On the same day a report came out tying Gov. Andrew Cuomo’s office to a $2 million contribution from the New York Gaming Association, which as a collective owns and operates the state’s nine racinos, Cuomo voiced his displeasure with those who believe casino licenses from a proposed amendment to legalize gambling should go to the state’s racinos alone. Photo by AP.
June 11, 2012When Gov. Andrew Cuomo chose to support an amendment to legalize gambling in New York state in his 2012 State of the State Address, the gaming industry reacted with an onslaught of reason-based pleas from myriad companies, all with competing views as to why they should be entrusted with a coveted gaming license.
Last week, Cuomo took a hard stance against one of those gaming interests and put his political weight behind a process that would see a commission decide who gets the gaming licenses as a way to make the choices less politically motivated, promising to keep the process transparent.
These revelations from the governor came at an unrelated press conference last week where he confirmed months-long speculation that the plans for the nation's largest convention center at Aqueduct and the amendment to make gambling legal in New York state are joined at the hip.
At a press conference regarding a change to marijuana possession laws, Cuomo explained the state is "postponing the conversation" with Malaysian gaming conglomerate Genting to build the convention center until after the casino amendment proposal before the Legislature – and ultimately before the voters in a referendum – has run its course.
The reason being, as Cuomo explained, is the economics of the convention center will change dramatically if casino gaming is legalized and trying to foresee the future "brings us to a place I don't want to go. You can't conclude this conversation until you know what happens with casinos," said the governor.
But all the talk of casinos and the deal that fell through with Genting put the state's gaming industry back under the spotlight.
Reporters were peppering Cuomo with questions of who he thinks should be granted the seven casino gaming licenses afforded by the amendment, in what regions of the state they should go and what kind of tax percentages should be levied on them.
While previously declining to speculate on such issues, Cuomo chose sides this time.
Cuomo made clear the stance held by the state's nine racinos - who as a collective think the competition for full casino gaming licenses should begin and end with them – is not a stance he shares.
"The racinos are arguing that the selection should be limited to the current racinos," said Cuomo. "They say only the places that now have the racinos should be eligible for casinos. I 100 percent oppose that."
Gov. Andrew Cuomo said he would like to see the decision of who gets casino licenses and for what part of the state, if an amendment passes next year, fall on the shoulders of a non-partisan commission, and not himself or the Legislature. Photo by Gazette file.
The governor explained his lack of support for the racinos by saying, "I believe it should be an open competition where we bring in the best companies and we get the best deal for the taxpayers that we can do. I don't believe the racinos have any claim for primacy. I do not want to be in a situation where the assumption is that these tracks have the casinos and then we have to figure out how to get money from them."
Cuomo sent one last parting shot, saying, "The current racino situation in this state is a scandal in my opinion."
The scandal Cuomo refers to is the fact that each racino pays a different tax rate, contributing differing amounts to state education coffers and local budgets.
"I am not going to be a part of a situation that does that again," said Cuomo of the present racino system which he says "defies logic."
"Some of these racinos pay the state very little, some pay more, but why do we start with the premise, besides a political one, that we should be taking care of the racinos? Why not just find the best location, the best operator and make the best deal for the state," said Cuomo. "I want to have a full, open competition."
Calling Cuomo's comments "damaging to the industry," Gary Greenberg, minority shareholder of Vernon Downs and Empire Resorts, said "Cuomo went too far in his pronouncement that the racino situation is a scandal. The comment was not helpful. Headlines calling the racinos a scandal will not help pass a change to the constitution to allow non-Indian casinos."
After airing his personal views on the issue, Cuomo made sure to distance himself, and the Legislature, from the process of choosing which companies and which regions of the state would eventually get a gaming license if the constitutional amendment passes next year.
His comments came the same day as a New York Times article reporting a $2 million contribution by the New York Gaming Association, which runs the state's nine racinos, to the pro-Cuomo lobbying group called the Committee to Save New York.
A follow up article in The Wall Street Journal also documented a 20-minute private pitch from Genting executives (Genting is a member of the Gaming Association) to Cuomo at a Westchester fundraising event, which preceded the contribution.
"What does the Legislature say about the sites? That is the question. I don't want to make the decisions. I don't want the Legislature making the decision. I would give the commission the permission to decide the best plan," said Cuomo. "We set the policy, we set the [location] parameters, but let the commission make the actual decisions. My solution – don't let the politicians do the selection. Just let the commission do it."
When asked if he believes commissions are truly independent. or if they answer to the executive branch which sets them up, Cuomo answered, "Not if you set up a real commission."
James Featherstonhaugh, president of the New York Gaming Association, confirmed the $2 million contribution during an interview with The Legislative Gazette, while trying to dispel the notion that the money bought the association any influence. He also reiterated his support for the state's racinos obtaining the gaming licenses exclusively.
"We continue to really believe that adding table games at existing racetrack casinos is the best answer to the issue of gaming in New York," said Featherstonhaugh. "We respect the fact that there are people who disagree, but we think we have the facts that back us up that ours is the preferred solution. Providing socially responsible, fiscally reliable gaming – we are the people that can do it."
Featherstonhaugh continued, saying "we made those contributions to the Committee to Save New York because we support what the committee has done. They are pro-business and create jobs. The Committee to Save New York made no indication of who they would support in terms of the casino licensing [after we made the donation]."
As for special access to the Governor's Office, Featherstonhaugh said "we've [only] had one formal meeting with Cuomo's people, which was some months ago."
Greenberg called the contribution "ill-advised," saying "I would not have made a $2 million contribution to the Committee to Save New York. The racino operators have to take the constitutional amendment to the voters of New York state. The New York Gaming Association was formed to do that, not any Committee to Save New York."
The Governor's Office publicly denied any wrongdoing and said portraying Cuomo as playing to his donor's interests would be to distort fact.
But Occupy Albany jumped on the news of the $2 million contribution, saying it exemplifies Albany's pay-to-play culture.
"Today, Occupy Albany will be delivering a $2 million check to Gov. Cuomo and the Committee to Save New York. Following the successful example set by the gambling industry, we have decided that bribery has more tangible results than overwhelming public support and peaceful protest," reads Occupy Albany's press release.
It continues, "We fully expect that this money will cause Gov. Cuomo to be a more enthusiastic advocate for a living wage, in the same way that he became a die-hard champion of gambling interests upon being paid to play."
A joint press release from Community Voices Heard, a low-income advocacy group, and VOCAL-NY, an HIV/AIDS advocacy group, also blasted the governor for supporting a constitutional amendment to legalize gaming after receiving the donation.
"We are seeing a governor who seems to have put his editorial byline, his State of the State, and even the state's Constitution up for auction, with the most well-connected New Yorkers brokering the sale and the only available watchdog someone who was appointed by the governor himself," reads the release.
At the same press conference where Cuomo made his views known about racinos not having "primacy" to casino licenses, the governor made two other noteworthy points.
First, he reiterated an earlier protestation about having a casino in the heart of New York City. "I don't believe Manhattan is the appropriate venue for a casino, I believe that's also the speaker's point of view," said Cuomo.
Second, Cuomo brought up, without prodding from reporters, "additional complications" that may be involved in the casino process because of the present New York Racing Association circumstances.
"There are additional complications," said Cuomo. "Where does NYRA fit in to all of this? Because NYRA now gets funding from VLT's (video lottery terminals, or slot machines). The VLT funds [for NYRA] only apply to a racino. When you go to the c-word, casino, VLT funds no longer apply."