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ALBANY – Frustrated by the lack of a casino revenue agreement with the Seneca Nation, Gov. Andrew M. Cuomo on Wednesday proposed permitting a new Las Vegas-style casino in Western New York if voters statewide approve a gambling expansion amendment to the state constitution.

If that statewide plan fails, Cuomo proposed locating two gambling halls with slot-like machines in Western New York to compete with the three Seneca casinos.

The dramatic escalation of the state's fight with the Senecas came a day after Seneca President Barry Snyder Sr. called Cuomo a “bully” in between Snyder's meetings with state legislative leaders to try to beat back Cuomo's casino expansion plan. Cuomo officials, according to sources involved in the negotiations, called Snyder's comments the final straw that led to the governor releasing his bill Wednesday with the added Western New York gambling sites to challenge Seneca casino operations.

The casino bill still needs legislative approval and the backing of a separate constitutional amendment change by voters in a statewide referendum as early as this fall.

The bill calls for a “destination resort” casino located in Western New York if the Seneca Nation's 2002 casino compact with the state is not in “good standing.” It does not say who determines such standing, and the Senecas have insisted Cuomo cannot unilaterally impose such a condition.

In addition, the legislation states that two new video lottery terminal facilities, which offer slot-like devices such as those at the Hamburg and Batavia harness tracks, can open in Western New York if voters do not approve the broader statewide casino expansion. The VLT facilities cannot offer table games such as poker, but the existing nine track-based casinos have proven increasingly successful for their operators in recent years.

Both sides said Wednesday evening that negotiations have not broken down and that talks are continuing, but Cuomo has publicly and privately described the progress as nonexistent.

The governor's overall casino plan would locate the first three of seven casinos in upstate regions. He divides upstate into six areas but takes two out of the running – a large swath of Central and Northern New York – because of recent deals he cut with Indian tribes already operating casinos in those areas.

If the Senecas and the state reach a deal to end the dispute that has halted $600 million in tribe revenue-sharing payments to the state and Buffalo, Salamanca and Niagara Falls, the region would be taken off the list of eligible areas for a Class III casino that offers the full array of gambling, except betting on sports.

The additional casino and two possible VLT-only casinos for Western New York would be competitively bid, with the operators chosen by the state Gaming Commission, which Cuomo controls, or a panel appointed by the commission.

The Senecas, under their 2002 compact with New York State, were granted exclusive gambling rights in a large zone that extends from about the middle of the Finger Lakes region to Lake Erie.

While Cuomo proposed a new Class III casino for Western New York if the state and Senecas don't resolve their fight, the two other facilities could only offer video lottery terminals. No table games would be allowed in those facilities, which would only be placed in the region if the Senecas' compact was no longer considered valid.

Cuomo has floated the idea of trying to get a commercial developer to open a casino in downtown Niagara Falls as direct competition to the Seneca Niagara Casino.

Wednesday, Snyder said in an interview with The Buffalo News, in which he twice called Cuomo a “bully,” that the tribe doesn't fear Cuomo's threats and believes that its casino in Niagara Falls would still flourish even with new competition.

Other upstate areas that could have a Las Vegas-style casino would be a part of the Southern Tier, the greater Albany area and the lower Hudson Valley, including the Catskills region. Casinos would be banned in New York City. Other areas of downstate could get one of the remaining four casinos under the seven-casino plan, but not until at least five years after the first upstate casino opens.

The Cuomo plan also calls for casino franchise operators to pay the state at least $50 million in upfront fees and to pay Albany 25 percent of gross gaming revenues. That is less than half the tax rate imposed on racetrack-based casinos, meaning the future gambling operations under the Cuomo plan will be far more lucrative to their owners and provide a smaller percentage of funding to the state than the nine track casinos.

Bettors must be age 21 or older to gamble in the facilities, and, unlike the Indian casinos, gamblers will not be able to smoke in the casinos under the Cuomo plan. The legislation also proposes to ban political contributions by casino applicants to statewide or state legislative officials, and a new Inspector General's Office would be created within the Gaming Commission.

Lawmakers and Cuomo have until June 20 to negotiate the casino bill before the scheduled end of the 2013 legislative session. Lawmakers last year approved a resolution amending the state constitution to permit up to seven new casinos; the same, vague resolution has to be approved again this year if voters are to consider it in November. That 17-word resolution states that casino gambling will be permitted at no more than seven new facilities in the state.

A separate enabling bill, like the one Cuomo proposed Wednesday, is needed to lay out the specifics of how the casino expansion would work; there is nothing to stop future governors or lawmakers from changing those terms if voters approve the casino amendment to the constitution this fall.

email: tprecious@buffnews.com