OTB Flying Under the Radar

OK, I live in Albany.  And I keep an eye out for Gambling issues in the news.

So, how come this story does not come to light until 4 days later in The Daily Racing Form?  Granted the DRF cares about this stuff, but how come the NY Times, the Post, and the Daily News missed this?

As you may or may not know, NYC Off Track Betting filed Bankruptcy a couple of years ago.  The question then was:  How can a gambling organization with a near monopoly in New York City go broke?

And,:  How does the Catskill OTB get into New York City.  Forget the Mayor's legitimate concerns, how did this end run take place and that the press have missed it completely?

Anyway.............................

The New York Assembly and Senate passed a bill just before adjourning Thursday night that will allow Catskill Off-Track Betting Corporation to operate 10 betting parlors in New York City, but it is unclear if Gov. Andrew Cuomo will allow the bill to become law.

If approved, the bill would re-open New York’s five boroughs to offtrack betting less than two years after the New York City Off-Track Betting Corporation went bankrupt, taking 1,000 largely union jobs with it. The bankruptcy resulted in the shuttering of 55 locations in which bettors could place horse racing wagers.

If approved, the bill would re-open New York’s five boroughs to offtrack betting less than two years after the New York City Off-Track Betting Corporation went bankrupt, taking 1,000 largely union jobs with it. The bankruptcy resulted in the shuttering of 55 locations in which bettors could place horse racing wagers.

Rich Azzopardi, a spokesman for Cuomo, said Friday morning that Cuomo would need to review the bill before deciding whether to sign it.

 “This wasn’t part of a three-way agreement,” Azzopardi said, in reference to the unanimity between the governor’s office and two legislative houses that many times precedes passage of bills in New York.

 If Cuomo decides to sign the bill, he would risk upsetting New York City Mayor Michael Bloomberg, whose administration has expressed concerns about re-opening the city to offtrack betting without major changes to state law. New York City OTB largely failed because of an outdated business model that relied far too heavily on bricks-and-mortar locations, and it was further burdened by enormous labor costs.

 In addition, Cuomo has said that he wants to include OTB operations in a “major overhaul” of New York’s gambling policy. Giving Catskill the right to re-open OTBs in New York City in advance of the administration’s development of a formal policy for the state would undercut the process.

http://www.drf.com/news/ny-legislature-passes-bill-allowing-catskill-otb-operate-new-york-city

RWB Injunction Lawsuit Against Shinnecock Tribe Thrown Out

Today, In a two to one ruling, the Second Circuit Court of Appeals, the Federal Appeals Court covering New York State, Reversed the Decision of the US District Court which had granted an Injunction in favor of the State of New York and against the Shinnecock Indian Tribe of Eastern Long Island prohibiting the Tribe from opening a Casino.  The decision was on procedural grounds and does not create a right for the Tribe to open a Casino.

A full copy of the Decision can be found here. 

http://www.ca2.uscourts.gov/decisions/isysquery/63452fed-1cf6-4063-aece-b6c84e0047dc/2/doc/08-1194_complete_opn.pdf#xml=http://www.ca2.uscourts.gov/decisions/isysquery/63452fed-1cf6-4063-aece-b6c84e0047dc/2/hilite/

The Court ruled that:

the district court lacked subject matter jurisdiction over this action, and thus do not reach the merits of this appeal.

The Court then sent the case back to the Federal District Court with instructions to transmit the case to State Court. The Decision does not clear the path for the Tribe to open a casino, but merely serves as a impediment.

However, since this lawsuit began, the Shinnecock Tribe has become a federally recognized Indian Tribe.  The State may have problems proceeding with a lawsuit now that the Tribe will enjoy a federally recognized Sovereign Immunity.

The details of the decision will probably only interest those of us who enjoy a good romp through Federal Court Civil Procedure.  For the rest of you, the case got thrown out because the Federal Court does not entertain all lawsuits.  Here, the Court was looking for issues of Federal law and could not find them.  Thus, the suit got tossed and will be referred to State Court.

