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Friday, January 16, 2015

Tyre Casino Opponents Heading Back to Court

As all eyes were on the Gaming Facility Location Board as they voted unanimously to re-entertain the notion of a casino in what is considered to be the "true" Southern Tier region, casino opponents in Tyre are gearing up for another attempt to stop the Lago Casino which was recommended for a license for the region instead.  Despite the fact that Wilmorite has not yet been issued a license by the Gaming Commission (and apparently don't yet own the land), it is already building a retention pond in an area away from the main road.  Casino opponents are keeping an eye on the proceedings with a drone, and I received this photo along with a note declaring that Wilmorite is already "destroying some nice woodland and farmland."












As you may recall, the casino opponents suffered a resounding defeat in court when they first filed their Article 78 proceeding against the process by which the Town Board conducted the required environmental review (SEQRA).  I wrote here about the SEQRA process and some of the objections as to how it was conducted in Tyre; about the lawsuit here; and about the verdict, in vivid detail and with an appropriate amount of dismay, here.

Now, CasinoFreeTyre is back with an appeal to the New York State Court of Appeals, with some new legal help and a motion bolstered with new arguments, a multitude of case citations, and a bit of swagger.  It's a good read as far as these things go, so I've embedded it below for those of you who are interested.  For those of you who aren't, the opening paragraph, reprinted below the document, pretty much sums up the substance and spirit of the document.



At the dawn of the SEQRA era, State and local officials rushed through approval of the Carrier Dome at Syracuse University on the strength of a negative declaration of environmental significance.  This Court rejected such an obvious violation of SEQRA's mandates, and in doing so, created the "hard look" standard now embodied in the SEQRA procedures.  See H.O.M.E.S. v. New York State Urban Dev Corp., 69 A.D.2d 222 (4th Dep't 1979).  Now before this Court is a similarly rushed review, for a project of even greater scale than the Carrier Dome - a half-billion-dollar, 450,000-plus sq. ft. hotel and casino with 3,300 parking spaces, and related infrastructure - on the strength of a review notable for its acknowledgment of multiple significant potential adverse impacts, but absent any consideration of those impacts.  If Wilmorite's Lago Casino can pass muster with solely a negative declaration, then this Court should simply declare H.O.M.E.S. overturned and SEQRA repealed. 
(Of course, the Carrier Dome was ultimately built.)  Briefly, for those of you not inclined to dig back into the past posts linked to above, the Town Board, in Part 2 of the SEQRA forms, identified ten items as likely to result in "significant adverse environmental impacts," but then proceeded to gloss over each and every one in summarily dismissing them as concerns in Part 3.  The plaintiffs assert that the Board "failed to take a hard look at the relevant areas of environmental concern, failed to discuss what, if any, mitigation was contemplated to ensure the impact areas it identified as potentially significant would not be, never reviewed the criteria for determining environmental significance, and did not provide any basis for its determination whatsoever."  Again, further details on their complaints, as well as how this SEQRA process is totally stacked in favor of the "lead agency" conducting it (in this case the Town Board), - which is free to interpret the issues in a way that favors their agenda - in this post.

A few points from the injunction:

 - Particular emphasis is placed on the proximity of the casino site to the Montezuma National Wildlife Refuge, a "critical environmental resource," which is situated "in the middle of one of the busiest bird migration routes on the Atlantic Flyway."  It's home to six bald eagle nests; and includes habitats for several other endangered species, including the pied-billed grebe.













Cute little guy, eh?

 - The attorney for the Town Board openly admitted that the board failed to provide the required elaboration on Part 3.  She provided her own text a full month later, and it was sent to SEQRA-related agencies as an attachment to Part 3, even though it was never adopted by the Town Board; not to mention subject to public comment.  The document cites a past case in which the court declares that "post hoc rationalizations are not permitted."

 - The item of potential environmental impact that I've been most incredulous about is the one regarding community character; the fact that the Town Board could so casually dismiss the notion that a giant casino would profoundly affect the character of a tiny rural town.  The motion cites some past cases in which the court agreed with the plaintiffs in that regard, and notes:
The Casino Project Negative Declaration is as dubious as those annulled in the cases cited above - although those were for smaller projects.  The two-year construction of an approximately $450 million casino complex, with significant parking for vehicles and a more than 287,500 sq. ft. building footprint, holding over 450,000 sq. ft. of total space, on an 85-acre parcel of farmland in a rural, agricultural community, will have an "undeniable impact" on the aesthetics of the area.
  - The plaintiffs conclude that since they have demonstrated a "blatant failure" of the town to comply with SEQRA, they are "likely to succeed on the merits of this appeal;" and they request a preliminary injunction to halt construction that would cause them "irreparable harm."  They hope that the case will be heard no later than early next month.  We obviously wish them well.

 - Meanwhile, Jeff Gural/Tioga Downs is, thus far, the only party participating in the re-opened bidding for a casino in the southern part of the Southern Tier.  Still, Gural is going to have to sweeten his proposal, which was rejected in part because it was small in comparison to Lago; especially considering that he would only be adding on to an existing facility.  Guess that cuts both ways, and the fact that he could be up and running in a matter of months did not outweigh size in the minds of the Location Board members.  So, Gural is really piling on those amenities! 
The new proposal will feature more amenities: a second restaurant, a miniature golf course, batting cages and a climbing wall. [Albany Times-Union]
  Oh yeah, that should really do it! 

