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Wednesday, October 22, 2014

Nuthin Doin on Casino Selections

There was a hastily-announced meeting of the Gaming Facility Location Board on Monday evening.  But they wanted to make it perfectly clear that nobody should be expecting nuthin'.

Just so that nobody got excited or anything. I presume that no one from the press showed up, and that, therefore, no one asked anything about #3 on the Meeting Agenda: a Motion to Enter into a closed Executive Session to consider the "Financial History of Particular Persons or Corporations, specifically Applicants Responsive to the Request For Applications to Develop and Operate a Gaming Facility in New York State."  I'd be curious to know exactly which of the applicants who were responsive to the Request for Applications to develop and operate a gaming facility in New York State were having their financial history considered.  Perhaps this one?

In any event, as I've been saying all along, I'm not expecting any announcement prior to Election Day, lest the decisions piss off any voters who may be considering voting for the incumbent governor.  So it's pretty quiet right about now.  There's been recent news that the Traditions Casino developers have reached an agreement with the Hotel & Motel Trades Council that allows it to move forward with its bid.  We read that Genting's Resorts World racino at the Big A has 'quietly become the most successful racetrack casino in the world....' though I don't know how significant that is given that I don't know that there are any racetrack casinos outside of this country.  And something about Donald Trump, as if anyone cares what he has to say (though more on that below).

One comment though on Genting....again, they're insisting that a casino in Tuxedo will not cannibalize business at its Resorts World racino at the Big A, because RW is a racino with electronic games only, and Sterling Forest would be a full-service casino with hotels and beautiful gardens and skiing and stuff.  Of course, that's easy for them to say, because they have Yonkers smack in between the two to absorb any blow.  And eventually, the whole region will be so loaded with casinos that each will likely have its own little local market from which it draws the majority of its customers.  And Genting can talk all it wants about Asian customers flying in from Beijing, and how that will create all this massive revenue without draining domestic customers from other facilities.  But then what will happen when it opens its own grand Asian-friendly casino in Las Vegas, complete with live panda bears?  You mean, they're not going to want to fly those same baccarat enthusiasts there too?  The global village gets smaller and smaller, and the predicted saturation is going to occur.  One way or another.

Otherwise, while we're waiting, what do you want to talk about?   Seems a good opportunity for me to pivot to the Breeders' Cup.  But I don't really want to; don't find it particularly compelling.  However,  I hope to get around to handicapping a couple of the races well as my annual diatribe about how the BC hasn't achieved its goals; and, in fact, has been negative for the sport overall.

So, of course, there's the elections.  Let's talk a bit about how Governor Cuomo has bamboozled everyone in a way that has cornered me into thinking that I actually have to vote for him!  Yikes!  I'm dead set against doing so for a variety of reasons that I probably don't need to go into here.  However, consider the matter of the Women's Equality Party (WEP) that he created; that as opposed to the Working Families Party (WFP), who granted him their ballot line over Zephyr Teachout in exchange for what was supposed to be the governor's enthusiastic embrace and energetic support for Democratic control of the NY Senate.  (That support has been half-hearted, at best.  He announced support for Adirenne Esposito, running for a vacant seat on Long Island, in a manner which the Times described as "[leaving] something to be desired."  Then, he endorsed three Democrats running upstate - incumbents Celia Tkaczyk and Terry Gibson, and Justin Wagner, running for a seat being vacated by a Republican - via press release rather than in person....and on a Saturday - from Puerton Rico no less! - when it tends to get lost.  Yeah, that'll really do it!  Thanks, Gov.)

Anyway, and briefly,  the governor established the Women's Equality Party amidst much cynicism as to his motives, given that the notion of the party's name is already a cornerstone of the Democrats' agenda.  In fact, it's quite possible that the Women's Equality Act would already have passed in its entirety (including the controversial - to Republicans - notion that Roe v Wade, currently the law of the land, should also be the law of the state; just in case the Roberts Supreme Court someday overturns it) had Cuomo not encouraged and empowered the current arrangement in the Senate whereby the minority GOP shares power with the IDC.  (Additionally, his broken promise to veto partisan redistricting is no doubt contributing to what appears to be an extremely strong threat of the GOP taking the Senate outright in two weeks.)  Or, perhaps, had he put as much energy into seeing it passed as he did with the casino amendment.

By encouraging voters to vote for him on the WEP ballot line - as I was specifically encouraged to do by a recent campaign call - Cuomo is not only, as Senator Liz Krueger recently noted, causing a bloc which makes up 54% of the state's voters to be "relegated to some non-party," but he threatens the very viability of the WFP.  (And if you're confused between the WEP and the WFP, many people feel that's exactly the goal.)  If Cuomo does not receive at least 50,000 on the Working Families Party line, the party will lose its position on Row D of the ballot and possibly threaten its presence there altogether.  Since the Working Families Party has become, in my view, an important progressive voice as the governor has shifted to the political center in order to further his own political ambitions,  I would not want to see that happen.  Thus, I must seriously consider holding my nose, and voting for the governor on the Working Families Party line.  Yuck. 

 - Senator Krueger is also leading the party's opposition to Proposition 1, the farcical redistricting procedure that resulted from the deal between Cuomo and the Senate GOP that nixed the former's promised veto of the most recent redraw.  The process that would result should the proposition pass is a not-at-all thinly veiled attempt to land the process right back into the hands of the parties in control of the chambers at the well as formally establish the existing amorphous districts as the baseline for future changes (which is not currently the case).

 - An article by Michael Vass on the Binghampton Examiner site contains some succinctly smart observations on casinos that I'll post here without any further comment necessary: 
Unlike almost any other industry, casinos are essentially a zero sum industry. In essence casinos take more out of communities than they put in - if they are successful. Casinos do not create a good that can be sold, and the number of jobs created is fixed once a casino is up and running. The goal of all casinos is the Las Vegas model. That is that the glamour and entertainment is attractive enough to pull tourists from other locations, thus increasing the pool of money that can be taken without destroying the local economy the casino is based in.

For more than 2 decades Atlantic City did exactly what Las Vegas has done. They pulled visitors on the East Coast via boxing matches and ease in travel (compared to Las Vegas). There is the benefit of a decent climate (for the northeast) and a beach in addition to entertainment venues. This was an ideal situation, until competition arrived.

No, New York will never be saved by casinos......Given the relatively harsh winters (that numerous New Yorkers escape south to avoid every year), the lack of diversity in Upstate New York, the limited pool of discretionary dollars available, and high competition, casinos cannot be the savior to New York's State deficit. For these same reasons local communities, that may gain a short-term bump due to curiosity and ease of travel, will not have meaningful long-term improvements.

In fact, it is a very real probability that at least some of the local communities in Upstate New York will be harmed by the casinos. The limited pool of discretionary funds available in these areas may funnel into the casinos. Funds that will never reach back to the communities they came from, because that is the purpose of a gambling casino - if they are run to create a profit. [Examiner]
UPDATE:  Our buddy El Angelo points out that SD-40, where Justin Wagner is running against
Republican Terrence Wagner for the seat being vacated by Greg Ball (R), lies in large part in Westchester, and therefore does not qualify as being "upstate."  Here is what this district looks like:

Thursday, October 16, 2014

Plain and Simple

Capital New York has more on baccarat, the casino card game that Genting is planning to fly Asian high rollers from around the world to play at their Sterling Forest casino in Tuxedo.  They told the Location Board at their oral presentation that they plan to derive 45% of their revenue from international customers by the time the Meadowlands would get a casino off the ground.  So, they don't really care about all of the local competition that is saturating the region.  They have a global market.  They are trying to tell us that they're not really competing against the local market....and that not only will they not be adversely affected by the competition, but that they won't cannibalize them too much either.  Not everyone is buying that.

Alan Woinski, an independent gambling consultant, thinks Genting's new argument has some merit, but doubts it will address competitors' concerns.

“Yeah, they’ll fly some of their high rollers in from Asia and from their other markets,” he said.

But, he said, “They’re trying to make the case that they aren’t going to completely cannibalize anything else in the area. They’re lying.” [Capital New York]
Still, Woinski opines: “If I had to tell you what would be the most successful casino in New York it would definitely be the one that caters to Asians."  That's because, according to the article, nearly a quarter of the $6.5 billion generated by Las Vegas casinos last year came from baccarat tables.

