Cuomo Wins Casino Deal in Upstate New York From Lawmakers

New York Governor Andrew Cuomo reached a deal with lawmakers to license four Las Vegas-style casinos to boost the upstate economy, he said in a statement today. Voters will have the final say in November.

Under New York law, gambling measures must be approved in two consecutive legislative sessions, followed by a referendum. Lawmakers passed Cuomo’s plan last year and agreed to vote on it again before the current session ends this week, according to the statement.

The measure introduced yesterday would create two rounds of casino licensing. The first calls for four facilities upstate. Seven years after those licenses are sold, the second round would permit another three casinos in locations to be determined. Nassau and Suffolk counties on Long Island will also each get a video-slot facility.

Cuomo said in the statement that the measure would prevent neighboring states with legal gambling “take revenue that should be going to our schools.”

Lawmakers also agreed to pass a Cuomo initiative to create tax-free zones at State University of New York campuses, including Binghamton, Oneonta and Buffalo, Cuomo said in a statement e-mailed today. They also backed the governor’s call for an advisory panel to help distressed local governments reorganize and merge, a step meant to avoid state-imposed control boards such as those that oversee Nassau County and Buffalo, Cuomo said in a statement yesterday.

Reviving Economy

The casino and other measures are part of Cuomo’s plan to revive the upstate economy. The cost of government in the region climbed 47 percent from 2000 to 2010 as the population dropped by 1.4 percent, Cuomo has said.

New York already has five full casinos operated by Indian tribes under federal law. In addition, the state allows video-slot machines at nine race courses, including Aqueduct Racetrack in New York City’s Queens borough and Yonkers Raceway about 18 miles (30 kilometers) north of Manhattan.

The New York Gaming Association, which represents horse tracks with slots, opposes an amendment to permit nontribal casinos. The group wanted the state to let “racinos” expand to Las Vegas-style casinos instead, James Featherstonhaugh, head of the association, said June 11 in a statement.

Cuomo said in a radio interview broadcast June 17 that the association’s influence creates a “tricky” situation.

Competitive Process

“These racinos are well-financed players,” Cuomo said. “I’m not going to just give this franchise to anyone. It’s going to go to the highest bidder with the best record.”

The casino deal Cuomo reached with lawmakers allows for as many as four new video-slot facilities if voters knock down the amendment.

To advance the proposal, Cuomo struck deals with tribal groups, including the Oneidas in central New York, the Mohawks near the Canadian border and the Senecas in western New York, guaranteeing an exclusivity zone around each of their casinos. Those accords have left only three of six regions slated for full gambling licenses: the Saratoga-Capital District, the Hudson Valley-Catskills area and the Southern Tier near the Pennsylvania state line.

Foxwoods Resort Casinos and Muss Development LLC, a New York City company, agreed June 11 to build a resort on 500 acres in Liberty, about 100 miles northwest of Manhattan in the Catskills. The accord would still be subject to passage of the constitutional amendment and state gambling commission approval.

No Thanks

Las Vegas Sands Corp. (LVS), the company controlled by billionaire Sheldon Adelson that’s the largest U.S.-based casino operator, has said it has no interest in expanding in the state outside New York City.

The new casinos would share revenue with surrounding counties while also generating jobs as they draw tourists from New York City, Cuomo has said. All of that, along with the tax-free zones and the fiscal advisory panel, will help local governments restrain taxes and maintain services, he has said.

Companies and employees who are new to the state and move into the zones around the colleges won’t have to pay corporate, income or property taxes for 10 years under today’s agreement.

The municipal advisory panel will help cut costs, partly by using the state’s 2 percent cap on property-tax increases to curb raises for police and firefighters, according to the measure. The panel will also advise officials on how to combine services across jurisdictions and provide grants to help.

To contact the reporter on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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