Look, the problem with this whole thing is obvious to me, and it has nothing whatsoever to do with a putt-putt course and how many extra tens of thousands Gural is willing to throw in here.  He's a polarizing guy to be sure, and I know a lot of people who will brook no dissent as to him being an evil man.  I don't necessarily agree; I think he's an interesting guy and more complex than the villain he's made out to be.  But here, he's tipped the process into the realm of the unacceptable and absurd.  When he was passed over for a license, Gural stomped his feet and whined quite loudly that he spent $600,000 or $800,000 or whatever the real figure was on supporting the governor's referendum and how dare he be rewarded like this.  So, what does the governor do; the same governor who has publicly pledged that he wouldn't interfere in this process?  And who has decried the influence of money in politics?  He writes to the board, asking them to reconsider, and they dutifully go along.  Now, Gural is awkwardly pandering to the board, and this promises to become a cat and mouse game of how little he can add on and still convince the board to recommend a license for him (if that decision has not already been made for them).

Wow, talk about appearance!  We always lament about how people in this state are able to buy influence and favor behind closed doors, but this is playing out right out in public.  Wah wah Andrew, I spent all this money to support you, so I want my license. Oh OK Jeff, sorry, I'll tell my buddies on the board to give you one, don't worry, sorry that this happened.  I mean, I think that they just can't give this guy a license under these circumstances.  Can you imagine all the foot-stomping we'll have  from the entitled in the future if Gural is ultimately rewarded for this kind of behavior with a casino?  And I'd like to produce the negative campaign ad should Cuomo ever decide to run for some kind of higher office.  Man.

 - Opposition to Nassau OTB's plans to build their slots parlor at the old Fortunoff store in Westbury is gathering momentum.  Here's yet another absolutely incredulous development that just does not reflect well on the governor and the process that he helped create.  You just can't go through months of a process that went out of its way to accommodate public comment (if not, as the Tyre casino opponents and spurned applicants know, to accommodate all of the interested parties), and then allow an entity like OTB to summarily and unilaterally declare and decide that they're going to build a casino - or a slots parlor or whatever you want to call it, it's all really the same - wherever they want.  You just can't.  And remember, this slots parlor was not even subject to the referendum vote - the governor's casino law provided for them even if the referendum went down.  So the residents of Westbury have had absolutely no say in this at any point in the process.  Man.

Monday, January 05, 2015

Odds and Ends, Briefly (Kind Of)

Greetings from the spectacularly beautiful island nation of Grenada!  As I'd mentioned, the Head Chef and I are away on vacation to mark a special occasion, and we still have several more days to go.  Once again, a happy, healthy and safe new year to all.  Just checking in with a few thoughts while I have a wireless connection, but will endeavor to be uncharacteristically succinct so I can get back to doing not much of anything at all.. 

Governor Cuomo lost his dad on the same day that he was inaugurated for his second term.  I wasn't much into state politics when Mario was governor, so, by far, I remember him most for his 1984 convention speech, and his flirtation with a presidential run.  His far less articulate son will never be the keynote speaker at a Democratic convention, and likely will never be anointed as the party's presidential candidate at one.  He has however done a graceful job of balancing his comments in the wake of the Eric Garner grand jury decision, the protests that it spurred, and the tragic and senseless cop killings that neither the protestors nor the mayor had anything to do with.  I could go on a bit here....but I'm on vacation, remember?  Having said that, one can surely understand why police officers would be inflamed by the mayor and police commissioner's deference towards Al Sharpton, who built his career by inflaming racial tensions with spectacular accusations when- and wherever he could get his then-fat face in front of a camera (at a time when that didn't come as easily as it does today).  Our buddy and longtime reader jk posted an article from the Post about the Reverend's involvement with bidders for the Aqueduct casino.

 - The governor's letter to the Location Board asking it to reopen the bidding for a casino in the real Southern Tier has the potential to open up a can of worms.  Ulster County Executive Michael Hein wants the board to re-consider a license for the Nevele. 

On a Tuesday letter to the Gaming Commission and its siting board, Hein, a strong supporter of the Nevele plan, wrote: “It is my strong belief, motivated by legislative intent and fairness, that the new round of applications includes the Catskills/Hudson Valley Region, not just the Eastern Southern Tier/Finger Lakes Region.” [Daily Freeman]
The Nevele was the only unsuccessful bidder in the Catskills/Hudson Valley region that was singled out in the board's final report; it noted that their financing was not complete.  Hein noted that, back in the day, competition in the Catskills "was not a detriment, but rather fostered broad commercial success among a network of resorts."  I imagine that Mohegan Sun and Louis Cappelli, rejected in their bid at the Concord, would share these sentiments as well.

This article, which I found at the Ithaca Journal site, is chock full of information about the tracks that are likely to be negatively affected by the controversial casino in Tyre; the non-Southern Tier selection in the Southern Tier region.  Could go on extensively about it if I wasn't....you know.  It's worth a read if you're interested in the subject.  In summary though: Finger Lakes is screwed.  In another example of something that those who wrote this law and created the gerrymandered Southern Tier region obviously didn't think about:  Finger Lakes, only 27 miles from where Lago is supposed to be built, will not have purses supported by the Lago casino at 2013 levels because it is in Region 6.  But Tioga Downs, which is nearly two hours away, will receive purse support because it's in the same Southern Tier region.  Go figure that one out.  Estimates as to how much business Finger Lakes will lose range from 21% (the study commissioned by Lago) to 50% (the track's estimate).  Guess we can figure the real damage will be somewhere in between.