So, what is this game that is so appealing (at least to Asian players)?  I did a little research, and it's a very plain and simple game with very little in the way of decision making.  In fact, the 'mini-baccarat' games in particular seem more like betting on a coin toss.  Here's a very basic video tutorial if you are interested.  The narrator explains that it's a "social game and a fun game," due in part to the player's ability to take his/her time and draw out the suspense in revealing the cards.  Here's a video that I found on You Tube of a baccarat game taken by a hidden camera.  Check out just how much fun everyone is having!

As to its appeal, an article from the Las Vegas Sun which is linked to from the Capital NY article explains:
It offers no opportunity to use logic or creative thinking, as poker does. It offers none of the intellectual stimulation of noncasino card games like bridge or hearts. It offers no chance to win a veritable fortune on a single modest bet, as you might with horse racing’s Pick Six.
“The Asians love the characteristics of the game,” says Bill Zender, a former gaming executive who served as vice president, director of casino operations and part-owner of the Aladdin hotel-casino. “To them it’s a pure gambling game. Once the cards have been shuffled, cut and placed into the shoe, the cards speak for themselves.”
Non-Asian tourists would rather play a game that gives them an opportunity to make decisions on their hand.
Oh.  You mean, like slot machines?

The more I learn about all this casino stuff, the less sense it all makes.  I really don't want to wade into territory of stereotyping ethnic groups (though there doesn't seem to be any issue whatsoever with Genting and other casino operators doing so).....but horse racing at least used to be considered to be a game that Asians enjoyed too.  I recall, back in the day, how we always would note and comment on how many discarded Racing Forms and track tickets one would see on the ground around Chinatown.  That game involves a lot of decision making, as you probably know.  Maybe they, and all the non-Asians sitting at slot machines as well, have simply gotten tired of having to think so damn much!  I mean, who the hell needs that!?

Apparently, the game got a boost in the 60's thanks to appearances in James Bond movies; particularly this one, from Dr. No (which actually features a variation of the game called Chemin de which appears to involve at least a little thought).

James Featherstonhaugh, playing the villainous Dr. Yes in the film From Saratoga With Love, in which he torments the good folks of East Greenbush, said of Genting's plan:
“I don’t want to flunk geography here, but I think once you get on an airplane, it’s certainly at least is easy to go to Las Vegas as it is to a standalone casino in Tuxedo, N.Y."
Perhaps if Jimmy Feathers was paying attention to Genting's presentation, he wouldn't flunk geography as he has failed the test of common decency.  There, Genting noted that it takes two more hours to fly from Beijing to Las Vegas as it does to NYC.  From there, they could hop on Genting private jets (red no doubt, just like their buses), fly up to Stewart Airport, and be seated at the baccarat table in no time.  Besides the fact that NYC offers tourist attractions that Vegas does not.  (Though the brothels are illegal here.)

Meanwhile, the zoning board in East Greenbush went ahead and approved rezoning laws which would clear the way for a casino on Thompson Hill; that despite another demonstrative display of opposition by the town's residents. 
Acting Chairman Tom Calamaras voted in favor of it. “We did what we were asked to do by the town,” he said. “Plain and simple.”
The people in East Greenbush don't want a casino.  Plain and simple.  Just like baccarat.

Tuesday, October 14, 2014

Wise Dan Videos Were Not That Wise

Well, now that Wise Dan is out of the Breeders' Cup, he really isn't that interesting!  Trainer Charles LoPresti said that the horse is a 'one' on a "lameness scale of one to five."  That's surely a number at which a lot of horses run all the time; even top level horses in stakes races.  But you can't blame the connections for not running him here. 

"He's mad; he wants to go to the track."
Well, that's interesting!

But so much for the Most Interesting Horse in the World videos.  Despite my reservations about the wisdom of that ad campaign, it's a rough break for the people at America's Best Racing who commissioned them, and you gotta feel bad for them.  However, it's another really good reason to not market this sport on the back of any particular horse, no matter how interesting - or brilliantly fast - it may or may not be.  It's a betting game, how many times do we have to say that?   I imagine that we won't see the remaining four installments of the series.  And I don't think anyone will be crying in their beer about that.

 - Also missing from the Breeders' Cup will be Mike Battaglia, unceremoniously dumped after 21 years working racing telecasts for NBC.  Battaglia, who, according to DRF, has been making the morning lines at Churchill, Keeneland, and Turfway for 40 years, was a humbly knowledgeable presence on the telecasts.  I wouldn't say he was indispensable.  But he had a pleasant and unpretentious demeanor which no doubt made the occasional and non-race fans in the audience feel comfortable.

And the main problem I have is that it's not like he's being replaced with Serling or Maggie or Christina Blacker or some other bright racing presence.  But rather, with Eddie Olczyk.  Not that I have any problem with Eddie O......after all, he's on the Cup with the 1994 Rangers, he's a great hockey analyst and a nice guy.  But he's a hockey guy.  So I don't really understand what the thinking is here.  It's not like it's peak time of the NHL season that he would be reaching a lot of people by promoting the event and his appearance during playoff games.  (Mike Emrick already does a good job of setting him up to pick the Triple Crown races and promote those telecasts.)  And while I'm sure he knows racing, it's not logical (nor a knock on him) to believe he knows as much as those who make a living in the sport.

I find that many times, a guy in this spot will go out of his way on a telecast to show everyone that he knows the sport and that he belongs; which leads to a strained and unnatural on-air presence.  Let's hope that Eddie O can avoid that.

Location Board Selections May Not Necessarily Be The Final Word

Interesting piece from over the weekend in the Finger Lakes Times that's worth a read.  It's based on an interview with Mark Gearan and Robert Williams, the Chairman and the Executive Director, respectively, of the Gaming Commission.

I'd never considered the point raised in the lede - that Gearan would either push for a casino in his native Finger Lakes region......or specifically not do so in the interest of avoiding the appearance of favoritism.  Writer Mike Cutillo goes on to note: 

The fact, though, is this: Wherever the state’s four new privately developed casinos will be, Gearan will have had absolutely no say in the matter.

As chair of the commission, Gearan had everything to do with naming the five volunteer members of the Gaming Facility Location Board. However, it’s that board alone — and not the Gaming Commission — which is in the process of determining the fate of the 16 projects vying for those four licenses, including Wilmorite’s Lago Casino & Resort. [Finger Lakes Times]
However,  I don't believe that this is entirely true. Yes, it is the case that, as Williams notes:
“The way the statute was constructed is that these five individuals would make a recommendation [emphasis mine] on location to the Gaming Commission....The commission does not have the ability to substitute out judgment that they think one project is better than the one that was recommended ... they don’t have an ability to determine that project ‘X’ is better than project ‘Y.’”
However, while the Gaming Commission cannot judge the applicants as to which is "better," it can indeed determine that an applicant that was selected by the Location Board is not licensable.  That's its job.  And we don't need to go very far back in history for an example of this.  In 2010, AEG was selected to build the racino at Aqueduct, by Governor Paterson himself (that as opposed to this year, when Governor Cuomo expects us to believe that he's "not playing a role in that") (hee hee).  However, AEG was officially eliminated (amidst all of the obvious corruption involved in the selection) when the Lottery Division declared that the group was not licensable.  Now that the Lottery Division has been folded into the Gaming Commission, it is the latter which needs to make that determination. 

So, unless the Location Board members have been consulting with the Commission as to the worthiness of the applicants from a licensability standpoint and is making their selections with that in mind - and given that we've been repeatedly told that they are considering 70% economic factors, 20% community support [or lack thereof], and 10% workforce enhancement factors, I don't know that that's the case - it will be up to the Gaming Commission to make that determination.  Thus, the time gap between fall, when the Location Board makes its "recommendations" - Williams' word - and early 2015, when the Gaming Commission issues licenses.

So, it's possible that the Location Board could make a selection that the Gaming Commission will not license because, say, the developer owes $72 million in taxes.  Or because the funding entity is part of a company which has supported a ruthless dictator.  Or because the company markets "social" gambling games to kids.  Or for the same suspected connection to an organized crime figure that disqualified one of the developers from consideration in Massachusetts.

Please correct me if I'm wrong, but I don't believe that the standards of licensability are carved in black and white, and are therefore subject to interpretation.  Point being that, even after the Location Board makes its recommendations, there is still an opportunity for a meddling governor to meddle in the process.  The Gaming Commission is his commission, after all.

