ALBANY – Donald Trump and other Atlantic City casino interests in 1997 spent a lot of money on a lobbying campaign to help kill a plan that would have allowed commercial casinos in Western New York, the Catskills and just north of Albany.
A generation later, New York gambling interests want the Empire State to return the favor. Or, at least, reduce the fiscal blow if New Jersey goes ahead with its own gambling expansion plans.
A gambling border war between New York and New Jersey is brewing in a debate that has financial implications for both states.
Depending on the outcome, New York is at risk of losing hundreds of millions of dollars in state revenues earmarked for 700 public school districts from Buffalo to Long Island if the Garden State goes ahead with casino expansion.
New Jersey lawmakers last week approved a referendum for voters this fall that seeks to permit two new casinos that likely would be located in communities just across the Hudson River from New York City – easy access for gamblers across several bridges and tunnels.
The move in New Jersey has stirred a group of New York gambling interests into action, and they hope to awaken state officials about the fiscal danger the New Jersey plan poses.
If the two New Jersey casinos open, the association representing racetrack-based casinos in Queens and Yonkers, as well as Hamburg, Batavia and the Finger Lakes, projects a loss of $200 million in revenue-sharing money they send to Albany for the state’s 700 public school districts.
“New casinos in northern New Jersey would present a significant threat to New York’s gaming industry, risking hundreds of millions of dollars in critical education revenue and jeopardizing thousands of family-sustaining jobs,” the New York Gaming Association said in a statement. “New York must ensure that its successful casinos can continue to compete on a level playing field.”
Two casinos in New Jersey could cannibalize revenues at two racetrack-based casinos in Queens and Yonkers as well as a future full-scale casino under construction in the southern Catskills in Sullivan County, said Michael Wilton, the group’s executive director. The fear is gamblers from New York City and its suburbs will take the short drive to New Jersey to play in full-scale casinos rather than the more limited facilities in Queens and Yonkers or the 90-minute drive to the Catskills.
The impact beyond those three New York gambling halls comes in the form of revenue sharing that casinos provide to state and local governments. Two full-scale casinos in northern New Jersey could hit downstate casino revenues at a level that would result in $200 million in lost revenue-sharing proceeds for the state’s education aid program, Wilton said.
The state constitution requires that money going to the state Lottery Division, including the racetrack-casino revenues, be directed to schools. Since its start, though, the gambling money has supplanted, not supplemented, money for education from the state’s general fund.
Overall, total gambling revenues in New York could drop by as much as 25 percent, he warned, a level that would hit localities that now share in casino proceeds, as well as state Lottery Division funding and revenue-sharing for the state’s horse racing industry.
The Gaming Association is not saying what its plans might be to try to address the New Jersey bid to add two new casinos so close to New York City. A direct advertising campaign in New Jersey could, of course, backfire if Garden State residents take offense that New Yorkers are trying to influence their November ballot.
For certain, though, it could put pressure on Gov. Andrew M. Cuomo and lawmakers in Albany to change the terms of New York’s 2013 casino legislation. That bill called for four initial casinos to go upstate. Three licenses – in Seneca, Schenectady and Sullivan counties – were awarded last year and a fourth in Tioga County is pending. Lawmakers and lobbyists have long assumed at least one or two of the remaining three licenses would go in or near New York City.
Approval of the New Jersey casinos could pressure New York officials to undo the seven-year time-out before approving the remaining three licenses. That, in turn, could have its own potential negative effects on the existing downstate racetrack-based casinos or the one under construction in the Catskills.
Atlantic City saw the closure of four casinos in 2014, and two big Connecticut Indian-owned casinos have seen revenue drops in recent years.
The state’s nine track-based casinos provided $888 million in proceeds to the state on the losses by gamblers who play the video lottery terminals. Over the last 10 years, Albany has gotten more than $6 billion in revenue sharing funds from the VLT facilities, Wilton said.
The Gaming Association said the state is trying to “maintain a competitive edge in an increasingly crowded industry,” but that it must “take the necessary steps to preserve our market.” The trade group is not yet stating what it believes New York State should do in the face of the possible New Jersey casino expansion.
The Gaming Association’s members include Finger Lakes Gaming & Racetrack, which is owned by Buffalo’s Delaware North Cos., Hamburg Gaming at Buffalo Raceway, which is managed by Delaware North, and Batavia Downs Gaming, which is owned by Western New York Off-Track Betting Corp., which in turn is owned by counties in Western New York as well as the cities of Buffalo and Rochester.