“Poison pill” in Upstate Gaming Act of 2013

5329333422_f79c211100_m alien            Surrender ! Resistance is futile !

The upcoming referendum on whether to amend the NYS constitution and allow “up to seven casinos as prescribed by the legislature” has been subverted by  Governor Cuomo, turned into  an  ultimatum  to all who oppose the  amendment for its expansion of  predatory gambling.  ” Heads I win, tails you lose.”    New Yorkers, even those who favor the amendment,  should be  horrified.  This behavior  belongs to a despot or a cartoon  alien invading the planet, not to a Governor who proclaimed he wants  the people to say yes or no to amending the constitution.  What  happened ?  

Simply put, if the amendment fails, Lottery gets carte blanche to expand instead.   The “Upstate New York Gaming Economic Development Act of 2013,”  passed on 21 June as S 5883 (same as  A 8101), provides in section 32 a. (3)  that if the amendment does not pass referendum, Lottery is authorized to operate  an unspecified number of new Video Lottery Terminal (VLT)   facilities of unspecified size,  not necessarily at race tracks.  The VLT facilities provided for in this  hedge plan would go into the three “regions” of “zone 2” that are not excluded by compacts with Indians, viz. Catskills + Hudson Valley,   Eastern Southern Tier and  Capital Region.  An article originating with AP in Albany  http://online.wsj.com/article/APbabc9a4fefdc488cb8a30eb9ec800e12.html    cites possible numbers (three or four upstate) and possible sizes (up to five thousand VLTs each).  These numbers are not in the bill, but were softly confirmed by a spokesperson for the Governor on June 19. 

Thus a successful  fight against  the amendment would be punished by the imposition of a gambling system probably no better  for New York’s people than  “up to seven” casinos.  [There is no reason to think Lottery would stop at four new slot barns; that was a trial balloon on one day in June.]

The hedge plan unveiled in June was probably  mostly  a “poison pill” for two readily identifiable groups to which  the amendment could bring damaging competition.  One was the Seneca Nation, which as of June 12 was  not yet  “in good standing.”  The next day, however,  the Nation  moved into that status. http://www.indianz.com/IndianGaming/2013/026500.asp    Now assured of no new competition in their territory,  they would cease to  threaten  the amendment.  The  pill was no longer toxic to them.  The other group, the  New York Gaming Association (the racino lobby)   had come out on June 10th  against the Governor’s Program Bill, as it was then called.  [To see that press release, which on the web site is undated,  go to their web site and click on press releases .  http://www.newyorkgaming.org/Home.aspx    ]  NYGA  voiced fears that new casinos would take away 85% of their action.  They  were quickly placated with changes ensuring that the horse industry would not take a loss in  the large (> $200 million last year) income stream it counts  on from racino  VLTs.   Any new casinos  would have to pitch in to keep parity.  Not long before June 21, the NYGA reversed its stand in a second press release [also on their web site, undated].

The “poison pill,”  in Section 32 was made by developments around mid-June less baneful  to the two richest groups that want predatory gambling in NYS but not competition.  It still  had   had potency as of voting day, June 21.  It could  deter opposition to the  amendment  that might spring up if any of the May-June agreements with Indian casino operators fell through before Election Day.  On out-of-state casino interests, however, it would probably have little effect.    Though expected by many to work [under false flags]  against the amendment, these groups  would would not see section 32 as virulent to them.   They  would surely prefer that if NYS must  boost its  predatory gambling it go with slot barns, not  full-scale casinos. 

The constituency to which the poison pill is most bitter and potentially paralyzing is opponents of predatory gambling.  We are perhaps collateral casualties of the Governor’s tactics  to neutralize, or actually turn,  rich profit-seeking opponents of the amendment . Or (this may be  folie de grandeur)  the Governor  sees us as a threat to his objective, a threat that needs to be squashed.   We don’t need to know.   In either case,  the Governor and those who craft his bills  have done  their utmost to make the referendum meaningless.      Instead of a plebiscite on whether to amend the constitution it has become a double bind: casinos or  VLT barns.    See the New York Post http://www.nypost.com/p/news/opinion/editorials/gambling_man_FRWmSBGiGVE5KXK1w58IcM

The  VLT  barn  hedge plan has been latent since September  2001, when the legislature  at the urging of Gov. Pataki  authorized   thousands of  VLTs  at racetracks as  “racinos.”  In the words of Gov. Cuomo (May 9 press conference)  “The racinos were created to get around,  frankly, the existing state law and they were in many ways created as a loophole, but for all intents and purposes they are a casino.”     Why VLT proliferation was not Gov. Cuomo’s plan  A  for gambling expansion is for speculation.  Let’s suppose that in early 2012 he truly  believed  (unlike us) that casinos bring “economic development”  that VLT barns would not.  Let’s credit him with a desire to play by the rules and respect the Constitution,  as long as he looks like winning. This wish foundered in June 2013 when polls showed his approval rating going down and no clear margin of victory for a future amendment.   Time for the ace in the hole.  

Coalition Against Gambling in New York will oppose the amendment even if the hedge plan in section 32  forces  an odious alternative to casinos.  If the amendment fails as it deserves to, we and other groups allied against predatory gambling will seek legislation  to amend  section 32 and defang it.

The opinions expressed herein are those of the writer, Stephen Q. Shafer and do not necessarily reflect opinions of all members of CAGNY.  Permission  is granted to reproduce this text in whole or part as long as the permalink attached is cited.