 - When questioned by the reporter about the opposition in Tyre (the local area served by the newspaper), Williams noted:
“Opposition in Albany to one of the proposals there and in the Catskills to at least two proposals is perhaps even more vociferous than what you find in Tyre, but I don’t want to diminish the opposition in Tyre by suggesting they’re coming in third place. They’re very dedicated as I think Chairman Gearan will evidence ... he’s actually had visitations to his Gaming Commission meetings from individuals from Tyre.”
Williams is, of course, referring to East Greenbush in the Albany area.  I believe he's probably actually referring to the Orange County bids in Tuxedo and perhaps Woodbury rather than to the proposals in the actual Catskills, which don't have any significant opposition as far as I know.  In a humorous column today in the Albany Times-Union, Chris Churchill ranks East Greenbush as "dead in the water."
Pros: There must be a compelling reason why this relatively affluent town should benefit from a gambling expansion designed to help distressed communities. And that reason is ... Um, I'm going to need some help with this one. Anybody? Anybody? Hello?

 - Catching up a bit from the weekend, the Times had a piece on the lawsuit by the Harriman family against the Woodbury casino.  Since I mentioned it in this post, this situation has not gone away.  The problem is a deed restriction from the 1971 sale of the land by the family which prohibits the construction of a hotel on the site.  The developers - Caesars World and David Flaum - offered the family $2 million, but that bribe payment was rejected. They thought they'd found a way around the restriction by leasing an adjoining plot from Norfolk Southern Railroad; the plan was to put the hotel specifically on that land.  At first, the Harrimans claimed that the casino and hotel constituted a single building so that the restriction still applied.  But they subsequently discovered a weapon seemingly far less subject to judicial interpretation.
..After digging through property records, Mr. Sweeney discovered the Norfolk Southern property was also under a Harriman deed restriction.

E. H. Harriman’s wife, Mary, had granted an easement to the Erie Railroad in 1910. But the contract included a clause, Mr. Sweeney said, stating that the land would revert to the Harrimans if the railroad no longer needed the property for railroad purposes.  The Harrimans notified Norfolk Southern that a casino resort was not a railroad purpose, and therefore, wanted their land back. [NYT]
Oops.  Don't you hate when that happens?

Saturday, October 11, 2014

Not That Interesting

Wise Dan is actually not the most interesting horse in the world.  He's actually rather dull.  All he does is win.  He has a rather monotonous record of 14 wins in his last 15 races since he switched to turf racing as a full-time occupation.  His only loss in that time was a second-place finish in a race rained onto the Keeneland Polytrack.  (I supposed he'd be scratched if that happened now, with the main track switched to dirt.)   It's usually not that close either.  Only twice in that time was his winning margin small enough to be expressed in body parts rather than in numbers.  Yes, he made it really....well, interesting, when he returned from colic surgery to gut out a nose victory at Saratoga in August.  (In a recent board meeting, NYRA CEO Chris Kay singled out that appearance of the two-time Horse of the Year as one of the highlights of the Spa meet.....though, at the time, NYRA was just so very excited that they carded his race in the early afternoon to keep it out of the Pick Six.)

Perhaps you've seen the series of videos produced by America's Best Racing.  While well-intended, they miss the point, as does virtually any attempt I've seen by whatever passes for a national racing body to promote this sport since 'Go Baby Go.'  (And it's an unfortunate case of an industry that is trying to rid its image of drugs ripping off a beer commercial.)  This is a betting game.  And, though the clips end with the tag line "keep betting, my friend," that point is one that is not effectively conveyed here.

So, what exactly will these videos accomplish other than generating some royalty payments for Dos Equis?  The only people who care about Wise Dan are the people who already care about him.  The chances that these videos are going to inspire anyone who won't already do so (particularly in the East-leaning time zones) to stay home on a Saturday evening and turn on the TV to watch him compete in the BC Mile are highly unlikely.  And even if they did, chances are that they wouldn't be betting on or against him, or on any other race thereafter.

Of course, these clips could perhaps be more effective if they were actually really funny.  The first two had their moments ("one time, he came in 8th, just to see how it feels").  But the 3rd and 4th installments have me shuddering at the notion that there are still four more to come.

So, I took the third video and redid it in an attempt to add some yuks.  I can't say for sure whether I have succeeded. 

Thursday, October 09, 2014

Casino News and Notes: Unions For and Against, Missing Houses, and Blandishments

Two top union leaders want to see casinos located in Orange County rather than in the Catskills.  But another one is lobbying against one specific project there.

The heads of the AFL-CIO and the Hotel Trades Council wrote to the Gaming Commission to opine that Orange County casinos "will create the most jobs while generating the most revenue for New York's schools." [NY Daily News] A Sullivan County official responded to point out the obvious - the union doesn't really care about the latter, and is only interested in the most jobs for its members.  And I think it's not really in dispute that a casino 50 miles from NYC will generate the most revenue; the question is whether it would comport with the original intent of the legislation.  So we'll put the union leaders' letter in the blah, blah, blah category.

More interesting is the continued and persistent campaign by Unite Here against Rush Street Gaming. As you may recall, they brought workers to the public comment hearings to complain about their treatment.  And then, they mailed postcards criticizing the company's involvement with social gaming for kids to 15,000 Capital District and Orange County residents.

Now, they have released this radio ad in the Albany market.

“There are casino companies right here in our state who offer good wages and benefits, and they don’t fight workers who want to union,” the worker says in the ad. “I just wish I worked for one of those other companies instead of Rush Street.” [Politics on the Hudson]
(How secure do you think Fred Lapka's job is right about now?)

Of course, the aforementioned Hotel Trades Council has no issue with this alleged mistreatment, nor the kiddie casino games, because they've reached an agreement with the company.  Rush Street responded with their usual statement that notes their "Best Places to Work" awards.  They are bidding for the Hudson Valley Casino in Newburgh (with Saratoga harness) and for the Schenectady proposal (with Galesi Group).

Could be that Saratoga Raceway & Casino's Jimmy Feathers may have a big problem here despite his political connections that we've felt make him a shoo-in for a license.  Besides Rush Street under this concerted attack, his East Greenbush proposal should really be a non-starter at this point, considering the sustained and righteous opposition from the community there.  Seems to me that he withdrew from a Saratoga proposal in the face of less strident opposition than he is facing here, probably with a grand scheme to monopolize casino gambling in the Capital District market with two facilities.  If he had any decency whatsoever, he'd graciously withdraw from East Greenbush too.

Those opponents were out in force again last night at a Town Planning Public Hearing where the environmental study (SEQRA) was discussed.  Amazingly, the developers have only recently started the process.  This is a strategy memo that was prepared for the occasion.  One humorous note I saw on the No East Greenbush Casino Facebook page: The developers came with a table model of the proposed site.  It was noticed that the model conveniently (for the developers) ignored 30% of the homes on the Thompson Hill Road, the road on which this facility is being proposed. 
When my wife questioned Saratoga's new design guy, Mr. Davis, he said she was wrong. Numerous witnesses were present. My wife pointed out that her own mother lives across the street, and that her mother's house didn't make it's way onto the model, nor did two others homes! When pressed, Mr. Davis said the map was still wet and that a lot of the model fell off on the way in.  [lol - ed.]  Again, my wife pointed out that the driveways embossed or painted onto the surface weren't even there, so no houses could have been there either. Julie Miner, of J. Strategies, was heard whispering to him that houses were in fact missing. Within moments another gentleman was asking us to step away so that the table could be covered.

If the map table was off by 30%, what else hasn't been correctly portrayed? I think lots of things. Rush job on the map table, rush job on the timetables for working the SEQRA process, rush job on telling the Supervisor a casino was coming, rush job on getting school Superintendent Nagle allegedly on board, on and on and on. Again, small point, I'm sure Mr. Davis is a fine engineer, and he probably didn't even make the model himself, but the small points sometimes point to bigger problems. Planning Board: Pay attention.
Not really that small of a point, in my opinion.   The inappropriateness of sticking a 24 hour casino on a quiet residential road is one of the key points here; and by falsely minimizing the number of residences that will be affected (fell off, my butt!), the developers are intentionally trying to distort the reality in order to mitigate negative effects that relate to two of the criteria included on the SEQRA form: Consistency with Community Plans, and Consistency with Community Character.

 - A majority of Tyre residents oppose the casino there.