 - Business is brisk for commercial real estate developers in Schenectady now that casino gambling is coming there. 
Among those looking to benefit are property owners on a stretch of Erie Boulevard west of the casino site that has a hodge-podge of businesses and buildings, some of which are run-down, empty or not fully utilized. [Biz Journals]
All well and good....but these folks are presuming that the casino customers are going to stray outside the gaming floor that the Rivers Casino will be doing their best to keep them at.  So, that's one of the many assumptions about these casinos that we'll just have to wait and see how they turn out.

 - Nassau OTB has settled on the old Fortunoff's building on Old Country Road in Westbury for its VLT parlor.   Those of you from my generation who grew up at the NY harness tracks know that Roosevelt was right there, so the location is more than just a bit ironic.  It's also infuriating to some residents of the area. 
Some local residents told Fox 5 it doesn't belong there and that they fear increased traffic and crime.  The issue has even taken to social media with a Facebook page called Stop the Casino at Fortunoff. It has more than 1,700 likes. [MYFOXNY]
That all sounds quite familiar from the recent casino bidding.  What is quite different though is that these residents didn't have a chance to express their concerns directly to the decision makers like those in the cities and towns targeted for casinos did (for whatever that was worth for those in Tyre).  So, you can't blame those opposed to this gambling facility for being outraged.

 - And finally, I noticed this photo essay in the Times.
Thoroughbred horse racing provides one of the great American spectacles: the magnificently chiseled athletes, the elemental contest of speed and power, the libidinal rush of personal fortunes won or lost by the margins of a split second.  The photographer Theo Zierock, who spent last winter shooting Aqueduct Racetrack in Queens, found none of that. What he found instead was a decaying building populated by lonely old men.
Well, first of all, I have to presume that "last winter" means a year ago.  So, in addition to its appearance at this time being totally random, there have been improvements made to the facility since then; so that it's a bit less of a dump now than it was then.  More importantly, it seems to me that if the photographer Theo Zierock really wanted to take photos of magnificently chiseled athletes, the elemental contest of speed and power, and the libidinal rush of personal fortunes won or lost by the margins of a split second rather than of lonely old men, he surely could have done so.

I myself have not been to the Big A since it opened in the fall; and, believe it or not, I can honestly say from this paradise that I don't miss it at all.  I wouldn't call it a boycott.  I just don't want to go there. 

When I first started writing this blog ten years ago this month, this was one of my favorite times of the year to go to the track in NY.  Forget the dismal inner track racing; I'd get there at 4 PM and spend the rest of the afternoon/early evening betting on races from Gulfstream, Fair Grounds, Oaklawn, Santa Anita, and just about whatever else was offered.  Can't say how many other people were there in the back rooms of the second floor of the clubhouse; but the atmosphere was crackling.  It was hardcore, but in a comfortable, if not elegant, setting.  Over the last decade, with the continued deterioration of the plant - particularly in my second floor hangout, where the only attention paid was the unfortunate decision to install those horrible desk units, which totally changed the ambiance for the worse- combined with the ease of wagering at home, it has become a place where I don’t particularly want to spend the afternoon.  I can't really remember the last time I walked in and wasn't wondering, within an hour, why the hell I was there.

I know, it's been prettied-and-cleaned up.  But a prettied-and-cleaned-up dump is still a dump. And the old haunts on the second floor is the pleasantly functional Longshots bar that they now want even NYRA Rewards members to pay $5 to enter.  I find that I just don’t want to pay that.  It's not that the five bucks is gonna make me broke.  I just don't want to pay it.  Nor do I want to pay for overpriced food and drink.  I'm just not interested in being an ATM for these guys in their pursuit of the mythical "profitable without slots" holy grail. 

As we've noted, this whole notion of being "profitable without slots" is just a number on a piece of paper that means nothing in the real world.  NYRA is dependent on slots revenue to support the purses that they use to compete with other slots states, and to promote their "big days," scheduled to be even bigger this year (oh joy).  The slots revenue earmarked for capital projects allows NYRA to modernize their facilities in ways that facilitate increased revenue, mutuel and otherwise.  And it no doubt helps to lessen the occurrence of maintenance and repair problems/emergencies that they'd have to pay for out of their operating expenses.  So the idea that a number on an income statement means that NYRA could truly be profitable without slots is a fictional one.  However, it is a number that will earn Chris Kay more bonuses and be highlighted on his resume when he moves on to his next gig.  I do think that Kay is earnest about wanting horse racing to prosper in New York.  But we also know that this is merely a step in his corporate career, and success, even if defined on his own terms, would be quite the feather in the cap.

None of the above is to belittle the pursuit of a NYRA that is able to prosper without the miserable machines next door, even though the political pressure to do so seems to have eased, at least for now. The last regime wanted to move in that direction organically, by replacing the void left by NYC OTB. This regime is doing so by trying to bleed the money from its customers.  Speak to you again soon.

Wednesday, December 31, 2014

Cuomo Seeks A Do-Over

When the Gaming Facility Location Board announced their three casino license recommendations a couple of weeks ago, we acknowledged that the process appeared to have been independent of outside influence - particularly that from the office of Governor Andrew M. Cuomo - and admitted that we were wrong to predict and insist that that would not be the case.

