, comparable to a "bad Tuesday night."  (And that's with no triples in the first two races.)

So, let's assume that the cut of the overseas handle that is due to Yonkers made it a pretty good Tuesday night on a Sunday morning/afternoon.  And, again, the big potential here is in commingled betting pools.  That's a whole new world....literally.  Not only would the track and horsemen get their direct share of the total wagering, one would have to expect that more domestic bettors would be attracted by pools with the kind of liquidity that we just don't see in harness racing (or in most thoroughbred racing outside of the major markets, for that matter).  And as far as the early post time here in order to better coincide with prime European time, maybe 11 AM on Sunday isn't such a bad time after all; especially once the football season is over.  Might be a good time for holidays as well; we've spoken in the past how NYRA and other tracks run stakes races late on days such as Memorial Day and the 4th of July, when they might very well be better off starting around 11 and finishing up by 3 or 4 so that people can go home and have their BBQs.

Can't really say enough about this collaborative effort between horsemen and track management.  Here's a situation in which the racing is well-supported by VLT's, yet the parties have joined forces to work towards increasing handle in an innovative and creative way.  I'm not aware of any other similar initiative at a racetracks with slots subsidies.  With the coming of more saturation of the casinos market, and the states' inevitable clawback of slots money earmarked for racing, seems to me that other tracks would be well-advised to take a hard look at what Yonkers is doing.

Another, though different, example of horsemen and track management working together has taken place at Monticello.  You may recall that we wrote earlier this year about the dispute regarding the provision in the casino law which caps VLT slots revenue to purses at 2013 levels which led to the horsemen blocking the simulcast signal.  The horsemen later discontinued their action, and the two sides got down to some good faith bargaining which resulted in an extremely creative solution.  Should Empire Resorts, the track owner, get a casino license for their Adelaar project at the Concord, it will guarantee that racing will continue at Monticello for nine years.  The horsemen will receive one million shares in the company stock (NYNY...how did they manage to get the NYNY ticker symbol?) and a warrant which gives them the option to purchase an additional 300,000 shares under certain conditions related to company projections and share price.  Over the life of the contract, the horsemen are free to sell the shares, with the proceeds going to the purse fund.  Obviously, they will have a strong interest in the share price faring well....though if the shares decline below a certain price, the horsemen are still guaranteed a lump sum payment at the end of the contract term.

So, the horsemen will indeed get more money based on the performance of the casino, though indirectly via the stock price and not based on any direct percentage of casino revenues; and management doesn't have to pay anything out of their pockets unless the casino underperforms (or if other factors contribute to a decline in the share price).  So, no precedent is set as far as paying money out to racing from casino revenues; but a precedent is set in terms of horsemen getting purse money above and beyond the limit set by the casino law.  Monticello horsemen association president Alan Schwartz praised and thanked his members for their sacrifice - as should all NY horsemen of either breed!  

 I want to thank each and every member of the Association for the sacrifices they made during the several long months of pain, when it wasn't clear if we would live to see another day of racing. Because of the courage the Monticello horsemen displayed in overwhelmingly supporting the Board, we have achieved a much better future than Albany provided us. In addition to our legal and accounting team, special thanks go out to Peter Gerry, who volunteered his time, effort and expertise during the delicate and extremely complex negotiations involving the acquisition of the stock and warrants, so as to ensure that a genuine economic benefit was actually realized.....While we were sometimes criticized for the stances we took, the financial reward now finally achieved for our horsemen was our only goal. It would not have been necessary if legislation was more thoughtfully considered in the first instance.

 So, although a far more adversarial situation than at Yonkers, here again is an example of horsemen, track management, and the Gaming Commission (credited by Empire with helping to mediate the dispute) cooperating in coming up with a plan - one of sheer survival for horsemen in this case as opposed to that of further prosperity at Yonkers.

Four More Years

Kicked me like you kicked before
I can't even feel the pain no more.

As much as we'd like to put the lamentable events of last week's Election Day behind us, we'd be remiss if we didn't have a word about our Governor Re-Elect. Andrew Cuomo's victory was decidedly unemphatic.