 - More opposition to Genting's Sterling Forest casino based on environmental concerns; in the form of an editorial in the New York Times, and an appeal by the Appalachian National Scenic Trail.  I'm not familiar with the history, but it's clear that preserving that 22,000-acre parcel of green space was the subject of extensive efforts by environmentalists and politicians back in the 90s.  The Appalachian Group points out the casino site's proximity to the hiking trail. 
The casino would be visible from two prominent viewpoints on the trail, and would contribute to lower air quality and higher level of sound, and would have other adverse impacts, the group said.
The Times points out the risks to the "pristine" watershed which provides "clean drinking water for millions of people in New York and New Jersey."  Referring to Genting's outrageous offer of a $450 million up front payoff (far in excess of $70 million), the editorial notes:
These blandishments should be resisted and the application denied.
Yeah, I had to look up 'blandishments,' and I'm actually not sure that it's the right word in this instance.  It means: a flattering or pleasing statement or action used to persuade someone gently to do something.  Personally, I wouldn't put a voluntary payment of $380 million in the category of 'gentle persuasion.'  I will endeavor to use the word in what I believe to be a more appropriate manner in the near future.  Have a great day.

Tuesday, October 07, 2014

Cuomo Will Have His Say on These Frackin' Casinos

Capital New York reports on the latest example of the Cuomo Administration involving itself in something that's supposed to be an independent and objective process (exposed only after the state acceded grudgingly to a FOIL request). This took place in 2011, at a time when the governor was considering the approval of fracking on a limited basis in the Southern Tier.  The plan was abandoned in favor of Cuomo's current strategy of simply stalling on a decision after this June, 2012 article in the New York Times, said by the report to have been a "trial balloon" for the plan, was received poorly.

The original draft of a federal water study by the US Geological Survey (USGS) that was commissioned by the state contained "politically inconvenient conclusions" for the governor's fracking plan, as well as for other energy projects that are under active consideration today

Email communications over a period of several months between Cuomo administration officials and federal researchers were obtained by Capital, in heavily redacted form, through a Freedom of Information Act request. The messages reveal an active role by Cuomo's Department of Environmental Conservation in shaping the text, and determining the timing of the report's release.
In the early study draft, author Paul Heisig noted that gas “drilling, extraction, transport via pipelines, and underground storage” could inadvertently introduce methane into drinking water supplies.

But the version published after the copy was reviewed and edited by staff members from the state D.E.C. and New York State Energy Research and Development Authority omits the reference to pipelines and underground storage. The later, administration-vetted version also includes a line that wasn't in the earlier draft, saying that methane pollution risks in fracking are mitigated by well designed gas wells: “This risk can be reduced if the casing and cementing of wells is properly designed and constructed.”
Though heavily redacted, the emails show a number of New York officials were involved in the study’s drafting, including Eugene Leff, a Department of Environmental Conservation deputy commissioner. Leff is a longtime Cuomo loyalist who worked for the governor back when he was attorney general, and whose installment at the D.E.C. was a priority for Cuomo after his election in 2010. [Capital New York]
I would also point out that D.E.C. Commissioner Joe Martens, appointed by Cuomo, also has a long history with the family, having served for four years in the Mario Cuomo administration.

The article tells of an instance in which a USGS staff member had to remind state officials that they are "a 'science organization' which is not in the business of advocating particular positions."

If this all sounds familiar, it's because it is.  The Gaming Commission is Cuomo's commission, and they appointed the Location Board, which is staffed by five men who all have ties to the governor, as we've pointed out (ad nauseum) in the past.  (And we'd also mention that the crucial SEQRA process that all the bidders need to complete was established and is overseen by the same D.E.C. led by the same Cuomo loyalists, though we've also noted that they have limited input into the local approval processes.)  Once again, the point is that we expect that Governor Cuomo is surely going to express his opinion as to who should get these casino licenses, and that the members of the location board are going to be listening quite closely.

 - We've heard a lot about how new casinos in New York will attract customers from other states and/or New Yorkers who are currently traveling over state lines to gamble.  That doesn't mean however that casinos in those other states will take this lying down.  Recent reports tell us of two Pennsylvania casinos that are reacting to the prospect of increased competition by expanding themselves (that despite the latest statewide declines there)....and it sounds like they are taking pages out of the New York playbook.  Mohegan Sun at Pocono Downs is planning to add features aimed at attracting more customers from a wider radius.
“It’s our pack up the minivan approach,” Bean said. “We want to make our complex a family destination by giving more people from farther distances more reasons to come here and stay longer.”

Bean....said future plans include an indoor water park, a summer snow skiing park, an indoor sports complex, a retail shopping center and possibly a second hotel. [Times Leader]

Sounds like we could also be headed for an over-saturation of water parks (no pun intended)!  Remember that Jeff Gural specified Pocono Downs as a casino from which a Tioga Downs facility could attract or retain customers.

Similarly, the successful Sands Casino at Bethlehem is planning to add a second hotel, a Bass Pro Shop, a convention center, and a new Italian restaurant run by a celebrity chef who is not named Mario Batali.  Seems the answer to more competition is to get even bigger, growing at a pace apparently well in excess of the number of new casino gamblers. It doesn't take an economist to see where that is all headed.

 - Officials of Seneca and Oneida Counties are going at it over the prospect of a casino in Tyre.  The latter is the home of the Turning Stone casino and the Vernon Downs racino, and Oneida is worried about the prospect of a casino that would be 75 miles away.  Seneca officials are rather incredulous. 
"My friends in Oneida County have apparently been drinking heavy doses of Turning Stone Kool-Aid,” began a statement released by Seneca County Board of Supervisors Chairman Robert Hayssen. 
“Does County Executive Picente understand what competition is all about,” continued the Seneca County official in his scathing rebuke. “This is America, not Cuba. Competition is good for businesses and for the customers. Even competition where one party (Turning Stone) – his party – gets a 10-county monopoly.” [Rome Sentinel]
Indeed, the deal that Governor Cuomo made with the Oneida Indian Nation last year prohibits a casino from being built in Oneida and nine surrounding counties (Vernon Downs is grandfathered in).  Seneca County is not included.  To give you an idea of just how large that area of exclusivity is, it's the brown colored area in this map (from

So, we are surely not crying for the Oneida tribe here.  Besides the fact that they had operated since 1993 without turning over a penny to the state.

For their part, Oneida County is concerned that customers from the Syracuse area who presently frequent Turning Stone may be lured to Tyre, should Wilmorite get a license for their proposed Lago Casino and Resort there.  However, Syracuse is located 34 miles from Turning Stone, and 48 miles from Tyre; so those customers who are distance-sensitive are not going to change their habits.  And besides, Oneida gets a flat, guaranteed $2.5 million a year from Turning Stone under the agreement; any loss in the county's revenue from a downturn in business would come from its 25% share of the state's 25% share of slots revenue, the latter estimated to be around $50 million a year.  So, if Turning Stone is down, say, 20% (which surely seems on the high side to me), the cost to Oneida would be $2.5 million of the approximately $15 million they are receiving now; or a 17% reduction.

That's a bummer.  But hard to feel too bad for them, considering the protection granted to the casino by the state, and the sudden windfall to the county that resulted from Cuomo's politically-motivated deals with the Oneida and other tribes that were conveniently concluded months before the referendum vote, effectively ensuring that they would not oppose it.  So, shut up Oneida County.  (And besides, it says here that Governor Cuomo will see to it that Jeff Gural will be rewarded for the $700,000 he spent in support of the referendum and get his casino at Tioga at the expense of Lago and Traditions.)

 - Here's a couple of interesting little tidbits I've seen in the last few days.  Back to the Sands Casino in Bethlehem, seems they're having a little problem with the Asian customers they're busing in from NYC to play baccarat.
More than 50 buses a day flow in from the Asian communities of New York, giving Sands the busiest table games in Pennsylvania. But Juliano acknowledged the practice of bus riders' selling their free play cards and spending the next five hours loitering in the casino and surrounding south Bethlehem neighborhoods has been a frequent complaint by other casino patrons. To address that, he instituted a policy prohibiting bus riders from entering the casino with large bags, which some have used to carry in everything from bagged lunches to newspapers to laptop computers. [Pocono Record]
How pitifully sad is the idea of people spending their entire day riding back and forth on a bus and hanging out for five hours in order to sell a $45 free play card?

And finally, there's this (h/t to our friends at Save East Greenbush).  The state of Missouri has a novel idea to try and stem their regular annual declines.  (By the way, they charge patrons $2 per every two hours they spend in casinos there.) (Don't give NYRA any ideas.) 
A law passed over the summer might help casinos in Missouri. The new credit law allows casinos to loan money to gamblers. Gamblers can establish $10,000 in credit.