But now, instead of interfering with the board's deliberations and decisions behind closed doors while the process was ongoing, the governor is doing so right out in the open, asking it to reconvene and reconsider its refusal to issue a license to the Southern Tier....the "true" Southern Tier, that is. 

"The Binghamton area is tied for the region with the highest unemployment rate in upstate New York, and stands to benefit greatly from new jobs and economic development in the region," the letter states. Cuomo wrote that he wants the siting board to consider issuing a new request for application "to seek a qualified applicant to submit a new bid" for the fourth license in the "true Southern Tier." [Albany Times Union]
  The governor is trying to get a do-over.  You know.  A do-over.  You remember.  When the whiny and entitled kid in the street or playground pick-up game would demand that a play that didn't go his/her way be re-played.  "I wasn't ready!"  "I called time out!"  "The ball hit the wire!"  "A car was coming!"  "Sally farted in my face!"

In this case, the lead crybaby was Jeff Gural...though, to be fair, he was leading a chorus of complaints from not only those in the Southern Tier who felt they were bypassed unfairly and unwisely, but from those who questioned the decision from around the state as well.  And we don't at all disagree with those cries.  The decision to award the Southern Tier region license to a location well north of it - one which is already filled with gambling options; and in a little rural town where opposition to a casino is adamant  - was a baffling one, no doubt.

But the problem is this: Cuomo's letter to the board comes not long after Gural, acting like the entitled crybaby that some consider him to be, ranted and raved like....well....an entitled crybaby. 
  ""Um, I was asked to help get the law passed. I spent about $800,000 of my own money to get Proposition One passed, only to get put out of business. I mean, I, I think it’s a joke to be honest with you."
.......
"And what really pisses me off is the governor asked me to spend $800,000 of my money to pass Local Law 1, Proposition One? What was that all about? I mean—why would—the whole thing is sickening to be honest with you." [Capital New York]
So, for the governor to react shortly thereafter by appealing to the board - which is made up of a co-chairman of his first gubernatorial campaign, another former campaign aide who he later appointed to chair a state agency, two gentlemen who he appointed to their current co-chairmanships of a regional economic development council, and another whose wife, a current Westchester District Attorney, he once appointed to head a prominent ethics committee - to let the crybaby get his way, seems rather inappropriate.  Though hardly atypical or surprising.  Sure, Cuomo's letter couches his intentions in an effort to "excite national competition by interested parties that submit even better applications than the first round." But nobody really believes that any parties other than Gural and Tioga Downs would be interested in a region in which no outside companies were interested even before Atlantic City casinos started going broke, making it increasingly apparent that the northeast is over-saturated with gambling facilities.  Nor that this is anything other than a direct effort to set things right with a person who actively supported one of his key initiatives with his mouth and his money.

The governor, having sat out the casino selection process, contrary to every bone in his body and perhaps due to federal investigations into the Moreland Commission which we have good reason to believe are underway, can no longer help himself.  If the board's recommendations served to quash your belief that there were no stated or implied understandings whatsoever when the NYGA agreed at the last minute to not oppose the casino referendum, these developments should serve to make you think again, as I have.  And, again, none of this is to mean that, strictly on the facts on the ground, Cuomo is wrong to ask the board to reconsider what would indeed appear to be a questionable omission.  It's just that the way it has come about, and considering these persons involved, as well as the history of inside dealing behind closed doors that Albany, and this administration in particular, is notorious for, makes it all seem quite unseemly.  To put it one way.  Though equally quite typical. 

 - The Head Chef and I are currently down in Florida; and, as we are marking a special celebration as the calendar turns to 2015, we will be headed towards climes even further south of here on New Year's Day for an extended vacation.  So, I'm thinking that you likely won't be hearing from me for a bit!  A Happy, Healthy, and Safe New Year to all, and thanks, as always, for your readership and support.

Tuesday, December 23, 2014

Expected Reactions in an Unexpected Place

The language in the reactions we heard last week regarding the selection of the Lago Resort & Casino in Tyre was the kind that we thought we might be hearing from aggrieved casino supporters in the Catskills had licenses been issued to Orange County applicants instead.

"Something's wrong," Broome County Executive Debbie Preston said. "It's a slap in the face to the people of Broome County and the people of the Southern Tier." [PressConnects]
.......
State Sen. Catharine Young, R-Olean, called the news "a punch in the gut to the Southern Tier." [Syracuse.com]
.......
"To not pick a Southern Tier location — Seneca County, in all due respect, is not in the Southern Tier," [Sen. Tom] Libous said. "I'm extremely upset. I'm very, very disappointed." [PressConnects]
.......
A day after the casino vote last year, Cuomo showed up in Binghamton and applauded the addition of new licenses as he stood in front of a podium with a sign that read: "Funding for Schools ... Jobs for the Southern Tier." [PressConnects Editorial]
Well, no casino jobs for the Southern Tier; at least what those living in that part of the state would consider to be the Southern Tier.  As in....the actual southern tier.  The above-referred-to editorial continues:
As Cuomo said at the time: "We're losing over a billion dollars to the neighboring casinos — New Jersey has casinos, Pennsylvania has casinos, Connecticut has casinos." 
Cuomo was right.

