New York Stamp

New York Casino Expansion Faces Fall Referendum

new-york-stampNew York voters will have a chance to weigh on a November referendum which seek to introduce four major, Las Vegas-style casinos, significantly expanding the gambling opportunities (including poker) for New York and Northeast residents.  The question will be posed following the recent signing of an expansion measure, the Upstate NY Gaming Economic Development Act, by Governor Andrew Cuomo.

The fight over gambling expansion in New York has included several different facets, including the existing gambling opportunities within the state (at tribal casinos and pari-mutuel outlets), increased competition from surrounding states, and even a lingering legal dispute with one of the state’s tribal nations, the Senecas, which had withheld $560 million in slot-machine revenue from the state, protesting in part the video-slots offerings at a couple of the state’s casinos.

That disagreement is being patched up as well as part, which means that if the referendum passes, New York gambling could have a significantly changed look in another couple of years.

The referendum would allow four casinos to be built in New York immediately, with another three possibly phased in as a later date.  To make the deal happen, Cuomo and other state legislators had to declare parts of the state off limits — large parts of western and northern New York, plus a mid-state chunk, will be walled off to create economic protection zone for those tribal interests.  Along with the Senecas, who operate multiple casinos in the Buffalo / Niagara Falls region, the Oneida and Mohegan tribes also have casino interests in the state.

As for where the casinos will be placed if the referendum will be approved, that’s planned for other areas.  Three regions would receive New York’s first Vegas-style casinos: somewhere near state capitol Albany; in the “Southern Tier” of New York, east of Binghamtom; and in the Catskills.  A second casino would be placed in one of the three zones, probably also in the Catskills.

Like the upstate areas, New York City itself would also be a no-casino zone in terms of this expansion, though Long Island (Nassau County) would soon have two video-slot facilities, instead of the one currently being planned.

A Vegas-style expansion is also good news for East Coast poker.  Currently, the largest brick-and-mortar poker facility in the state is probably at the Oneidas’ Turning Stone Casino, site to several regional poker events in recent years.  Downstate, however, and specifically in the New York metro area, poker players are forced to travel either to neighbors Connecticut, New Jersey (Atlantic City) and a few other venues.  Or, of course, they can play in one of NYC’s proliferating underground games, with all that entails.

As for the tribal-revenue dispute, that too is being cleaned up.  Cuomo’s office reached a deal with each of the three major tribes earlier this year to help move the expansion plans forward.  In exchange for creating the economic protection zones, the Senecas — the last of the three to agree with the state — settled their $560 million dispute.

According to a report in the Buffalo News, about $349 million in withheld revenues will be released to the state.  Albany gets to keep about $209 million of that, with the other $140 million going to the communities where the Senecas have their major tribal casinos — Buffalo, Niagara Falls and Salamanca.

There’s also the question of how much hardball was involved… on both sides.  The Buffalo News report suggests that at one point, Cuomo threatened the Senecas with the placement of a competing casino, possibly in downtown Niagara Falls, if the Senecas didn’t sign on to the deal.

If you’ve ever been in Niagara Falls, it’s very Atlantic City-like; touristy stuff near the falls and a large economic dead zone a little bit away.  Another casino wouldn’t exactly damage the local decor, and the city can sorely use the $89 million it’s going to get from the Senecas under the virtual renewal of the state/tribe compact.

While the referendum is likely to be a heated battle, it faces reasonable odds of passing.  After that, it’s a question of which mega-casino corporations get the licenses, with all the giants of the industry, the Harrahs and LVSands and the like, looking to get in.  At that point, look for a couple of major new poker venues in the state, maybe by 2015.


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