“This money that they would borrow would have to be paid back within 30 days...It keeps that gambler from having to carry large amount of cash with them if they’re inclined to bet large amounts of money.” [KRCU]
No further comment necessary.  Have a great day.

Sunday, October 05, 2014

How Orange County Got Involved: "The Governor Did the Region Designations."

One of the mysteries about this whole casino bidding process is exactly how Orange County got into the mix in the first place.  As you may recall - and as I originally detailed in this post - when the final version of the 2013 legislation was agreed upon that June, the governor's own press release included these quotes from the chairmen of the Assembly and Senate racing and wagering commissions which specified the Catskills as a region where a casino or two would be located:

Senator John Bonacic said, “For fifty years, the Catskills have sought gaming as a way to grow our tourism based economy. The gaming bill can create thousands of upstate jobs.."

Chair of the Racing and Wagering Committee and Assemblyman Gary Pretlow said, “Our agreement to bring casinos to the Catskills, the Southern Tier and the Capital Region is good for the local economy, the state economy and the people of New York."
So, we've been wondering what happened?  Recently attempting to explain, the Gaming Commission's Robert Williams told us that Orange is usually associated more with the region north of NYC rather than the city itself, and was therefore placed with the former.  It was a purely technical explanation, and didn't explain why the county had to be in one or the other.  I don't believe that the law actually requires that every county is to be considered for casinos.

Now, thanks to some sharp reporting by Nathan Mayberg in the Photo News, we have a far more logical explanation.
Pretlow said Cuomo and the Gaming Commission set the regions for where the casinos would go.

"The governor did the region designations," Pretlow said.

Pretlow said "Orange County was never in the mix" when he drafted the legislation.
State Sen. William J. Larkin Jr. (R-C-Cornwall-on-Hudson represents a district where five of the Orange County casinos have been proposed.  Larkin said that Cuomo "added on Orange County" into the 2013 casino legislation.

"None of us requested it," Larkin said. "It was his decision." [Photo News]
Well, that would clear that up; at least if you take these decidedly definitive declarations as the truth.  Not that this should come as any surprise. Attempts by the reporter to get a response from Cuomo's press office went unanswered.

Recall also that there was another mysterious change to the legislation at the very same time. The clause that would have prohibited the casino bidders from making campaign contributions to elected officials suddenly disappeared. "Some things we couldn't come to terms with,"the governor explained.  Apparently, the Senate Republicans had an issue with the clause.
“When you start trying to limit political contributions you run into constitutional problems,” Bonacic said on the Senate floor Friday night as the bill was being debated. [NY State of Politics]
You know....the same kind of "constitutional problems" that led to the Citizens United decision that has opened the floodgates on donations by corporations dedicated to electing or defeating specific candidates.  So, virtually concurrently, Orange County was opened up for casinos, and those backing the proposals became free to continue donating to the candidates of their choice.  How perfect! That allowed, for example, developer David Flaum, involved in Caesars' bid in Woodbury (and with the Hard Rock proposal in Rennselaer), and his wife Ilene to each personally donate $10,000 to Cuomo in December.  And for Genting, bidding for two casinos in Orange, to donate $10,000 to Senator Jeff Klein in June. Klein, by virtue of his IDC's coalition with the minority Senate Republicans, allowed them to be in the position to have the contributions clause removed in the first place, and he will quite possibly be the man who decides who controls the chamber in January.

 - The town of Tuxedo, where median household income hovers around $90,000 a year, is pleading "financial stress" to the Gaming Commission.
In a letter sent to the state Gaming Facility Location Board Tuesday, Supervisor Mike Rost said a sharp drop in the town's property tax base had led revenue to decline by 28 percent over the past three years. Last year, the town had to borrow to cover a deficit of $750,000, Rost said, and this year the shortfall is expected to be $800,000.

In addition, he wrote, the Tuxedo School District has had an operating deficit of $1 million for the past three years, making it possible that the local high school may shutter for lack of money. [Times Herald Record, limited free access]
We'd similarly seen how, in East Greenbush, the developers tried to play the same card before casino opponents made a convincing case to the board that the town's financial issues were due to fiscal mis-management on the part of the local government.  I can't say for sure why a town like Tuxedo would be having fiscal issues.  But the casino law was supposed to address regions that need economic relief for its residents, mainly in the form of jobs; not to bail out affluent towns with local governments that, for whatever reason, have budget issues.  (Though, ultimately, the state government is surely doing just that - using gambling revenues to help get its house in order.)

 - Speaking of East Greenbush, the developers of the proposed Capital View Casino & Resort are saying "me too!" following Governor Cuomo's pledge to increase the share of state contracts issued to MWBE vendors (Minority/Women-Owned Business Enterprises) to 30%.  It's a pathetically obvious and shallow act of butt-kissing both the governor and the location board (no doubt recalling that member William Thompson specifically lauded one of the bidders for mentioning their MWBE initiative during the oral presentations) by a development team which no doubt senses that its bid is in serious jeopardy due to the entrenched opposition to its project from the community.  (Or at least it should be in serious jeopardy if this is really a legitimate process rather than one whose outcome is politically predetermined.)

 - Speaking of desperation, the Greenetrack team, hoping to build at Stewart Airport (and seemingly one of the real underdogs), is now throwing in the promise of a new $13 million sports and aquatic center.  Wonder if we'll see similar little nuggets thrown in by other developers at this stage of the process.

 - The two Sullivan County proposals are on adjacent plots at the old Concord resort site; and I've been assuming that it would be one or another (if either).  One county legislator however thinks that more would be more, in this case.
“I think that’s a plus, not a minus,” [County Legislator Ira] Steingart said.  “I think that will generate more revenue for both of them, and in combination, will generate as much revenue for the state.” [Mid-Hudson News]
And I guess that's a little interesting if you think about it.  It would create a mini-casino center there, which was the original intent way back when, when Gov. Pataki was pushing for five casinos in the Catskills.  And the projects do complement each other in some ways: Adelaar is the more elaborate of the two proposals and includes the Monster golf course; while the Mohegan Sun proposal includes development elsewhere in the county (a revival of Grossinger's, and commercial development in Monticello).  Still, seems rather unlikely to me.

 - In closing, let's go back to the first article referenced in this post.  In addition to shedding light on how Orange County got involved, State Senator Larkin provides something to keep in mind when considering this process; the overriding factor that could make much of this - the logic, the speculation, the extra inducements, the pleading, the exaggerating - entirely moot.
Larkin said that Cuomo would have influence on the placement of the casinos. "Anybody who thinks he's not is a fool. It's his commission."

Friday, October 03, 2014

Let's Boot The Soccer Stadium

These soccer guys are freaking bugging me.  First they had the nerve to think that they were going to come here to Queens and drop a soccer stadium in the middle of Flushing Meadow Park.  Thankfull,y the community, along with green space and public park advocates, would have none of that.  Now, as first reported a few weeks ago, they want to build a stadium at the Big A.  And while those initial reports referred to locating it in a parking lot, it's not hard to guess what the possible ramifications are.

Several sources have confirmed that demolition of Aqueduct Race Track for a new soccer stadium is not off the table.
“The discussions leave open the possibility of the racetrack being torn down and the stadium being built on that site,” one high-level source said. “[The New York Racing Association] would make Belmont Racetrack a year-round venue and hold winter racing there.” [Queens Chronicle]
The article goes on to note that replacing the Big A is not the "most likely or preferred option," and then goes on to explain why it very well might be.  To build it in a parking lot would require navigating some bureaucratic red tape involving something called the Uniform Land Use Review Procedure, and anything that goes by the acronym ULURP just has to be trouble.  It also would require the approval of Queens Borough President Melinda Katz, elected to that post last year despite her involvement in some highly unsavory affairs (it's Queens, after all...but one Democrat who I surely didn't vote for); as well as by the NY City Council.  So there would be a lot of politics involved as well.  Besides, I'm just skeptical of the whole parking lot concept - if you're going to put the stadium there, where exactly are people going to park?

On the other hand, the state owns the land upon which Aqueduct sits, and the track's operator surely seems amenable to the idea.  With NYRA desperately (and quietly, as in the case of the extra $5 it now costs to get into Longshots....some more "transparency" for you) gouging its customers for every extra dollar it can in its drive towards the theoretical "profitable without slots" (a notion which, as I explained in this post, is really only a theoretical one indeed), we know that a consolidation of operations at Belmont is being quite seriously considered.  So, why not a soccer stadium?  Seems appropriate.  You'd be replacing one sport that nobody cares about with another one that nobody cares about.