The district court had ruled in favor of the State and the Town and granted a permanent injunction prohibiting the Shinnecock from building a casino on Westwoods without complying with state and local law. New York v. Shinnecock Indian Nation, 523 F. Supp. 2d 185 (E.D.N.Y. 2007); see also New York v. Shinnecock Indian Nation, 560 F. Supp. 2d

The Appeals Court ruled that the State and Town had allege only violations of state and local law in their complaints. The State alleges that the Tribe’s construction of the casino would violate state gaming and environmental laws and the Town alleges that it would violate local zoning and wetlands protection ordinances. Although the State’s complaint refers to federal law, these references assert only that federal law does not immunize the Shinnecock’s conduct and thus cannot provide a defense against the Tribe’s violation of state and local law.

NYRA Bill Passes in NYS Legislature

The New York State Assembly Wednesday gave final passage to a bill creating a new 17-member state government-dominated board to oversee the non-profit operator of New York's three thoroughbred tracks: Belmont, Aqueduct and Saratoga.

 The new panel will replace the current 25-member New York Racing Association, which is made up of industry insiders, for up to three years.

 Under the bill, Gov. Cuomo will have eight appointments and get to name the chairman. Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos will have to picks each while the New York Racing Association will have five selections.

 The breeders and horsemen associations will have two non-voting members to advise on various issues.

The bill now goes to Gov. Cuomo for his signature.

http://www.nydailynews.com/sports/more-sports/gov-cuomo-officially-takes-reins-york-struggling-horse-racing-industry-article-1.1099276#ixzz1yS0BqORY

A copy of the bill can be found here:  http://www.governor.ny.gov/assets/documents/GPB45NYRABILL.pdf

Governor’s Memorandum in Support:

http://www.governor.ny.gov/assets/documents/GPB45NYRAMEMO.pdf

According to pending New York State legislation, representatives from the New York Thoroughbred Horsemen's Association and New York Thoroughbred Breeders, Inc. will participate on the New York Racing Association's (NYRA) newly configured board of directors as non-voting "ex-officio members to advise on critical economic and equine health concerns of the racing industry, one appointed by the New York Thoroughbred Breeders Inc. (NYTB), and one appointed by the New York Thoroughbred Horsemen's Association (NYTHA)."

The revocation of racing industry stakeholder voting privileges is just one aspect of the NYRA reorganization under The New York State Racing Franchise Accountability and Transparency Act of 2012. The newly configured executive board, the Reorganization Board, will sit for three years. With 17 voting members the board is smaller in size (down from 25 members), and its make-up skewed towards government rather than racing industry control. The 17-member board will be composed of eight members appointed by the governor, two each by the Assembly Speaker and Senate Temporary President, and five by the current NYRA board. By the end of three years, the Reorganization Board is charged to produce a plan to transition NYRA to private control as a not-for-profit corporation.

The legislation maintains that the temporary reorganization board shall be under public control to ensure The New York Racing Association, Inc. works in the best interest of all stakeholders in horse racing including fans, owners and breeders by managing the state racing franchise with transparency and accountability.

http://www.huffingtonpost.com/liz-o/new-york-horsemen-and-bre_b_1608464.html

Adquaduct Casino Drawing Enormous Income from Slots!

The Resorts World Casino at Aqueduct earned the top spot in the country for slot machine revenues last month, hauling in a whopping $57.5 million, according to state gambling data.
The Queens racino's income in May even surpassed that of Connecticut's Mohegan Sun Casino, which pulled in $55.4 million during the same period, the Daily News reports.
"New York City gamblers have long filled their gambling desires in Atlantic City and Connecticut," Joseph Weinert, senior vice president of Spectrum Gaming Group, a consulting firm, told the News. "Now they have someplace right in their backyard, and they are going there in droves."


Read more: http://www.dnainfo.com/new-york/20120619/ozone-park/aqueduct-racino-pulled-most-slot-machine-cash-us#ixzz1yLJ9oxXQ

NYRA. WELL I GUESS WE SAW THIS COMING

On May 4, 2012, the New York Racing Association fired President Charles Hayward following revelations he may have known the racing group was violating state law by not lowering pari-mutuel takeout rates on exotic wagers.

 Also let go was Patrick Kehoe, NYRA's senior vice president and counsel.

