Oct. 29 (Bloomberg) -- Governor Andrew Cuomo’s push to amend New York’s constitution to allow Las Vegas-style casinos may end a 59-year wait for Jackie Horner, whose story of her student “Baby” inspired the 1987 movie “Dirty Dancing.”
In 1954, the owners of the Grossinger’s resort in the Catskill Mountains persuaded the dance instructor to move from New York City on the promise that there would someday be gambling to draw larger crowds from Manhattan. The casinos never came, and Grossinger’s, like many resorts in the once-booming Borscht Belt, struggled and closed. Horner still lives nearby and continues to give lessons at the few hotels that remain.
“It won’t be what it was, when hundreds of stars were up here and this was their playground and it was fabulous,” Horner, 81, said by telephone from Liberty. “It will give people jobs, and there really aren’t any right now.”
Polls show voters on Nov. 5 are poised to approve the amendment, making New York the most-populous U.S. state to allow full-scale casinos on non-Indian land. Cuomo, supported by gambling operators such as Kuala Lumpur-based Genting Bhd., has been pushing for the change for two years. Facing re-election next year, he says casino gambling will revitalize the economy in the Catskills, about 100 miles (161 kilometers) northwest of Manhattan, and elsewhere upstate.
The measure is backed by New York Jobs Now, a political-action committee that has raised more than $2 million, including $500,000 from Genting, according to campaign-finance records. New Yorkers already spend $1.2 billion annually in casinos in neighboring states, including New Jersey, Pennsylvania and Connecticut, said Stu Loeser, a spokesman for the coalition.
“There was once a significant hotel industry in the Catskills that could be recreated,” said Loeser, whose parents met there when they were 16 while working at a resort that catered to customers of German-Jewish descent. “With casinos, there would also be a very real dynamic for the seasonal businesses in the Catskills to expand to year-round operations.”
Casino revenue will be split among the localities that house them and disbursed statewide as aid to schools and to cut property taxes, Loeser said. It also would be put toward improving roads and other infrastructure to handle increased traffic, he said.
Even if the amendment passes, New York City, the most sought-after market for gaming companies, won’t get casinos until at least seven years after the first of four -- including two in the Catskills -- is licensed, according to state law. That stipulation will keep Las Vegas Sands Corp., the largest U.S.-based casino operator, out of the state, Michael Leven, chief operating officer, said in June.
The temporary New York exclusion will also allow Genting, which controls Southeast Asia’s biggest casino operator, to run the only slot machines in the city for almost another decade without competitors. Genting operates the Resorts World Casino at the Aqueduct Racetrack in Queens, which has more than 5,000 electronic slots and table games.
Cuomo, a 55-year-old Democrat, has said keeping New York City off limits will allow the economic benefit to be felt primarily upstate.
Casinos on American Indian reservations were allowed under a 1988 federal law. Earlier this year, Cuomo used the prospect of bringing in more gambling to get the three tribes that operate five casinos in the western, northern and central parts of upstate New York to agree to revenue-sharing deals in exchange for exclusivity in their regions.
Cuomo says it’s no longer a question of whether the state should allow casinos because the tribal operations already exist.
“It’s not really should we go there, or not -- we’re there,” Cuomo said at an Oct. 23 news briefing in Albany. “The question is should we regulate them better, maximize the resources and create jobs in upstate New York.”
The measure on next week’s ballot will contain language similar to the governor’s comments. A state Supreme Court judge in Albany ruled this month that a lawsuit by Eric Snyder, a Brooklyn lawyer, challenging the wording as prejudicial had come too late.
An Oct. 21 poll by Siena College in Loudonville found that when voters were asked about a generic casino amendment, 49 percent said they would support it and 45 percent were opposed. When voters were read the wording that will appear on the ballot, the support jumped to 56 percent to 40 percent.
New York’s plan to approve gambling is part of a decades-long, incremental push by proponents, said David Blankenhorn, president of the Institute for American Values, a New York-based group that opposes casinos. The state lottery expanded from a simple numbers game to bingo-style keno in 1995, and the legislature approved video slot machines at nine racetracks in 2001.
“Gambling proponents needed all the steps along the way,” Blankenhorn said. “To get rid of the constitutional ban, they’ve had to present it as a modest enhancement of activity that is already here and will bring economic development to a distressed part of the state.”
The institute and other opponents say gambling hurts poor people, feeds addiction, doesn’t deliver the economic gains supporters promise and will lead to increased traffic in the state’s most-scenic regions.
If the amendment passes, at least four casino developers are planning to compete for the two Catskill licenses. The Nevele, a resort in Ellenville that closed in 2009 after 106 years, wants to reopen as one. Foxwoods Resort Casino, in Mashantucket, Connecticut, said in June it wants to put one next to Grossinger’s in Liberty.
The Concord Resort Hotel in Kiamesha Lake is the target of two developments. Empire Resorts Inc., whose subsidiary owns the Monticello Casino & Raceway about four miles from Kiamesha Lake, wants to build a casino, hotel and golf course at the Concord. Mohegan Sun is interested in opening a casino on a different parcel at the Concord, Mitchell Grossinger Etess, chief executive officer of the Uncasville, Connecticut-based Mohegan Tribal Gaming Authority, said in an interview.
From 2011 to April 2013, gambling interests, including Genting and the Seneca Nation of Indians, spent $14.7 million on lobbying and contributed $2.4 million to New York political campaigns, according to Common Cause New York, a government watchdog group. Cuomo’s re-election campaign picked up $242,000 in casino-related cash, Common Cause said.
“There’s no question of all the places in New York, the Catskills would have a lot to gain,” said Etess, who was raised at his family’s Grossinger’s resort and served as its general manager.
By 1971, Catskill resort owners were pushing state officials for casinos to boost business. The mostly Jewish families who once escaped New York City’s summers in the mountains were now taking advantage of the low-cost travel on planes to Europe. The hotel owners were looking for a “shot in the arm,” Robert Parker, then general manager of the Concord, told the Offtrack Betting Commission.
Grossinger’s closed in 1986. In the 1960s, the Village of Liberty, the town’s commercial hub, accounted for more than half of the tax base, Charlie Barbuti, the town supervisor, said. Today, it’s less than 30 percent, with residential property owners town-wide bearing an increased burden, he said.
“We don’t generate enough taxes to maintain our services and infrastructure,” Barbuti said by phone. “Farmland is beautiful, but it doesn’t create revenue like hotels.”
Casinos won’t provide the economic boost that Cuomo and Barbuti envision, said Ramsay Adams, who heads the environmental group Catskill Mountainkeeper in Youngsville. Instead, they will take cash from the state’s poorest and bring more traffic and crime to a region that would be better off marketing its beautiful scenery to tourists and its low-cost land for farming, he said.
“That kind of work will create sustainable, long-term growth, and all other options are silver bullets that won’t work,” Adams said by phone.
Regardless of the vote, Grossinger’s resort, where trees are growing in the indoor pool, graffiti lines the walls and ceilings are collapsing, will have to be torn down, Horner said. Meanwhile, she’ll still have her dance classes to teach on Monday nights.
“They promised back in 1954 that there would be gambling,” she said. “I’m still waiting.”
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