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Monday, November 24, 2014

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.

Friday, November 21, 2014

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.

Wednesday, November 19, 2014

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.

Tuesday, November 18, 2014

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.

Thursday, November 13, 2014

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 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.

Wednesday, November 12, 2014

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 ( 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.

Monday, November 10, 2014

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.   

Friday, November 07, 2014

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.

Tuesday, November 04, 2014

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....



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.

Monday, November 03, 2014

BC Classic Cheating

I finally got around to watching the Classic on DVR on Sunday morning without knowing the result. That effectively gave me about 13 hours of additional hope that I'd cash a ticket before sitting down to watch the three horses that I probably liked the least battle it out to the wire.  It was a thrilling three-horse stretch duel that was somewhat reminiscent of the very first Classic.  Except that one had better horses, wasn't preceded by an overwrought performance of a horrible song; and Tom Durkin's race call still brings chills all these years later.

And the '84 Classic didn't feature this kind of controversy either.  Andrew Beyer, in defending the stewards' decision to let the result stand despite Bayern "[causing] interference to the horses directly to his inside" (and those are Trevor Denman's very words in his on-track explanation of the stewards' decision), writes that the stewards were right to avoid marring it with a disqualification.  But the race was equally marred by their lack of action.  This race was going to have an asterisk attached in the minds of many horseplayers and fans the moment that Bayern came out of the gate running sideways.

We hear that "thousands" of horses veer in or out at the break, and that the stewards cannot become involved in all of them.  I'd agree with that.  This didn't seem like a typical case though.  We see horses bobble or veer in and out and take another horse or two with them all the time.  In this case though, Bayern and jockey Martin Garcia came out of the gate running in a straight (diagonal) line towards the rail right from the start despite no apparent misstep or mishap, and no history of having done so in the past.  We're told by Beyer that Garcia "got control of Bayern almost immediately," but I don't see it that way; not at all.  Looks to me like he kept going left even as the mayhem he was causing had to have been apparent.  [Shared Belief must be feeling like Obama nowadays; he got slammed from his right in this case (and later by Toast of New York too); got slammed from his left in the Awesome Again to get carried out wide.]

The stewards noted: "in our determination, it didn't happen in the point of a race where it was reasonable to speculate that they didn't finish in a position where they were reasonably expected to finish, which is the language of the rule."  Fair enough; a rule is a rule.  "We're loathe to speculate," they noted.  Indeed, one cannot possibly guess as to whether Bayern would have been beaten had all the horses had a clear shot. But I think the more relevant question in this case is how the incident affected Bayern rather than how it affected the other horses.  It allowed him to run the race the only way he could have in order to win.  Forget Shared Belief; by taking Moreno out of the early running, he assured himself an uncontested lead.  (Of course, that's assuming that Moreno was up to running his usual race without the traffic problems, which one cannot necessarily do either.)

But again, that's not the rule - the mere fact of interference, about which there can be little doubt in this case - is not grounds for a DQ in and of itself, even in a particularly obvious case such as this. Even though it clearly enhanced Bayern's chances to win.  Perhaps the national racing authority all the myriad racing jurisdictions need to take a look at the rule.  Because for a sport which is SO worried about its image in terms of trust by the betting public, one would think it would surely want to avoid situations in which a horse can wipe out its competition at the start and ultimately be rewarded for doing so.  Even if Garcia's actions were not intentional, what is to prevent him or other jockeys from practicing that kind of race riding at the start going forward now that a clear precedent has been established?  Or, more significantly, why wouldn't the betting public now believe that the start of a race is a free-for-all with no rules to protect the horse it bets from foul play, intentional or otherwise?  (And what's to prevent European punters, already suspicious of the American version of the sport, from believing this was a hometown decision in favor of the local trainer over the overseas shipper?) 

I think that an incident like this in a high profile race has the potential to cause far more distrust on the part of the betting public than some trainer getting a 20-day suspension because one of his or her horses in a barn hundreds of miles away tested 2 nanograms over the allowable limit of an otherwise allowable therapeutic medication.  Those trainers are now reviled as 'cheaters' regardless of the intent or lack thereof.  So, how was this not cheating on the part of jockey Garcia? 

Good thing it wasn't the Derby, and only a Breeders' Cup Classic that nobody watched.