The termination of Hayward and Kehoe came May 4, the same day the NYRA board was to provide its response to state regulators looking into the matter. The state Inspector General's office launched an investigation into the matter that could result in civil or criminal sanctions.

 "C. Steven Duncker, the chairman of NYRA's board of directors, stated that the board's decision was based on a determination that these executives failed to perform their duties at a level required by the board," NYRA said in a brief written statement. "Mr. Duncker noted that there are ongoing governmental inquirings relating to the circumstances surrounding the takeout issue, that NYRA was cooperating with these inquiries, and that NYRA expects that those inquiries will thoroughly and fairly investigate the matter."

Hayward and Kehoe were both named in a recent interim report by the New York State Racing and Wagering Board as having possible knowledge that NYRA illegally maintained a 26% takeout level for 15 months after expiration of a state law. The takeout was not lowered until last December to its proper 25% level.

http://espn.go.com/horse-racing/story/_/id/7891818/nyra-fires-hayward-kehoe-amid-probe

Then on May 14^th, the administration of Gov. Andrew M. Cuomo asked Tuesday that payments from the casino at Aqueduct racetrack to the New York Racing Association, which runs the track, be suspended immediately. It also said it was exploring revoking the association’s racing franchise.

“Unless NYRA immediately starts to act in the best interests of racing and the taxpayers of this state, we will pursue a course of action to re-establish the racing franchise with a qualified, ethical, and responsible steward of horse racing,” a letter sent to NYRA’s chairman, Steven Duncker, stated. It was signed by John Sabini, the chairman of the New York State Racing and Wagering Board, and Robert Megna, the chairman of a NYRA oversight panel.

http://www.nytimes.com/2012/05/16/sports/new-york-racing-association-is-facing-loss-of-payments.html

Finally, Governor Cuomo takes control of the NYRA Board, relieving us of unwanted and unneeded drama from NYRA this season.

Governor Andrew M. Cuomo, Senate Majority Leader Dean Skelos, Assembly Speaker Sheldon Silver, and the New York Racing Association (NYRA) on Tuesday announced an agreement to establish the NYRA Reorganization Board that will place NYRA under temporary public control in order to reform the association and transform oversight and management of horse racing in New York State.

And the NYRA board wisely agrees: "I want to express my appreciation to the Governor for his commitment to a world class horse racing industry in New York," NYRA Board Chair Steven Duncker said. "The NYRA Reorganization Board will help ensure that racing in New York has a strong and stable future as the gaming and racing industry evolves. I thank the members of the current NYRA Board for supporting the changes announced today and together we will work to ensure a smooth transition and bright future for New York racing."

"The New York Racing Association today announced the reconfiguration of their Board of Directors. We are excited we have a Governor who has announced he will champion our industry," NYRA Board Member and New York Thoroughbred Horsemen's Association President Rick Violette Jr. said. "New York's Thoroughbred horsemen are willing to work hand in hand with the new Board and the Governor's office to ensure we have a robust industry that continues to provide the very best racing in the country."

The NYRA Reorganization Board will be comprised of a majority of publicly appointed directors, with a Chair nominated by the Governor. The Board will be in effect for three years to restructure and reorganize NYRA, following which NYRA will revert back to majority private control. The current NYRA Board will be dissolved. The NYRA Reorganization Board will go into effect when a majority of the new public directors are appointed. Once appointed, the new board will conduct a national search for a new CEO and General Counsel for NYRA.

The NYRA Reorganization Board will consist of 17 directors. Seven will be appointed by the Governor. The Senate and Assembly will appoint two directors each and five directors will be selected by the current NYRA Board. Breeders and Horsemen will each have an ex officio member. Additionally, a chairperson will be nominated by the Governor subject to Board approval. The current board is 25 directors, with 14 elected by NYRA and 11 appointed by public officials.

http://www.brisnet.com/cgi-bin/editorial/news/article.cgi?id=28965

See also, http://www.nytimes.com/2012/05/23/sports/state-seizes-control-of-new-york-racing-association.html

http://online.wsj.com/article/SB10001424052702303610504577420713296641358.html

And the takeover is received well in almost all quarters.

http://hudsonvalley.ynn.com/content/top_stories/585456/racing-community-optimistic-about-nyra-takeover/

http://www.saratoga.com/whatsnew/2012/05/nyra-reorganizes.html

http://articles.nydailynews.com/2012-05-24/news/31842418_1_nyra-board-cuomo-new-york-racing-association

http://www.examiner.com/article/nyra-turns-the-page

In early 2010, New York Racing Association officials stopped cooperating with the court-approved integrity counsel charged with making sure horse racing in the state was clean. By that July, the racing association had abandoned the use of prerace detention barns, a basic element of its efforts to prevent the doping of horses running at its racetracks.