If a Binghamton resident decides to go to a full-service casino, that gambler likely drives 76 miles south in Pennsylvania to the Mohegan Sun casino in Wilkes-Barre. After all, Turning Stone Resort and Casino is 87 miles north. Others in New York are even farther away.
Of course, not everybody up in the Finger Lakes region is thrilled about the decision either....especially those in Tyre who have been trying to block the construction of a casino there.  The CasinoFreeTyre group, unsuccessful thus far with their legal actions, will try again; this time, asserting that the developers' plans grew larger between the time that they were, controversially, approved by the Town Board, and the time that they were formally submitted to the Gaming Commission. That may sound like a technicality.....but recall that a judge ruled in the previous lawsuit that the town was not required to post the SEQRA forms on their website because it didn't have a high speed connection.  So maybe technicality is a language the court will better understand than it did common sense.

And the horsemen at the Finger Lakes warned that a casino in Tyre could put the track out of business.  
 If actions are not taken by state officials to protect purse account levels and avoid a drop in state tax rates paid by the state, Brown said "racing at Finger Lakes will be gone in two to three years." He said 90% of his 500 members could not stay in business if purse levels drop below the $20 million or so mark they've been running in recent years. [Bloodhorse]
Kevin Law, the chairperson of the Location Board, told reporters that the decision was between Lago and nothing....prompting Jeff Gural to call that the stupidest statement I've ever heard anybody make in my whole life. And, in that interview, Gural again demonstrated the sense of entitlement that he had about this process.
"I finished the garage. I spent a quarter of a million dollars on Winterfest, thinking I would get the license. And I got screwed." [PressConnects]
In an absolutely delicious bit of irony, Gural is conducting a joint press conference on Tuesday morning along with Traditions at the Glen, the other unsuccessful applicant in the so-called Southern Tier region.  There - and I am writing this before the press conference whereas you are likely reading this afterwards - he and Traditions are reportedly set to announce a joint effort to win the 4th casino license which was expected to be awarded in the Catskills/Hudson Valley region, but which was withheld by the Board. You may recall that Gural had previously scoffed at the notion of a cooperative effort with his competitor when it had been raised by Traditions CEO Bill Walsh a few months ago.  
"We don't see any kind of partnership down the road at all with Traditions, and I think that our chances of getting the license are pretty excellent," said Gural.
...........
"Truthfully, I think if (Traditions owner Bill Walsh) won the bid, he would go broke," said Gural. "I told him that. I don't think that there are enough customers for both of us." [WBNG]
Well, as Gural most colorfully informed us last week, he's wealthy and is in no danger of going broke himself.  Unexpected developments often bring unexpected bedfellows.  And I guess Gural has changed his mind about there not being enough customers to go around.

Thursday, December 18, 2014

Location Board Gets Two out of Three (Not Four) Almost Right

The Gaming Facility Location Board has spoken, and no, their decision did not favor the politically connected bidders as I'd anticipated would be the case.  If there was a backroom deal with members of the New York Gaming Association in the weeks preceding the referendum vote in November, 2013, it was obviously scrapped and left on the editing room floor.  Jeff Gural, the owner of Tioga Downs, and James Featherstonhaugh of Saratoga Raceway and Casino are both left without their coveted casino licenses. Instead of sticking to the script of intervention, influence, and interference which is well worn in Albany, particularly with the sitting governor of New York, the board did their job earnestly and independently, so it seems.  I'm happy to admit that I was wrong, though I will offer no apologies for the nature of my suspicions.

That said, I don't think that the location board got this all right.  And they surely showed zero sense of drama!  They led off with the most anticipated aspect of their decision, revealing right off the bat that there would be only three license recommendations, with none of them awarded to an Orange County bidder.  Which, as you may recall, wasn't really the idea in the first place.  Not sure what the point of that entire Orange County exercise was, other than to cause a lot of angst and a lot of wasted time, effort, and money on the part of those who mounted bids for a facility there (including money that was directed to well-connected lobbyists and to politicians' campaign funds).

It also appeared as if the board didn't succeed in keeping their decision entirely to themselves.  Trading in the stock of Empire Resorts, set now, pending final licensing by the Gaming Commission, to be the operator of the Montreign casino at the old Concord resort in Thompson, NY in Sullivan County, was frenetic in the days leading up to the decision.  The stock (NYNY, and I still don't understand how they got that symbol!), flirting around 6 1/2 on Dec 12, rallied to 8 on Tuesday on heavy volume.  (It soared to 9 after the announcement before selling, and perhaps some buyers' remorse, took hold and drove it down to 7.13 by the end of Wednesday's trading session.)   And I was surprised on Wednesday morning to see that I was now being followed on Twitter by Galesi Group, who teamed with Rush Street Gaming on the winning bid for the Rivers Casino and Resort in Schenectady.  Perhaps that didn't mean anything, and I don't mean to be presumptuous enough to think that anyone there or anywhere really cares about what I write or think; but I wouldn't think that the folks at Galesi would be curious to see what anyone had to say on Twitter if they didn't think they were going to be selected.

The third license, awarded to Wilmorite for their Lago Resort and Casino in Tyre, is where I think this board really went off the track, ethically and logistically.  We'll get to that in a moment.

The recommendation for Montreign is surely no surprise, even to those who weren't trading NYNY stock, given its location in the Catskills, an area which has been practically begging for casino gambling for decades.  It's a lavish proposal with all of those amenities which we're told will attract gamblers to travel to upstate NY from NYC and beyond; an unproven concept which has no precedent here.  Just go their homepage, roll over the letters as instructed to see all of the nonsense intended to dazzle and distract from the facility's true purpose - to get people onto the gaming floor and keep them there as long as possible.

