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August 17, 2013

Following the money in the casino debate

By Joe Mahoney
The Daily Star

---- — Get ready for a barrage of television and radio ads touting the alleged benefits of opening four Las Vegas-style casinos in New York.

The people and entities coughing up the money to advocate for more gambling in New York will be gaming industry insiders who will personally benefit if New York voters approve a constitutional amendment in November that would allow non-Indian casino gaming.

The people and entities coughing up money to convince voters to reject the proposal will be those with a vested interest in competing casinos in Atlantic City and Connecticut.

In other words, those with a vested interest one side or the other will be lighting up the airwaves while the rest of us would be wise to stock up on DVDs until the question is settled.

With New York already profiting immensely from its aggressive promotion of lottery games, we wondered if the Cuomo administration and the state Gaming Commission have given any thought to whether opening a four-pack of casinos would impact the revenue derived from the current lottery operations, which includes racino action.

Our hunch that Lottery revenues might sag when (and if) new casinos open in the state has been “disproven,” based on the increase in the revenue from the “traditional” lottery games that has occurred since the racinos came online, a Gaming Commission spokeswoman said in response to our queries.

“The existence of Video Lottery Terminals at nine facilities across New York State has had minimal impact on traditional lottery sales in the state,” the spokeswoman, Christy Calicchia, said in an email. “In fact, there has been a 31.9 percent increase in traditional Lottery sales since the nine facilities with VLTs (video lottery terminals) opened.”

It’s an important question because the New York lottery drove just shy of $2.9 billion in aid to education in fiscal 2012.

One of New York’s neighbors, Massachusetts, is wrestling with the same question as it also seeks to find sites for proposed casinos. “There’s no question when casinos are up and running it’s going to have an impact,” Massachusetts state Treasurer Steven Grossman, who is also the chairman of the Bay State’s lottery, told the Boston Herald two weeks ago

We contacted Stephen Schafer of the Coalition Against Gambling in New York, who voiced concern that his group will be drowned out by the expected fusillade of TV ads bought by the casino industry in promoting the casino proposal. Schafer said he was highly skeptical of claims that new casinos would appreciably increase the amount of revenue New York derives from gaming, especially in light of what he says are the costs of promoting an addictive activity whose objective is to separate players from their cash.

Schafer also said he doesn’t buy Gov. Andrew Cuomo’s pitch that he is backing the referendum in order to drive more money to education and stimulate the upstate economy. “I really think there is a very different motivation,” he said, pointing out that is going to be a spending frenzy from the casino industry on ads urging New Yorkers to support the referendum.

We also contacted the head of the New York Gaming Association, veteran lobbyist James Featherstonhaugh, who is also a partner in Saratoga Casino and Raceway, one of New York’s most profitable racinos. The facility also happens to be a potential site for one of the four casinos.

Asked whether he thinks traditional lottery revenue will be impacted by new casinos, Featherstonhaugh said, “I just haven’t thought it through enough.”

He added: “I bet the state officials haven’t thought it through, either.”

We offered no argument to that speculation.

Meanwhile, the amount of casino industry money being poured into the campaign coffers of New York politicians has raised the eyebrows of good government groups. Common Cause has reported that the gaming industry in just the past two years has doled out more than $2 million in contributions in Albany and spent another $14 million on lobbying expenses.

Among the big beneficiaries have been Cuomo, whose campaign raked in $242,000 from gaming interests, while the lobbying group created to produce TV spots promoting the governor and his policies, the Committee to Save New York, scored $2 million last year from gaming interests.

Common Cause revealed that state Sen. John Bonacic, R-Mt. Hope, the chairman of the Senate Racing and Wagering Committee, took in $76,000 from gaming interests, while Assemblyman J. Gary Pretlow, D-Yonkers, the chairman of the gaming committee in the lower house, collected $59,000 from the industry.

At a gaming conference this week, Bonacic, according to the Saratogian newspaper, said he wants a marketing campaign that urges New Yorkers to “Vote No. 1” — No. 1 being the ballot position of the casino referendum in question.

We admit that we’d need a crystal ball in high definition to determine if casinos will grow the upstate economy. But it’s a safe bet that the lobbyists in Albany and their favorite politicians are not going to be hurt by this referendum.

JOE MAHONEY is a staff writer at The Daily Star. Contact him at jmahoney@thedailystar.com.