The Buffalo News said that Cuomo's vote total may be the lowest for the winner of a governor's race in New York since Franklin Roosevelt in 1930. [Democrat & Chronicle]

His 54% share of the ballots cast by the measly turnout was eight points lower than in 2010; nine points below that of his father's re-election total.  Amazingly, Cuomo lost in 46 of the 57 counties outside of New York City; and that to a bland and vastly outspent candidate, on the defensive throughout, with cookie-cutter conservative views that are clearly out of line with the demographics of the state. It's fair to wonder just how close the race could have been with the Republicans had a more polished and credible candidate.

Democrats of the more liberal persuasion, who already felt betrayed by the governor's active facilitation of the arrangement in the Senate that allowed the minority Republicans to cling to power and block passage of measures dear to their hearts, are left battered by that party's ascension to what is now an uncontested majority in the chamber. This governor, who agreed to work enthusiastically for a Democratic majority in exchange for the support of the Working Families Party, did absolutely nothing of the sort. He made exactly one personal appearance on behalf of one candidate, and was less than effusive and expansive with his words. His other "endorsements" came via statements released - over a weekend! - while he was traveling in Puerto Rico; an action so cynically half-hearted that, like Steve Berman said on that Enimem record, "It would be better if you gave me nothing at all."

Now, given Cuomo's poor showing outside of NYC - including, specifically, the counties in which the three upstate candidates he "endorsed" were running - one surely can't say whether more full-throated endorsements would have turned the tide for the Democrats.  However, the governor made passage of all ten planks of the Women's Equality Act as the central theme of his campaign, even creating the Women's Equality Party in the process.  (Some felt that his emphasis on the latter party was attempted payback to the similarly-acronymed Working Families Party for cornering him as they did; but the latter attracted well more than enough votes to keep its ballot line, though it will drop a notch below the Green Party.)  Cuomo surely was well aware that the only hope of passing the Women's Equality Act in its entirety was to have the Democrats control the Senate.  But we never heard him make that exhortation on the campaign trail.  "Let me be clear - you must turn out and vote for [Democratic Senate candidate] if we want to achieve full equality for women!"

We never heard anything like that.  Perhaps - just maybe (or maybe not) - that could have made a difference in SD-46, which elected Democrat Cecilia Tkaczyk in 2012; or in SD-3 in Suffolk County, where Cuomo and Astorino ran neck and neck.  He broke his promise to the WFP, and by not working energetically (if much at all) towards a Democratic Senate, he was, in fact, dooming the law to failure.  To me, that renders his entire campaign - especially those feel-good ads with his girlfriend and daughters - as being insincere and hypocritical.  Instead, he can now continue to talk about "working with Democrats and Republicans," and maintain the kind of centrist approach that is conducive to national politics; that at the expense of progressive causes which will now have to wait.

And, as a result and perhaps worst of all, we'll now have to spend the next two years looking at the empty smiles of Dean Skelos, the poster boy for the term "empty suit."  A man who has not uttered a single substantive sentence during his time as the GOP Senate Leader, Skelos has shown that he will stoop to any measure necessary simply to retain the perks of the majority party, even selling out his party's base in order to appease the governor when he deems it absolutely necessary to maintain his own standing.   

Times Pours (Ice) Cold Water on Catskills' Casino Dreams

Casino supporters in the Catskills may be wondering about the tone and the timing of this article in the New York Times:  Poconos Casino Offers Lesson as New York Weighs Proposals in Catskills.  It's a bleak lesson indeed being taught by the Paper of Record, and it comes now, after all these months of speculation, just days before the Location Board, presumably in the home stretch of this process, is scheduled to go into closed session on Monday to evaluate the various proposals.

Seven years after opening, the Mount Airy Casino Resort has fewer than half of the hotel envisioned by developers, and a third of the slot machines promised in news releases. It has generated about half of the slot revenue forecast by Pennsylvania officials, and little economic spillover has occurred outside the resort. Expansion plans have long since been shelved. The much-heralded charitable foundation has raised a grand total of $1, federal filings show. Those funds have not been distributed.
..........