[And please, don't give me the lecture about how many people watched the World Cup this past summer.  Every four years, we hear about how excitement over the occasional successes by the US team will carry over, but it just has not been the case.  Average attendance for MLS games are around 18,500, and that's actually down from 2012.  The TV rights were just acquired by ESPN and FOX for less than half of what is paid to the National Hockey League, hardly a national pastime itself. 

I get soccer.  I was all in on the Cosmos phenomenon back in the late 70's.  I went to a lot of games, and will never ever forget the experience; it was pure magic.  But that was a fleeting time that came, and went, and just as quickly.  It's odd to think back and wonder why/how it happened.  Maybe it was the outsize personalities of the likes of Pele and Chinaglia and Beckenbauer that helped to capture peoples' attention, at least in the case of the Cosmos.  Maybe now that it's easier to watch international stars on TV or online, it's less compelling when they play here.  Or maybe it was just some perfect and inexplicable confluence of events particular to that point in time.  Perhaps there is a brighter future for soccer as a spectator sport here (it's surely popular as a recreational one in parks such as Flushing Meadow, where many fields no doubt would have been eradicated by a stadium there), as evidenced by what I've read is a young fan base for the MLS, and for World Cup viewership (though I think I've been hearing that for years/decades as well).  But, for whatever reason, it's still a minor sport in this country; not going to speculate here as to the cultural reasons why that is.  But it is.  The NASL once filled the Meadowlands on a regular basis.  Now we're talking about a mere 20,000 seat stadium that nobody seems to want in their neighborhood.]

State Senator Joe Addabbo, who represents the district, has other ideas. “Should Aqueduct cease to exist at some point, my feeling and, I believe my constituents, would rather see the casino expand.”  Really?  Given how many people presently come to Resorts World on a daily basis - I've seen estimates in the 20 - 25,000 range - how many more people are really going to come if it converts from ra- to ca-sino?  And what exactly has this racino done for the surrounding community other than to spawn a slew of pawn shops?  A soccer stadium would at least draw a whole new set of people.  Which could be a problem in itself. 
Addabbo noted there are other issues to be tackled with the site in question, specifically if the city and Port Authority could negotiate a break in the lease and traffic management. Regarding the latter issue, he noted Woodhaven and Cross Bay boulevards—the main north-to-south artery through the area—is struggling with congestion and could not handle the additional vehicles that a soccer arena at Aqueduct might bring. [Times Newsweekly]
(Personally, I don't notice that on my trips to Aqueduct, but I'm not going there at peak times.)

And then we have those that say that a soccer stadium would do things that we were all told Resorts World would do. 
“A soccer stadium would create jobs, stimulate economic development and make Queens the city’s premier sports destination,” added City Council Member Eric Ulrich in a statement.
(Don't really think that the latter would be the case.)

The Queens Chronicle piece also brings up an issue that I've never heard mentioned in all of the talk about closing the Big A: the fact that the VLT law requires the racinos to be at a horse racing track.  Senator Addabbo says that he doesn't think "it’s contingent on the racetrack for the casino to operate.” I'm not sure what interpretation of the law he is leaning on.  But, in any event, they could always take a page out of the Gulfstream playbook and run a couple of 150-yard races down Rockaway Boulevard to technically qualify.

As far as Aqueduct goes, I've said many times here that the idea of year-round (minus Saratoga) racing at Belmont is a dismal prospect.  How monotonous would it be to see those oversized one-turn races month after month after month?  Horseplayers would lose the juice that results from the change in track configurations (just as they will lose the dirt-to-synth-to-dirt angles in Kentucky now that Keeneland has switched to dirt).  With the track's current configuration, the grandstand would be shrouded in frigid shade throughout the winter months.  There would obviously be some kind of renovation done in order to prepare the track for winter racing, the extent of which is unknown.  It would be far more palatable to me if a smaller winter oval was built separately, perhaps where the training track is now.  And personally, I wouldn't mind at all if they just razed the current courses in favor of a more traditional mile and an eighth main track so that there could be two-turn racing.  And that could give them enough room to put the damn soccer stadium there.

Thursday, October 02, 2014

Before or After the Election?

Governor Andrew Cuomo, making his first public appearance in Albany in 103 days, sparred with the press on Wedensday after a speech at the MWBE Forum (at which he proposed to raise the participation of businesses owned by Minority- and Women-Owned Business Enterprises in state contracting to 30%).  It went on for around 21 minutes, despite the efforts of an aide to cut it down to 'one more question' at around the four minute mark.  Yeah, fat chance that was happening.  The video is contained in this link.

At the 8:52 mark, the governor, looking quite relaxed after visiting Afghanistan in his continuing effort to keep us all safe, was asked if he expected the recommendations from the casino location board before Election Day. 

"I believe, Jimmy - I have to check - I believe we said in the State of the State when we first announced it, it would be towards the end of the year.  I don't remember exactly what I said in terms of timing, but I have no reason to change what we had set out originally."
  When again asked specifically if it would be before or after the election, Cuomo said:
"I just don't remember what we said the timing was.  Do you remember what we said the timing was?  [Before election day.]  Well, then that's what it should be."
For the record, this is what the governor said in the State of the State:
Our challenge now is to make casinos a reality, make it happen, make it happen fast and make it happen correctly...our current plan is March 2014 for the RFP to go out, bids come back in June and we hope to make the selections in early Fall.
Well, that really clears things up!  Fall started on Sept 22 and runs through 6:03 PM EST on Dec 21.  Since Election Day falls on November 4, I suppose it's up for interpretation as to whether that qualifies as early fall.  Robert Williams of the Gaming Commission said:
“They remain confident they can reach a decision in late October but have already indicated that if the volume of materials requires, they will take the time necessary to appropriately deliberate.” [Daily Freeman]
Hmm, that doesn't really help much either.  Given the sheer volume of that voluminous material, it's hard to imagine that these guys could make a reasoned decision within the next five weeks.  Unless their decision is going to be based on things other than reason; then the decisions could be announced tomorrow.  (And depending on the result, we may conclude that they might as well have been.)

I've said all along that I do not believe it is happening before the election.  As long as the result is up in the air, one would think that any anger directed at the governor could be muted due to the uncertainty.  Once it's announced, all emotions are at play...and I think they will be more likely to be negative than positive.  That's of course unless he.....I mean, the location board.....decides that a license (or licenses) should go to the Catskills rather than to Orange County.  Then I think we could see the decision prior to Nov 4, as Cuomo could benefit greatly in the polls in that region.

 - Like the Empire City Casino at Yonkers, Mitchell Etess, the CEO of Mohegan Sun, smarting from his defeat in Boston and hoping to build a casino at The Concord in the Catskills, wants us to know that he's not buying Genting's claim that a casino at Sterling Forest would not be detrimental to them.  "It’s not possible for anyone else to survive if there’s one in Orange County," he told the Crain's editorial board.  Etess says they won't build if there is any casino in Orange.  However, he wouldn't mind one 20 miles away at the Nevele.   "Gamblers like to have two places to go......They like to have an option."  As long as they are both located similarly distant to NYC, I suppose.  Currently doesn't seem too likely that the Catskills will get two licenses anyway.

Here's an excellent article from City and State, which considers all of the economic and political factors and comes up with some possible scenarios.  Including this one, which I have ranked as one of the more likely: 
That dynamic [Cuomo's original indication that at least one casino would be sited in the Catskills] could benefit the “northern” Orange County sites, including the Grand Hudson Resort & Casino proposed by Alabama-based Greenetrack at Stewart International Airport [unlikely -ed.]; the Hudson Valley Casino & Resort in Newburgh by Rush Street Gaming and Saratoga Casino and Raceway; and Resorts World Hudson Valley, Malaysian gambling giant Genting’s second proposal in the county. What sets apart these proposals—which range from $670 million to $1 billion—from the three southern Orange County bids, in terms of their relation to Sullivan and Ulster Counties, is their location some 20 miles north of Route 17—the main artery to the Catskills. Some analysts say this means that a northern Orange County casino could realistically co-exist with a Catskills casino, while one in the southern part of the county could effectively block New York City-area gamblers from visiting Ulster or Sullivan counties.
Empire Resorts is the only one of the three Catskills bidders who have said that they would build (the Montreign or Adelaar or the whatever-they're-calling-it casino at The Concord) even if there was a casino in northern Orange; albeit a smaller one that their grand proposal.  (A smaller facility there might be more appropriate than what they are proposing as their best-case scenario in any case, as the article suggests.) 