Then, in February 2011, the counsel asked to meet with the racing association’s vice chairman and members of its oversight committee about two continuing investigations. Not only did it not get the meeting, but the firm was also fired by telephone two weeks later.

Now, with the racing association again under fire and being investigated for a fresh set of misdeeds and inaction, the counsel says it wants to give state investigators the 2011 corruption report it had prepared, but that was dismissed by the association. NYRA has refused to allow the counsel to turn it over, invoking client-attorney privilege.

http://www.nytimes.com/2012/05/25/sports/counsel-for-nyra-wants-to-release-its-2011-corruption-report.html?_r=1

The New York Racing and Wagering Board, which oversees horse racing in the state, has limited the size of the purses offered in races involving cheaper horses. It acknowledged that fattened purses, many of them being offered at racetracks where casinos had been opened in recent years, had created a dangerous incentive to push sore or unfit horses onto the track.

The agency said racetracks could not offer purses greater than twice the assigned value of the horses running in any claiming races, the less glamorous races that make up the backbone of the daily programs at many tracks.

http://www.nytimes.com/2012/05/01/sports/new-york-cuts-race-purses-to-protect-horse-safety.html

Cuomo and legislative leaders reached agreement Saturday on a bill for a temporary state government takeover of the New York Racing Association.

The bill, introduced Saturday night, calls for the creation of a 17-member board to oversee the state’s three Thoroughbred tracks: Aqueduct, Belmont and Saratoga. The new panel will replace the current 25-member NYRA board, which is made up of industry insiders, for up to three years.

The bill declares that the temporary structural change is needed "to ensure the viability and continuity" of the racing industry."

"This temporary reorganization board shall be under public control to ensure the New York Racing Association Inc. works in the best interests of all stakeholders in horse racing, including fans, owners and breeders, by managing the state and racing franchise with transparency and accountability," the bill states.

 Cuomo had announced his desire last month to cleanup NYRA after the latest in a string of controversies to strike the agency.

http://www.nydailynews.com/new-york/gov-cuomo-close-control-york-racing-association-article-1.1097188#ixzz1yB4yIwF3

AND JUST WHEN THINGS WERE GOING SO WELL.......

FIRST, THE GENTING DEAL FALLS APART….

Governor Andrew Cuomo said talks with gambling giant Genting to build a casino and convention center at the Aqueduct Racetrack in Ozone Park "haven't really worked out," and that he's shopping around for another developer.

"So a few weeks ago we started to bring in other gaming companies, the nation’s best," said Cuomo. "And, governor, they all want to come to New York. And they all have all sorts of exciting ideas, ideas that we didn’t even think of, and these are some of the premier gaming companies in the world, literally."

He also acknowledged something has been apparent for a long time: The Genting convention center proposal, which he announced his January 4 State of the State address, was a loss leader that could only be made whole with gambling.

Now, the governor said, "I’m thinking now the best way to go forward is to have a competition next year when we get the casino legislation passed. We were talking about doing a competition for casino developers, make the convention center-slash-casino development one competition, let’s get the best ideas, the best offers from the best companies on the globe and then we’ll make a decision."

Director of State Operations, Howard Glazer stated that: the clearest way forward appears to be a single international competition once the fate of the casino legislation and referendum has been determined.

http://www.capitalnewyork.com/article/politics/2012/06/6007062/cuomo-says-aqueduct-talks-gambling-giant-genting-havent-really-work

Fred Dicker of the Post reports that:

A Who’s Who of big-name Las Vegas gambling companies is lining up to replace the Genting company as builder/operator of a huge new convention center/megacasino complex in New York City, The Post has learned.

