ALBANY – Six weeks after the 9/11 terrorist attack in 2001, New York lawmakers rushed back to Albany for a special session and passed a series of money-raising solutions for a state devastated by the attacks.
Leading the way was the greatest expansion of gambling in state history, including three Seneca casinos in Western New York, casino gambling at existing racetracks and the state’s entrance into a national lottery.
Eleven years later, a similar scenario is playing out to expand gambling in New York even further because of the devastation from Superstorm Sandy and its huge cost to the state.
Gambling interests met last week with senior-level Cuomo administration officials over ways to quickly increase revenues from gambling operations.
“The state needs money, we’ve been good partners, we’re here and we’re prepared to go forward quickly,” said James Featherstonhaugh, a Albany lobbyist and president of the New York Gaming Association, which represents the nine tracks in the state with casinos.
Meanwhile, gambling critics from 2001 are now renewing their efforts, with accusations that lawmakers and Gov. Andrew M. Cuomo will try to take advantage of Sandy’s economic devastation to put more casinos in operation.
“This is going to be the narrative we’ll be given: that we have to have these casinos to offset Sandy’s impact,” said the Rev. Jason McGuire, executive director of New Yorkers for Constitutional Freedoms, a religious organization that went to court a decade ago and unsuccessfully challenged the gambling expansion.
Topping the list of gambling proposals is one proposing more casinos in New York. Lawmakers earlier this year approved the first step to amend the state constitution to permit up to seven Las Vegas-style casinos at undetermined locations on non-Indian lands. The State Legislature must act again in the new year if the plan, promoted chiefly by Cuomo, is to go before voters in a statewide referendum next November.
Even before the casino expansion question is resolved, the gambling industry is pushing new gambling proposals that would generate more state revenue.
Efforts are afoot to permit some racetrack-based casinos to keep their doors open 24 hours a day, instead of the 18 hours now allowed.
Another idea calls for increasing the betting action by allowing bettors to reinvest winnings at the machines instead of walking away from the gambling rooms and going to a nearby kiosk to cash in.
Others are pushing for a greater mix of electronic games at the racetrack casinos, such as blackjack and poker, which now are not allowed.
“That alone would produce for the state ... something on the order of $150 million,” Featherstonhaugh said of the expansion of electronic games.
And Featherstonhaugh’s organization believes that the Cuomo administration has the power to expand the electronic games on it own.
Still others are making a more ambitious push: Permit the track-based casinos to offer poker with trained dealers, not machines.
Though critics say such an idea is illegal under the state’s constitution, backers see some wiggle room following a federal court judge’s ruling in August. The judge tossed out the conviction of an operator of a Staten Island poker parlor, in part, because the poker games were considered games of skill and not games of chance, which are banned by New York.
And then there is the broader debate about allowing up to seven new casinos. Several tracks, including one in Queens run by a Malaysian gambling company, are most interested in bidding on rights for full-blown casinos.
Other tracks, such as one owned by Buffalo’s Delaware North, are likely more interested in expansion into electronic table games like poker.
In the mix also are some of the major gambling names, all of which already have lobbyists on retainers in Albany: Caesars Entertainment, MGM Resorts and Wynn Resorts.
Some industry insiders say Superstorm Sandy will make it easier to put casinos in downstate areas, such as hard-hit Coney Island in Brooklyn or even in Manhattan, all under the claim of needed economic development.
Eleven years ago, some lawmakers argued that state officials should not use a tragedy to promote more gambling.
Then-State Sen. Thomas Duane, a Manhattan Democrat, called the tie-in between the terror attacks and gambling expansion “a complete disgrace.”
“I don’t see any way that our passing a resolution to allow people to vote on gambling to be fulfilling our patriotic duty,” he told his colleagues that October night. “We’re using the guise of the terrible tragedy ... to make New York one of the biggest gaming states in the nation.”
But Assemblyman Gary Pretlow, chairman of the racing and wagering committee, last week dismissed any comparison with 2001.
“We’re not going to put a casino on Staten Island just because Staten Island is devastated,” the Westchester County Democrat said.
Even before Sandy, there was deep support among lawmakers to pass an amendment allowing casino expansion and putting it to a state referendum, he said.
“It [the storm] may bolster the argument, but I don’t think we had a problem doing second passage anyway,” he said. “I see the impact of the storm on the state; I don’t see the impact of the storm on the possibility for or not having full-fledged casinos in the state.”
Numerous scenarios are kicking about in Albany.
One theory is that Cuomo begins the bidding process for casinos before a statewide referendum so that, if it passes, he can quickly award contracts and Albany can collect franchise fees. Some estimate the fees could top $1 billion.
That would allow the governor to “book” revenues in a coming year already projected to be in the red by at least $2 billion.
But lawmakers will want to know specifics before passing another casino bill next year, according to State Sen. John Bonacic, a Republican who represents the southern Catskills region.
Still uncertain is whether the state would try to locate another casino in Western New York – which would be a clear violation of the decade-old exclusivity deal between the state and the Seneca Nation.
Superstorm Sandy, Bonacic said, has put “an exclamation point” on the fact that New York is going to need to raise money next year.
“Sandy certainly makes the argument stronger, not only for fiscal relief but for help with new infrastructure,” he said.
But McGuire, the head of the religious group that opposes the gambling measures, said “We’ve been down this road before, and it didn’t lead us out of the wilderness [in 2001], and this won’t either.”