So, how about this: a license goes to the Hudson Valley project in Newburgh, and to Adelaar.  That would check a lot of boxes.  The Catskills would finally get their casino.  Jimmy Feathers would get his.  Genting would not (Cuomo is probably not too enamored of them anyway), but its chairman does have an interest in the majority shareholder in Empire.  Gural could get his at Tioga, Hard Rock or Howe Caverns would get the Capital District license (Rush Street, bidding in Schenectady, is Feathers' partner at Hudson Valley), and a lot of people would be happy.  Except for the losing bidders and the gamblers who end up losing their money.

 - As we mentioned, and as you probably know, Cuomo was in Afghanistan pretending to be "learning" about terrorism in a place where he didn't have to deal with those annoying reporters for 21 minutes despite his aide's futile attempts to get him away.  Bill Hammond wrote a piercingly astute column in the Daily News about the governor's sudden interest in security.  (During the gaggle, Cuomo made what was apparently a clumsy attempt to disparage the piece, saying that 'the Daily News says that we don't need security.' Which is not what Hammond said.  He said that we don't need politicians who take a sudden interest in the topic, not mentioned in any of Cuomo's State of the State addresses, five weeks before Election Day.)  The column featured this photo.


Liz O'Connell had tweeted me earlier that Cuomo's trip reminded her of Michael Dukakis.  I wasn't sure exactly what she was referring to until I noticed that picture.  Remember this?

Not surprisingly, the Astorino campaign tweeted out the photos side by side.  If I recall correctly, that picture didn't work out so well for the former governor of Massachussets.

Seems odd that, as astute as Cuomo and his aides are said to be, they violated the golden rule that governors with no foreign policy chops should not be photographed in a chopper, or a tank.  Though at least Cuomo dispensed with the helmet, if not with the goofy smile.

When pressed by reporters as to whether he would work for a Democratic State Senate, as he pledged to do in his deal to get the Working Families Party ballot line, Cuomo was once again evasive.  "Yes.  But running on my record doesn't hurt them.  Because my record is their record.  If you're a Senate Democrat running for re-election, what do you say? Unemployment down, credit rating up, more jobs than ever before, four budgets on time, marriage equality.  That's my record too.  Right?"  Right. But that doesn't answer the question of what he will, or will not, do to uphold his promise to the WFP.  There are Democrats running for seats that are open or currently occupied by Republicans.  And indeed, when asked if he would endorse the incumbent Republican Senator Mark Grisanti (running on the Independence Party line after losing his primary), who voted for same-sex marriage but staunchly opposes key aspects of his agenda such as the Women's Equality Act and the Dream Act, he demurred.  "I haven't made a decision yet."  That's one decision he'll have to make before Election Day.

Tuesday, September 30, 2014

Bonus? What Bonus?

I was looking at the Meeting Book for Monday's hastily-called NYRA Board of Directors meeting (it wasn't announced until Friday afternoon), and I noticed a pretty hilarious omission from the minutes for the last meeting, held on August 6 in Saratoga.  As you may recall, the big news coming out of that meeting - other than the attempt to bar reporters who didn't RSVP - was the $250,000 bonus granted to CEO Chris announcement which brought a mixed reaction at best.

However, you would never know that from reading the minutes of that meeting.

    2. Report of the Chair.

Mr. Wait welcomed new Board member, Mr. Holliday, who serves as Chief Executive Officer of SL Green Realty Corp to replace Ms. Rosenthal, who resigned earlier this year. Next, Mr. Wait highlighted the recent accomplishments of NYRA including the addition of new members to the NYRA senior management team, improvements in the backstretch area, payment of outstanding debts and advances in equine safety. Then, Mr. Wait recognized the senior management team and employees led by Mr. Kay for all their hard work.


b. Compensation Committee

Mr. Tese gave the report of the Compensation Committee, particularly its input on the CEO’s performance and compensation. Mr. Tese and the rest of the Committee congratulated Mr. Kay on all his achievements in creating a strong management team, transparency and enhancing the guest experience.
Yes, they recognized and congratulated Mr. Kay.  But there's no indication whatsoever that he was granted a bonus....just a small detail gone unmentioned!  I looked at the Open Meetings law, and the minutes are only legally required to mention items that are voted on by the board.  So it would seem that they are not in violation of the letter of the law, but I'd say that it surely is contrary to its spirit.  One might think that this was written by Communications Director John Durso, Jr.  I didn't know that board meeting minutes were subject to PR BS, at which Mr. Durso is quite proficient - but I guess I was wrong.

It's particularly funny that Tese glossed over the bonus while also congratulating Mr. Kay on promoting transparency!  Seems to me that NYRA has instead become increasingly insular and paranoid over the last year.  The most recent example of that is the sudden embargo on announcing Belmont attendance figures.  Maybe they didn't want to be forced to announce a disappointing crowd on Super Saturday.  (And, given their secrecy and deception when it comes to attendance nowadays, I have every right to make my own assumption that it was indeed doubt they'd be crowing if there were 25,000 people there.  I was not there myself, so I cannot venture a guess.)  Towards the end of the meeting, Chris Kay started to talk about how Churchill Downs doesn't announce attendance figures, and then seemed to catch himself and abruptly broke off.

Otherwise, I'd have to agree with Tom Noonan's assessment of the meeting; it was largely a bore.  Once again, Chris Kay got to drone on about all of the new TVs at Saratoga.  He laughingly reported that attendance there was up by 12% over last year, of course without mentioning that they counted season pass holders who weren't actually on track.  He talked about the year-over-year comparisons, and how the numbers were hurt by 16 more races coming off the grass than last year (which the Form's David Grening says is simply untrue).  And he talked extensively about how the "quality" of racing had improved at the Spa over recent years.  We heard that word tossed around without context, and I'm not sure exactly what that assessment is based on.  I, for one, would not agree.

It was a bit interesting listening to some of the breakdowns of the revenue numbers.  Of the $7.8 million increase in operating revenue through the first eight months of the year, just $1.2 million came from net wagering.  $1.7 million was from increased admission fees, $1.2 million for seat sales; pricing of both of those have been raised.  Money from sponsorships was up by $864,000, food sales by $834,000; there was $1 million in new revenue from the source fee on out-of-state ADW's.

NYRA says they still are on track to show a profit separate from VLT money for 2014.  But again, keep in mind that slots money is used to inflate purses: some $40 million in VLT purse money was distributed through Aug 31.  Without that money, NYRA would not be able to offer the purses that, in theory, help to generate increased betting revenue due to the larger fields that they attract.  And Resorts World has provided $21.5 million in VLT-fueled capital improvements this year.  Without that, NYRA would be unable to make crucial infrastructure repairs and basic improvements (such as the Saratoga TV's); nor the other 'guest enhancements' that allows it to justify all of those price increases that are so integral to their improved performance.  So, it's one thing to show a profit on a piece of paper....and it would be an excellent start in the quest to be independent of the insidious slot machines.  However, the notion that this would mean that NYRA would still be profitable if Resorts World burned down to the ground tomorrow is simply not something we can assume would be the case.

Chris Kay also hinted at further ticket and seat price increases for the Belmont Stakes, saying that they would look at the Derby, Preakness, and Breeders' Cup as points of comparison.  The problem with that is this: the Derby and the Breeders' Cup stand on its own; the Preakness is always of keen interest unless the Derby winner doesn't run.  The Belmont is very much dependent on the outcomes of the prior two Triple Crown races.  This year, it was a boom.  Next year, it could be a bust.  And while Kay pointed out that seating sold out prior to the Preakness last year, a whole bunch of other people who showed up in 2014 could be priced out of a non-Triple Crown event in 2015....and I don't care how many other Grade 1 stakes the day is stacked with.

More on the board meeting can be found here and here.

Board Member Doubly Confused

Been meaning to mention something that I heard during the public comment hearings last week. Honestly didn't have a chance to watch most of the three days, but happened to catch this: A speaker who expressed revulsion towards casino gambling in general drew a rebuke from a member of the location board. I think I know who the speaker was, but they were all off-camera, so I won't venture a guess as to who he (which certainly gives away nothing) was. Anyway, the location board member pointed out that the question of whether or not there should be casinos is not the question here. That has already been decided, he pointed out, with the measure being approved twice by the voters, and once by the legislature.