 Over the last three months, top officials from Sands Las Vegas, Caesars Entertainment and MGM Resorts have all told Howard Glaser, Gov. Cuomo’s state operations director, or other top Cuomo aides that they’re interested in replacing Genting.

Among top corporate representatives who spoke with Cuomo’s aides about the project were Sands board Chairman and CEO Sheldon Adelson, Sands VP Andy Abboud, Caesars VP Jan Jones and MGM Resorts VP Alan Feldman, according to the source.

http://www.nypost.com/p/news/local/cuomo_best_bet_for_nyc_casinos_vegas_APQfchr9pONkyZHz9pShKO#ixzz1yAaR2nuT

THEN, IT TURNS OUT GENTING GOT BIG $ TO CUOMO………..

The New York Times Reported that Genting was a big contributor to Gov. Cuomo

A lobbying group controlled by Genting Bhd. and other gambling interests donated $2 million to a powerful committee that backs New York Gov. Andrew Cuomo at around the same time that the governor announced he would push to legalize casinos.

The New York Gaming Association made the donation in early December to the Committee to Save New York, a business and trade union group that has spent $12 million to support Mr. Cuomo's agenda—more than any other lobbying group in the state. Around the same time, the committee began backing a constitutional amendment to legalize casino gambling.

http://www.nytimes.com/2012/06/05/nyregion/gambling-interests-gave-cuomo-ally-millions.html?_r=1

http://online.wsj.com/article/SB10001424052702303918204577447031922123686.html

However, both the Committee to Save New York and the governor's office insist the donation had nothing to do with Cuomo's sudden support for casino gambling. “We are proud of our track record, and if there are people who felt they were getting something more for contributing to C.S.N.Y., then they are simply wrong," said a representative from the committee.

http://nymag.com/daily/intel/2012/06/gambling-group-donated-to-cuomo-group.html?mid=rss

The Governor stated that said he walked away from his planned union with Genting for what the governor had been touting as North America's biggest convention center. He said he could not tolerate Genting's demands and did not want to be party to backroom deals. Talks could restart in late 2013, he suggested, after the conclusion of a series of envisioned casino expansion votes.

"The current racinos say the selection should be limited to the current racinos," Cuomo said. "I'm 100 percent opposed to that. I believe it should be an open competition." He didn't explain exactly why he views the current racino structure as scandalous, but suggested that taxpayers are not getting a fair return for giving each track the rights to set up VLTs.

Cuomo said that casino siting decisions should be based on the best location, best operator and best deal for the state. He'd like to see geographic balance, and didn't rule out locations in western New York — even though the Seneca Indian Nation argues that it holds exclusivity rights in the region. He did, however, say he disliked Manhattan as a potential site.

http://www.timesunion.com/local/article/Cuomo-calls-racinos-a-scandal-3608897.php#ixzz1yAo8zrXk

THEN, THAT GENTING GOT AN EARLY OPPORTUNITY TO PITCH THE DEAL………..

It was later reported that senior Genting executives put forth the idea for the convention center at a fund-raiser in October at the Westchester estate of Barry Gosin, a commercial property broker. The event was attended by real estate and gambling executives.  A few weeks after the fund-raiser, the gambling association, of which Genting is a member, contributed the $2 million to the Committee to Save New York, the private lobbying group that Mr. Cuomo pushed to be set up.

http://www.nytimes.com/2012/06/07/nyregion/genting-lobbied-for-convention-center-at-cuomo-fund-raiser.html

The Shinnecock Nation Tribal Trustees took exception to Gov. Andrew Cuomo's remarks this week that it would be "unrealistic" to open talks now regarding an Indian casino on Long Island.