As New York State officials prepare to announce up to four new casinos, the case of Mount Airy — once advertised as "Your host with the most in the Poconos" — offers a cautionary lesson for residents and elected leaders in another faded postwar vacationland desperate to reinvent itself: the Catskill Mountains. The Catskills were once home to 500 hotels and scores of bungalow colonies, and Gov. Andrew M. Cuomo and legislators have talked up gambling as a path back to prosperity.

.......

In 2006, Pennsylvania projected that the Mount Airy site would generate $269 million per year in revenue from slot machines alone. It has never come close. Slot revenue peaked in 2008 at $176 million and fell last year to $143 million. Table games were added in 2010 and total gambling revenue reached $190 million in 2012 but fell 3 percent to $183 million last year. [NYT]

The article touches on all the areas of skepticism that we've touched upon in the last few months: over saturation, the self-containment of the casino which results in little benefits for surrounding businesses, increases in traffic and accidents, and the "dissonance between resort gambling and traditional family-friendly attractions." But as much as we tend to agree with those observations, and as much as we dislike casinos, this article strikes me as being exceedingly negative and one-sided...and you know that we don't particularly like when the Times does that either.  From reading this article, one would think that the only person in the entire town who is happy is some dude, a.k.a. The Goldfather, who is apparently an unlicensed pawnbroker.

I mean, if the reporter really wanted to, he could have surely, and if nothing else, found at least a few people for whom the casino has provided stable employment and benefits that he/she didn't have before. And, in mentioning the Sands casino in Bethlehem as one of the competing facilities, he could have pointed out that that casino is considered by many to have actually been "successful" in helping to revitalize a depressed area (the poor gamblers on whose backs that has occurred aside).

Having said that however, the point of the article is that the circumstances of the Mount Airy casino are similar to that of the Catskills - a casino with recreational and resort amenities in a once-thriving-with-tourists but now struggling rural setting - as opposed to the Sands casino, which is an urban one. But even here, this article simply does not have its facts straight.

Yet each of the three proposals for Catskill casinos — in or around the borscht belt destinations of Ellenville, Kiamesha Lake and Monticello — is on the scale of what was envisioned for Mount Airy: hundreds of hotel rooms, thousands of slot machines, dozens of blackjack tables. Myriad dining and entertainment options, championship golf courses, zip lines, water parks. Acres of parking for the anticipated hordes of visitors.

I dug up the original 2006 presentation for Mount Airy, (a very large PDF file) and, contrary to the above passage, what was envisioned was actually on a decidedly smaller scale than what we're seeing in the Catskills and elsewhere in New York.

No championship golf courses, zip lines, water parks, big entertainment nor "myriad" dining options here; just a pool, a spa, and a few restaurants. (The coffee shop turned out to be a Starbucks.)  Though it did present a visual depiction that was most definitely more polished than the finished product.

I'm impressed that the artist got the presence of birds in the water right, though they're swans rather than ducks.

So the projects being proposed in the Catskills are actually significantly more ambitious than what was promised at Mount Airy as far as its non-gambling features go. And, though I'm still skeptical that this model will prove to be successful - and therefore, as I said, would basically tend to agree with the glum outlook being presented - this biased and inaccurate article does seem unfair to the folks in the Catskills who are just so desperate for the kind of economic relief that they truly believe these casinos, for which they have been praying for so many years, will provide.   I have to imagine that they must be wondering why the paper didn't instead focus its wrath on projects that developers are trying to force down communities' throats.

Peace, Love and Baccarat

It's 6 PM on Election Day.  Do you know where your casinos are?

Well, no.  And no surprise there.  The members of the location board and Gaming Commission Executive Director Rob Williams talked a lot about a decision in October, but it was apparent to many of us that politics dictated that nothing would happen before this day.  Some things are just really obvious around here. A reporter for TWC News was sitting around on Oct 31 wondering about the decision that was, at one time (to some people), expected during that month, and was replied to dismissively:

Spokesman Lee Park in an e-mail sent Friday noted that neither the Upstate Gaming Economic Development Act, nor the Request for Casino Applications, ever established a deadline for a decision.