Of course, he had that backwards. The legislature has to pass a constitutional amendment twice, after which it goes before the voters, once. I don't think that's a small point. For one thing, c'mon man, these guys should know that! This board seems to be earnest, but from time to time they have displayed befuddlement or ignorance of basic points. I don't really feel as if they have dived into all of the background and facts as much as they should have. Another example of that is the fact that they had to be told by an East Greenbush opponent to go and visit the site. Really, they should have already made inspections of all of the proposed sites, if they were really doing this right. Instead of cramming the three public comment sessions into three days, they could have taken a day (or two in the case of the Hudson Valley region) to go check them out....and maybe chat with residential and business neighbors-to-be who maybe couldn't travel to Albany or Ithaca or Poughkeepsie to state their case, for or against.

Anyone who truly believes that the voters approved this thing twice is giving more weight to the idea that the people are for this than is warranted by the one vote based on biased ballot language, and carried in part by support in areas not immediately affected, like NYC. And it's also interesting to consider what would have happened if indeed the voters needed to approve this twice and the second vote was set for November. Assuming that the ballot language would be stripped of advocacy, now that good government groups are hip to that scam, and considering all of the much-publicized bankruptcies in Atlantic City (as well as the declines in the racino business in the state), I would think that a decently-funded opposition campaign would have had a decent chance of success, don't you?


Sunday, September 28, 2014

Yonkers Ain't Buyin' It

Empire City Casino at Yonkers Raceway is having none of the talk from Genting that a casino in Tuxedo won't hurt them.

"The revenue from this single property is nearly $300 million a year just for education and we employ nearly 1,400 residents, most of whom are from Westchester, so it puts at risk not only the revenues that are generated by one of the most successful casinos in the state but also would ultimately mean layoffs as well," Duffy told the Journal News. [Politics on the Hudson]

Yonkers, of course, is quick to play the jobs card here. As we mentioned in the prior post, Genting CFO Christian Goode is saying that a Sterling Forest casino would not hurt Yonkers because gamblers there (and at Resorts World) are largely those with just $60-$80 to spend, and they won't cut into that budget by traveling. Before we go on, that brings up a couple of points: That makes perfect sense given my visual observations of customers at Aqueduct; that as opposed to those photos of affluent-looking young folks that you see on racino websites. And, at the risk of sounding presumptuous, it seems unfortunate that those with a limited amount of disposable income choose to dispose of it by sitting in front of a zombie-inducing machine that is eventually going to take most or all of it. (And even more distressing that this is now an accepted way of balancing state budgets and subsidizing horse racing.)

Yonkers will tell you that they've lost 15% of their business since Resorts World opened at the Big A. Net win figures I've seen are more like 11%.....but let's go with their figure. That is business lost to a racino located 24 miles away....and one which has aggressively provided free busing from areas in and around the city. (Their big ugly red buses have become quite ubiquitous around town.) So, how much more business would they lose to a full-blown casino located some 40 miles away? And one which has made it clear that they are more interested in big-money baccarat players from around the globe than small-time slots players? And where blackjack tables will have $25-$50 minimums? (In a recent interview, Yonkers GM Bob Galterio broke down their customer base as such: 15% NJ, 7% CT, 30% Westchester, 20% Bronx, the rest from the other boroughs and Long Island.)

So how much business would they really lose to Sterling Forest? Or, to a casino in Woodbury or thereabouts? I'm not going to guess. What I think we can surmise however is that, eventually, as these things proliferate here in NY and in NJ and in Massachusetts (perhaps), each will, for the most part, serve a local customer base. Beyond that, whether any of them can really draw customers from around the region, based on amenities such as golf or water parks or spectacular views, remains to be seen. (For this purpose, let's exclude Genting's grander scheme of flying in customers from Beijing.) With all the talk about the proposals being considered, this whole idea of a "casino resort" in rural areas of NYS attracting families is a totally unproven business model. We do know that the business model of resorts without the casinos in the Catskills was a failure. Whether Mom and Dad will really bring the kids so they can slip off and play casino games surely remains to be seen. I found it quite surprising that only once did any of the board members question the concept during the oral presentations....and that question was posed to Howe Caverns, which actually does have a track record of attracting tourists from beyond their immediate area.

- Noting that his location board heard from 415 citizens during the three days of hearings, and received around 3,000 written comments, chairperson Kevin Laws says that this is "true democracy in action, hearing directly from hundreds of individuals who feel very strongly about the future of their communities." Of course, true democracy requires the participation of both sides. It's one thing for the people to speak. Those making the decisons have to also truly listen. We'll reserve judgment for now.

Friday, September 26, 2014

Friday Casino News and Notes

Traveling for a few days, so I'm a bit behind....but here's a good recap of the third and final day of the public comment hearings; this one for the three Southern Tier applicants, which took place in Ithaca on Wednesday. Opposition seemed scarce for the Traditions project near Binghampton (a reference to a "small grassroots group") and Tioga Downs - just one opponent out of around 20 speakers.

That Tioga speaker noted that "Everything there seems to be less," and that could be a concern for Gural. Remember, the board got him to admit under questioning that only 900 of the 1200 job number would be new positions. So Tioga surely lags in that area as compared to the other two....though Gural's political connections may very well render that moot. I don't think that Gural would have built a new parking garage if he didn't think he has this in the bag.

The Casino Free Tyre group was out in force to make their case against the Lago Resort and Casino proposed for their little town. However, Wilmorite was able to rouse 33 people to speak in support of that project....a stark difference to Capital View in East Greenbush, who didn't even try, for whatever reason to bring supporters, perhaps, as this reader suggested, because they don't have to. Still, when the location board members look back fondly on their three day marathon, I would think that the three groups who spoke out forcefully - those in East Greenbush, Tuxedo, and Tyre will stand out from the others and leave a significant impression. Unless of course the political outweighs the practical; and in the case of Tuxedo, the sheer scale of the Sterling Forest proposal dwarfs all of the other factors....both those pertaining specifically to this project, or with respect to the whole question of Orange County vs the Catskills, and what the real priorities of the casino law is as interpreted by this board.


Genting CFO Christian Goode poo-pooed the notion that Sterling Resort would significantly hurt Yonkers. He called racino customers "convenience gamblers" with a modest budget.

"When you start thinking about that, if somebody's got $60 or $80 to spend, you can easily assume today with gas prices and tolls, that you're going to take 25 percent of their spending power. We don't think that person's going to go up here," he said. [Journal News]

(That's why I think that the cannibalization of Saratoga harness may not be as bad as people are saying.) And speaking of poo-poo, that's been the attitude by Genting all along to the ruling by the Palisades Insterstate Park Commission that they can't build a new Thruway exit there.

Goode said the commission "acted prematurely," and the state Thruway Authority would control whether an exit were built. Having the exit is central to the casino project, and Genting is confident it would be built, he said.

Maybe they know something that we don't.

- A minority owner of Vernon Downs, which is also majority-owned by Gural, says that a casino in Tyre would hurt his racetrack-racino, "putting its entire existence into question."

Tyre is closer to Syracuse than either Tioga Downs or the town of Glen. Greenberg says Gural wouldn’t have supported the state approving commercial casinos last year had he known then there would be a competitor as close as Tyre. [Daily Sentinel]

Well, I think he probably would have anyway.. And it may not be as bad as he is saying, at least according to the Genting theory explained above.

- Republican Attorney General candidate John Cahill says that he will use that office's organized crime task force to vet the casino applicants should he be elected.

"These are sophisticated deals, potentially involving offshore investments, foreign players and incredible sums of money," Cahill said. "The organized crime task force has the expertise and the personnel to make sure New Yorkers are safeguarded from fraud, crime or even terrorist activities." [Albany Times Union]

As we've mentioned, we haven't seen that level of scrutiny, as there was in Massachussetts....enough to dq Caesars there because of an alleged tie to an alleged mobster. The location board is required to use the State Police to investigate, which I imagine will only take them so far. However, Cahill would take office on Jan 1 should he upset incumbent Eric Schneiderman. That might be too late. After the location board announces its recommendations, it's up to the Gaming Commission to actually award the licenses. You can bet that, should Cahill win, the governor will see to it that the job is done before New Year's Day.