In a statement Tuesday, the Trustees say the Shinnecocks "are a tribal nation, not a competitor or a gaming corporation with no community ties, seeking only to enrich itself," and they should not have to wait to get a seat at the table.

http://southampton.patch.com/articles/shinnecocks-tell-cuomo-to-open-l-i-casino-talks

NOW WE ARE FINDING THAT NOT EVERYONE WANTS A CASINO

The Albany Times-Union reports that a poll shows weak support for the constitutional amendment to allow gaming in New York. The Benenson Group talked to 800 New York registered voters last month and found that 50 percent would vote for a constitutional amendment to allow commercial gambling and 47 percent would not — but supporters are willing to be talked out of their position. The early, narrow support indicates the measure may be too weak to win, according to Joel Benenson, a former political aide to Gov. Mario Cuomo.

http://www.timesunion.com/local/article/Pollster-warns-New-York-s-gambling-expansion-plan-3519948.php#ixzz1y9umasxA

And the Anti-Gaming Lobby, having not truly existed and thus caught unprepared for this last winter’s drama, is starting to organize.

The anti-gambling coalition already has its eye on 2013, the soonest the second vote by the Legislature and one by the public could take place.

The group — the Coalition Against Gambling in New York — met with state legislators Monday, hoping to connect with incumbents running for re-election who would again have to vote on the casino Amendment next year.

“We feel that it’s not too soon to begin laying the groundwork for a fight next year,” said Joel Rose, chairman of the Buffalo-based group. “Most of the legislators who are here now will be back then, and we’ll be talking to people who are candidates, also. This is not going to be the end of our efforts. This is really the beginning of our efforts on this amendment.”

The coalition distributed a series of position papers on the amendment, opposing it for a variety of reasons. The economic development benefits of casinos are overrated, and legalizing any form of gambling raises “moral questions” about “the state raising revenue at the expense of the most vulnerable,” it wrote.

“We’re opposed to gambling because of the human destruction that it brings,” said Rev. Duane Motley, senior lobbyist for New Yorkers for Constitutional Freedoms, which is based in Monroe County. “Gambling does not produce economic stimulus that the government likes to paint that it will.”

http://www.lohud.com/article/20120522/NEWS05/305220088/Anti-gambling-group-targets-amendment?odyssey=mod%7Cnewswell%7Ctext%7CNews%7Cs&nclick_check=1

Nevele Grande purchase finalized

Nevele Investors LLC has finalized the purchase of the famed Nevele Grande Hotel and Country Club in Wawarsing with a closing on the property.

The investment group hopes to develop casino gaming at the facility.  It is expected the state will approve it in about a year-and-a-half. Should that come to pass, the new owners anticipate up to a $500 million in redevelopment and employ up to 1,000 people, said Michael Treanor, CEO of Nevele Investors LLC. The group paid $2 million and assumed $20 million in debt.

http://www.midhudsonnews.com/News/2012/April/28/Nevele_pur-28Apr12.html

OTHER GAMING NEWS

The U.S. casino industry continued to show a modest recovery from the recession in 2011 as gaming revenues increased 3 percent nationwide, but downtown Las Vegas and Reno continued their slide down the list of the nation's top gaming markets.

The report covers only commercial casinos and excludes those of American Indian tribes. The survey looks at how the casino industry was affected last year through national and state economic data and public opinion surveys.

The gaming association's survey found commercial casinos in 22 states collected $35.64 billion in gross gaming revenues in 2011, a 3 percent increase from $34.6 billion in 2010. The industry collected $30.74 billion in 2009.

http://www.lvrj.com/business/report-casino-industry-finds-modest-recovery-in-2011-150781465.html

Interestingly, Atlantic City has not been benefiting from the upswing in revenue.  Pennsylvania’s decision to legalize casino table games back in 2010 has really paid off. A new economic report by the American Gaming Association says the state’s gambling industry had one of the largest hikes in revenues in the United States last year. But just as it is at the poker table, for every big state casino industry win there is also a loss. With its business undercut by new casinos in neighboring states, New Jersey saw the greatest revenue drop in the country between 2010 and 2011 — a 7 percent decrease.

http://www.thirteen.org/metrofocus/2012/05/craps-atlantic-city-lost-big-bucks-last-year/

The legalization of Internet wagers cleared the state Assembly’s gambling committee, as lawmakers race to make New Jersey the first state that allows Internet betting.

http://www.pressofatlanticcity.com/news/breaking/new-jersey-assembly-panel-approves-online-gambling-bill/article_7fd470c2-9abe-11e1-93ef-0019bb2963f4.html