We know that, Spokesman Park, dude.  We know that the law doesn't specify a date or month, and we didn't say anything about October.  You did.  

 The board, appointed by the Gaming Commission, is not on a deadline, Park stressed. Although the goal is to make recommendations in about two weeks, that could be pushed until after the elections in November. But the board is “hoping to get it done in October,” Park added. [Daily Gazette]

Less obvious of course is exactly when the announcement will take place and where the casinos will be.  But we have some ideas about the latter, as we've been saying all along, and I guess we should propose a formal prediction at some point very soon!  I think I can handicap this better than I did the Classic.

Sullivan County officials have not given up on the idea of both possible Catskills/Hudson Valley casinos going there, even though they would both  be located at the Concord.  What at one time seemed like a highly improbable scenario has taken on a life of its own - it even has a slogan: 2 at the Concord.  Ok, maybe not a very catchy slogan, but it's something. Here's a radio ad funded by the county Industrial Development Agency.



Everybody remembers Woodstock - can you believe it was 45 years ago? Over 500,000 people came to Bethel in Sullivan County!

Hmm, yeah, I'd say that's a bit of a stretch for this purpose.  And I'd venture a guess that the prospect of three days of amazing music, free love, and good drugs (other than the bad acid, man) would outdraw a casino even in this day and age.

Actually, now that I think of it, I'm surprised that none of the bidders have included that concept in their proposals!   Resorts Worldstock!  Ah, I can just see it now....



GIMME AN S!
S!
GIMME AN L!
L!
GIMME AN O!
0!
GIMME A T!
T!

WHAT'S THAT SPELL?
SLOT!(s)
WHAT'S THAT SPELL?
SLOT!(s)
WHAT'S THAT SPELL?
SLOT!(s)

Yeah, come on all of you rich Asian men,
Uncle Andrew needs help again.
He's got himself on a spending spree
Way up yonder in Albany
Go to Woodbury Commons, get your shopping done.
We're gonna have a whole lotta fun. 

And it's one, two, three,
What are you waiting for?
Don't ask me, you're feeling hot,
So go play some baccarat!
And it's five, A. M.
Open up the entrance gates,
Well there ain't no time for a midnight snooze,
Whoopee! you're all gonna lose!

Well, come on mothers throughout the land,
Get yourself down to Feathers' scam.
Come on fathers, don't hesitate,
Governor Cuomo can hardly wait
For your home to be the first on the block
To be fitted with a padlock.

And it's one, two, three,
What are you waiting for?
Forget the golf and bucolic lake,
Get to the tables with your stake
And it's five, A. M.
Who needs a gourmet meal?
Well, there ain't no time for eats and booze,
Whoopee! you're all gonna lose!


 - Save East Greenbush filed another lawsuit against the Saratoga harness/Churchill Downs proposal; this one is in regard to the October 14 meeting of the zoning board in which the zoning laws were changed to permit this commercial project in the residential area on Thompson Hill.  I skimmed through the lawsuit papers; it's quite a well-researched effort with a lot of citations.  I'd go into it in more detail, but with the decisions presumably just a few days or weeks ahead, I'd like to think that it's all soon going to be moot.  If this location board has the nerve to give Feathers this casino over such vociferous opposition, and considering that the revenue projections do not at all outweigh the other Capitol District contenders to the extent which would make up for that lack of community support, then this process will surely be exposed as a fraud.

Having said that, if you've perhaps forgotten just how controlling and meddling this governor is, this recent article describes yet another instance in which Cuomo virtually dictated the conclusions of an appointed board that was supposed to be independent.  So, I guess we shouldn't be surprised by anything.  Still, just the fact that there are lawsuits pending, with the potential to slow up the works, should give the panel pause as to the project's viability, no matter what the merits of the suit are (and I'm sure they're pretty solid).  At least, that's what a logical person would think.

 - I think this was my favorite performance from the Woodstock album and movie.