I have some mixed feelings about their selection.  Of all of the regions that were considered, the Catskills is surely the one which warranted a casino given its history as a faded resort area, the enthusiastic support there, and the long effort to bring this to fruition.  So, even as someone who opposes the whole idea of expanding gaming in the state, it's hard to argue with this location.  And it's great news for the horsemen at Monticello, who recently concluded a deal with management which depended on Empire getting the casino.  It guarantees the existence of the racetrack for the next nine years, and grants the horsemen, in lieu of a share of casino revenues, equity in the company (which they may wish they had when the stock was at 9 yesterday).

On the other hand, Mohegan Sun's proposal for a casino on an adjacent slice of the Concord property seemed slightly less cynical and insincere than most of the others in the state; and may have provided more wide-ranging benefits in the region.  The company's CEO, Mitchell Grossinger Etess, has family roots in the area, and may really have cared about revitalizing it instead of just paying lip service to the idea in order to line his own pockets.  His proposal would have included a revival of Grossinger's (which the Etess family used to operate), as well as commercial development in the city of Monticello.  (Etess said afterwards that he is "happy for Sullivan and wish Montreign the best of luck.”)  In its explanation of its decision, the board did not specify any negatives about the Mohegan Sun proposal (as opposed to the Nevele, which it noted had not completed its financing); only that Montreign is "a more comprehensive and well-measured proposal."

Schenectady was also no surprise; indeed, the rumors that it was the leading candidate had been swirling for weeks.  It fits the bill in that it's a city that has struggled financially (though already in the process of a revitalization); and the location, along the riverfront on a long-abandoned industrial site, seems a logical one; it doesn't sit squarely in a residential area like others will or would have.  However, the sentiment was hardly unanimous in favor of the casino; there was opposition to the proposal there.  Didn't cover it much here, and, in fact, when I did, I got yelled at by someone from the group for belittling the notion that the casino would prey on students at Union College (from which I graduated a really long time ago).  Indeed, the school again expressed concerns after the decision.

Personally, while acknowledging the proximity of the campus to where the facility will be and the potential to lure students, I still think that the casino presents more profound problems than preying on students whose parents are spending $60,000 a year to send them there; I'd be more concerned about the community college myself.  The Stop the Schenectady Casino group, seeming resigned to the decision on its website, outlined some of those concerns, particularly those of problem gaming, and the need to "protect the Historic Stockade neighborhood from an increase in traffic that will almost surely reduce the quality of  life in the neighborhood, and threaten the integrity of its historic structures."  (Preserving that neighborhood was the original goal of this group before they pivoted to the casino.)

That brings us to Tyre.  Along with East Greenbush, where Saratoga harness' proposal, led in part in a most arrogant posture by Morgan Hook of the lobbying firm SKDKnickerbocker, was most rightfully denied in the face of the fierce opposition there (though the board would only acknowledge that "the level of public support....was significantly less" than the other proposals), Tyre was where I heard the most from residents terrified at the prospect of a casino destroying the nature of their residential area.  I feel terrible for the people there who will be affected.  Imagine living your life in a quiet area, minding your own business, and some millionaire dude comes along to plop a 24 hour casino right next door.  I wrote extensively about Tyre in this post, and here I'll once again post the Google Maps satellite views - one closer and one wider - of the rural area where this casino would be built.




The red sign post is where the Dawley family lives, and, should this casino indeed be built, their lives and those of their neighbors will surely never be the same.  The residents have mounted court challenges which have thus far been entirely futile.  They've targeted the environmental review process (SEQRA) which, as we detailed here, is designed to be manipulated by the "lead agency" - in this case, the town itself - to fit its agenda.  The Town Board members simply declared that the casino would have no significant environmental impact on community character, and - poof - it became so. One need only to look at the above photos to realize that that assertion is nonsensical and self-serving.  So, we hope that the community will endeavor to carry on their legal challenge.  It seems unconscionable that the location board would allow a casino to be constructed there.

And that's besides the fact that this award to the Southern Tier region is not actually in the southern tier of the state, as we discussed here.  Despite the fact that Governor Cuomo again reiterated yesterday that these casinos will act as a "magnet" to lure New York City residents to Upstate destinations, I can virtually assure you that no one - and I mean nobody - from the city is going to be traveling up to Tyre to gamble, I don't care how many scenic lakes there may be.  (And in fact, I highly doubt they would have traveled to one at Tioga Downs either....and it surely remains to be seen if they do so to the Catskills or Schenectady).  It's been estimated that as much as 80% of the business in Tyre will simply be gamblers relocated from Turning Stone or Vernon Downs or the Finger Lakes; and though that's a self-serving estimate by Turning Stone, it makes far more sense to me than the idea of a family trip from Manhattan.

As you might imagine, Tioga Downs' owner Jeff Gural is not very happy about this.
“I’m totally shocked. I really am. I didn’t think that, first of all, I didn't think that they belonged in the competition, they’re not in the Southern Tier..

