Looming Questions for New York Gambling

August 15, 2012 at 4:00 am

Agave Kiss captures the Cicada grade III at the Aqueduct in Queens. Ever since Gov. Andrew Cuomo took the reigns of the New York Racing Association, the horse racing world has been anxiously awaiting the governor's decision on the sport's future. AP/New York Racing Association

Over the past year, the future course of gaming in New York State has undergone a remarkable series of changes. Now that Gov. Andrew Cuomo is no longer planning to replace the Javits Center in Manhattan with a convention center and full service casino at the Aqueduct Racino in Queens, Assembly Speaker and shot-caller Sheldon Silver is reportedly open to a gaming resort at either Coney Island or Willets Point.

At the same time, horse racing fans and stakeholders are waiting on the governor, who seized control of the scandal-scarred New York Racing Association in May, to make a decision on the sport’s future.

Both of these issues are at the core of the 12th Annual Saratoga Institute on Racing and Gaming Law, taking place Aug. 14-15 at Albany Law School.

Casino Shakeups

Last March, when it was clear that the New York State legislature wasn’t going to make good on its promise to finally reform the redistricting process, Cuomo cut a deal with the legislature: finish drawing new district lines — gerrymandered or not — in exchange for signing off on his plan to legalize table games at seven non-Indian casinos.


On the Capitol Report, Susan Arbetter interviewed lawyers attending the Saratoga Institute, where the legal issues surrounding horse racing and casino siting in New York will be hashed out. Video courtesy of the Capitol Report.

The first problem was that table games already exist in New York at the state’s Indian casinos. The Seneca Nation has an exclusivity agreement with the state on table games west of Rochester, so they felt the deal infringed in their rights.

“We remain skeptical of this initial decision,” Seneca President Robert Odawi Porter told the Buffalo News.

The crown jewel in Gov. Andrew Cuomo’s casino plan was to be the radical transformation of Aqueduct Racino in Queens into a full-service casino and convention center. It would have replaced Javits Center in Manhattan as the city’s major convention center.

But on June 21, the governor announced that the deal with Genting, the Malaysian company that owns Aqueduct, had fallen through.

“The uncertainties and difficulties regarding the constitutional amendment, competitive landscape, tax rate and infrastructure support made any decision difficult,” explained Stefan Friedman, a spokesperson for Genting.

A week later, the New York Times reported that Genting officials had met with the governor before his casino plan was ever announced, suggesting that they may have influenced the plan’s creation. Cuomo strongly denied the implication.

On Monday, the New York Daily News reported that Assembly Speaker Sheldon Silver, long opposed to gaming in the city, says he’s open to a casino — maybe one with a convention center — on Coney Island or in Willets Point. Aqueduct hasn’t totally been ruled out. Anything seems to be a possibility, as long as the casino isn’t in Manhattan, a source close to Silver told the Daily News.

Horse Racing’s Questionable Future

While the siting of the city’s casino waits in political purgatory, another breed of New York gamblers are also waiting anxiously the next play.

The New York Racing Association (NYRA) operates horse betting at Belmont, Aqueduct and Saratoga racetracks. Well, sort of.

Early in 2012, the president and general counsel of the NYRA were fired when regulators revealed that the private agency had underpaid gamblers at all three tracks by $8.5 million over the course of 15 months. Compounding the corruption claims were a slew of recent horse deaths and allegations of doping.

On May 22, Cuomo signed a deal with the NYRA that involved replacing the agency’s board with state appointed members, who would govern its operations for the next three years. Those appointments are expected to happen in September, shortly after this week’s annual conference called the Saratoga Institute, which brings together experts on the legal issues surrounding gaming in New York.

“It will be critically important to see who the governor’s appointees are. Whether they have experience in the industry – there’s been a history of appointees that haven’t had than on-the-ground experience,” Karl J. Sleight, an attorney who leads the Racing and Gaming Industry Team at Harris Beach Law Firm, told Susan Arbetter on a recent episode of the Capitol Report. Sleight is discussing the NYRA’s issues at the Saratoga Institute this week.

Another attorney who is attending the conference, Lisa Marrello, told Arbetter that the governor should prioritize horse racing before tackling casinos.

“As we embark on the 2013 session, and we look to see some of the challenges that the executive and the legislative will encounter on the issue, you need to shore up that racing base before we tackle the casino issue,” said Marrello.

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