“The governor came to Binghamton and announced this and promised the people of the Southern Tier a casino....Um, I was asked to help get the law passed. I spent about $800,000 of my own money to get Proposition One passed, only to get put out of business. I mean, I, I think it’s a joke to be honest with you." [Capital New York]
 Note here that the amount that Gural spent to get the referendum passed has suddenly gone up from $600,000!  And here we see the sense the entitlement that Gural, and surely also Feathers, had about this.  And he went on, and on, and on....
 “It will hurt me at Vernon. But, I don't give a shit about me, I’m wealthy."
....
"It’ll hurt me at Vernon eventually. I wouldn't be surprised if Finger Lakes closes. This is a devastating impact on the racinos in the state that have provided millions of dollars to the state and our thanks is this idiotic decision? It’s a disgrace. No fracking and no casinos? Why don’t you just tell them they should all move someplace else?”
....
“I mean I was concerned, to be honest, that they had a committee of people who knew nothing about the industry, and that’s what you get, you know? I think they’re well-intentioned, but how, they certainly screwed Turning Stone and they put Finger Lakes out of business. They probably put Vernon Down out of business. So basically, they put two casinos out of business and screwed the third one.”
.....
"And what really pisses me off is the governor asked me to spend $800,000 of my money to pass Local Law 1, Proposition One? What was that all about? I mean—why would—the whole thing is sickening to be honest with you."
 The reference to fracking is with respect to Cuomo's announcement that he will ban the practice in the state; curious that he would make that long-anticipated decision on the same day as this one!  Not sure which one he was trying to distract attention from!  (Of course, I'm sure there are some, if not many, in the Southern Tier who believe that yesterday's developments saved them from the ill effects of gambling, air pollution, and contamination of the water supply.)  In making the fracking announcement, Dr. Howard A. Zucker, the acting state health commissioner, noted that his review boiled down to a simple question: Would he want his family to live in a community where fracking was taking place? [NY Times]  That's obviously not the approach that the location board took in deciding to site a casino in the residential town of Tyre.

Tuesday, December 16, 2014

It's Show (and Tell) Time for Location Board

It's a busy time of year, so sorry again for the sparse posting of late, as the announcement of the Location Board's recommendations in the casino sweepstakes fast approaches.

However, the action will really just be getting started once Kevin Law tells us who the winners and losers are (and it's subject to one's interpretation as to whether the winners are the winners or the losers) some time shortly after 2 PM on Wednesday.  The reactions from the developers and the communities will surely span the full gamut of emotions ranging from euphoria to rage, and either, or both, will likely be heard and felt from winners and losers alike.  Some will appeal directly to Governor Cuomo, questioning how the results comport with the spirit of the casino law. Some of the bitterness could spill into the legal arena.

Then the Gaming Commission will begin their process of assessing each of the recommended candidate's licensability, with the help of the State Police.  As I've pointed out, recent history suggests that the ultimate result could differ from what these gentlemen come up with on Wednesday; I'd rate the chances at around 25% that that turns out to be the case.  That phase will be another chance for the meddling governor to meddle.  This location board is one thing.  Despite the fact that it's comprised entirely of men with past ties to the governor - some more so than others - they seem to be earnest about their task, and we can only hope that the two members, at least, who I'd surmise are certainly on Cuomo's contacts list haven't been getting gubernatorial texts in the middle of the night.  But the Gaming Commission is Cuomo's commission. If, for some reason, he has a strong opinion against any of these development teams, it's hard to believe that this commission will proceed contrary to his wishes.

Regardless of whether or not that's the case, you can be sure that not all of the losing developers are just going to slink away.  One can expect a plentiful helping of mud to be slung towards those winning teams in whom the others may sense some vulnerabilities with respect to their licensability.

And, of course, once everything is worked out, we shall see just how fast they get built, how many good jobs they really create, how much business they bring to (or suck from) surrounding communities, how their results stack up against their projections, how many local customers declare bankruptcy or lose their homes.

But it will all start on Wednesday.  The Public Notification issued by Gaming Commission would qualify, I believe, as being cryptic:

 MEETING AGENDA

1.            Call to Order

2.            Consideration of Meeting Minutes for December 9, 2014

3.            Consideration of Recommendations of Gaming Facility Applicants for Gaming Commission Licensure

4.        Adjourn

So, let the licensure-ing begin!  You'll be able to watch the proceedings live via the Gaming Commission homepage; I'm sure they'll be a direct link right here somewhere come game time if it's still not there now.  And of course, Twitter will be the place to be for those of us who just have to experience the world in real time.  Unfortunately, I expect to be otherwise occupied, and I'm fine with finding out an hour later (though not much more than that!).  But I'm sure that you can get live updates here, amongst many other places.

I guess I should try to squeeze in some picks, which I will endeavor to do at some point on Tuesday.  But seriously, other than my original suspicions towards those who I consider to be politically favored, I have no idea at this point. And I don't think anyone else really does either. "There are a million rumors running around, but nobody knows anything."  So said Thomas Wilmot, hoping to build the Lago Resort and Casino in Tyre (one of the scenarios which would definitely spur a flurry of legal action). We've heard the rumor about Schenectady having an inside track; this above-linked-to article on Syracuse.com refers to the belief that the Catskills will get two licenses after and despite all the angst over Orange County.  That's what everyone assumed would be the case when this started.

I don't know where any such rumors would be coming from though.  I wonder, as I write this as midnight approaches on Monday, whether the location board itself knows definitively what they're going to announce.

 - In the meantime, VLT's are coming to Long Island, likely before any of these casinos are up and running (with the possible exception of Tioga Downs, where Gural says he can have casino table games up in six months). As you may recall, Governor Cuomo inserted a provision that provided for VLT parlors whether the casino referendum passed or not.  Since it did, we get both, oh goodie!  Both Nassau and Suffolk OTB have plans for 1,000 machine facilities; "slots in a box" as the Times article refers to them.  One thing to be said about that: it at least dispenses the hypocrisy about some of the window dressing that we've seen in the casino proposals.  No idyllic gardens or ponds here; just a bunch of machines catering to mindless gambling......to the tune of some $150 million in net profits a year expected at the Nassau facility.

One thing's for sure: whatever Cuomo's motivation was for supporting these smaller VLT parlors - a bone for Senate Majority Leader Dean Skelos, a hedge against the referendum being defeated, or simply a further effort to bleed more out of the gambling stone - one can be sure that he wasn't thinking about the fortunes of the racing industry.  While Yonkers could lose a very small piece of its action (GM Bob Galterio did note during his FIOS interview that they've managed to maintain a number of customers from Long Island even after Resorts World opened), one would think that the Big A racino would surely stand to lose out the most.  And for NYRA, it's a potential double whammy: Any reduction in Resorts World action would negatively effect payments for purses and infrastructure.....while the new slots parlors will be new competition for Long Island OTB dollars that presently go to racing.  [UPDATE: Reader Dan points out that the NYRA horsemen will get a portion of this slots revenue.  Mr. Hegarty reported last year that it's 2.75% to horsemen and .5% to breeders.)

Saturday, December 06, 2014

Is Schenectady Casino in the Bag?

Hi.  Hope everyone had a great holiday!

As I'm sure you know by now, the next meeting of the location board, scheduled for December 17, is expected to produce the announcement of its recommendations as to who to license for up to four casinos in the state.  And let's emphasize again that these will be exactly that: recommendations to the Gaming Commission, which will ultimately decide whether or not to issue the licenses accordingly.  It's not an insignificant point, considering that the last two big decision processes of this sort that we've covered here over ten years of being Left at the Gate ended with a twist:  Governor Paterson himself selected AEG to get the Big A racino, but it ended up with Genting; and, an Ad Hoc Committee selected Excelsior Racing to get the racing franchise in 2006, but Governor Spitzer ultimately went back to NYRA (a longer and more complex story to be sure).

In a concerted push for the Hard Rock proposal in Rensselaer, just outside of Albany at the Amtrak station, mayor Dan Dwyer and some 30 other elected officials gathered at the site on Wednesday to announce their support.

What impact the announcements will have on the selection process is unknown, said McDonald, of Cohoes, and a fellow Democrat, state Sen. Neil Breslin of Bethlehem.

With time running out, the group deemed it worth making the public effort within sight of the state Capitol. They brought in for support Democratic Assemblywoman Patricia Fahy of Albany and three retired state lawmakers: Republicans Roy J. McDonald, who represented Saratoga in the state Senate, and Bob Reilly of Colonie, who served in the Assembly, and Democrat Jack McEneny, who was an Albany assemblyman. [Albany Times Union
Additionally, Mayor Dwyer announced the completion of the previously-contemplated deal with Albany to pay the city $1.1 million annually from gaming revenue, and commit to job opportunities for residents.  Dwyer had previously insisted on exclusivity, which was thwarted when Albany Mayor Sheehan reached a similar, yet different, agreement with the Capital View project in East Greenbush.
Rensselaer's payments will come for the city's annual $5 million to $5.7 million host community payment, while the payment for East Greenbush would be made by the casino developer. The money from Rensselaer would go to the city's general fund. The East Greenbush developer would pay Capitalize Albany, the city's economic development wing. 
This above-linked-to Times Union piece serves to support those loud whispers we've been hearing that Schenectady has the inside track on this thing, and portrays this as a last ditch effort to persuade the Gaming Commission that Hard Rock is the best option.  Columnist Chris Churchill, writing for the same paper, goes further, writing that the notion that this is in the bag for Schenectady is "widespread amont insiders."
That suggests the deal between Albany and Rensselaer, officially announced Wednesday, could be a Hail Mary by a casino team that's desperate and realizing it's not going to win.

Or maybe, just maybe, the deal is a response to a whispered message from someone in state government that sounded something like this: "Listen, we want to give this to you. But you need to bolster your local support before we can."

As troubling as it would be for the integrity of the gaming commission's process, the second scenario seems as likely as the first. And that would mean Schenectady doesn't have the casino competition wrapped up after all. 
To me, the developers of the proposed Rivers Casino and Resort, on the shores of the Mohawk River in Schenectady, bring precisely the kind of concerns that has the potential, however slight one may believe it to be, to cause the kind of licensing issues that could lead to the type of twist we mentioned above.  Rush Street has received negative publicity over its involvement in the development of casino-type games aimed at kids; and has been the subject of intense criticism by the UNITE Here union over its labor practices. And Och-Ziff Capital Management, who would solely provide the funding, is a subsidiary of a company being investigated by the SEC for investments said to prop up the brutal reign of Zimbabwe president Robert Mugabe.  [Ooops, they are actually the Hard Rock funding arm, sorry for the mixup.]

Churchill also criticizes Och-Ziff Capital for not being willing to make the payments to Albany itself, as Capital View is proposing for East Greenbush, rather than have it taken out of casino revenues that may otherwise flow to the city of Rensselaer.
Och-Ziff isn't even donating to the other newly announced sweetener of the proverbial pot: a pledge of $500,000 to build a dock for the Half Moon, the financially troubled replica ship. That money would come from the city of Rensselaer, along with casino partners Flaum Management and Capital District OTB.

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 counties.....is 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 (NYNY...how 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.