05/13/2013 11:04AM

Jay Bergman: New York would be better served building casinos near the city

Derick Giwner
Yonkers Raceway could be the perfect place for a new, expanded casino.

New York Gov. Andrew Cuomo announced last week his plan to create three new casinos in Upstate New York. His plan excluded any hope for new casinos in the New York City area for a period of five years.

While Cuomo’s message appears to be just talking points, as the state Senate and legislature will need to provide input for any plan regarding future casino properties, the voting public will have to affirm Cuomo’s right by approving a constitutional amendment either later this year or next year.

While discussion of new casinos is nothing new in Albany, the mention of a five-year plan hardly seems worthwhile, not just for the horse-racing and casino industries but for the state itself.

The politics of this proposal seem way ahead of the economic benefits, as the governor singled out the need for jobs and tourism in his speech. Clearly, Upstate New York, like many regions of the country, needs more job opportunities. Tourism, on the other hand, especially when linked to casinos, is something that would make sense if this proposal were being made, say, 25 years ago and not in 2013.

If there is one certainty about modern times, it’s that we no longer live in a casino-gambling era dominated by Las Vegas and, more recently, Atlantic City, N.J. New York is bordered by three states that already offer casinos: Pennsylvania, New Jersey, and Connecticut. Ontario also is planning a gaming expansion. So, what is this talk about tourism?

[DRF HARNESS: Sign Up for the FREE DRF Harness Newsletter Today!]

Does the governor or his advisers truly believe that millions of people in the New York City region are going to drive, bus, take a train, or fly to Upstate New York because they are unwilling to leave the state to gamble?

If downstaters won’t travel upstate, why would neighboring states’ residents leave fertile ground for the privilege of gambling in Upstate New York?

Perhaps it’s too early to understand what the governor is looking for, but it would seem he would like to extend the clock some to perhaps generate additional political contributions while definitive locations are named and major casino companies try to gain political favor.

Which raises the question: Is this truly about jobs and tourism?

It would seem that if the elected officials in New York State were really interested in expanded gaming, while at the same time offering some form of school-tax relief to their already-overtaxed constituents, a better move would be to plant at least three new casinos in the New York City area as soon as possible.

What the New York City area has, and the upstate will never match, is an enormous population base and three international airports to bring in customers from all parts of the world. In other words, downstate has everything in place to be an instant success.

Wouldn’t even more jobs be added to the state’s rolls with three downstate properties as opposed to upstate? Wouldn’t the economic benefit to the state be that much greater if serious money started flowing in at inception rather than five years later?

A close look at revenue generated at Empire City Casino (Yonkers Raceway) and Resorts World (Aqueduct) should be all the governor needs to understand why the New York City region needs to be a major part of any new casino vision. In fiscal year 2012-13, Empire City Casino and Resorts World combined to contribute $581 million to the state’s education budget, while the total revenue from seven upstate racinos for that period was a shade under $250 million.

Yes, New York City already does well from a tourism standpoint. It will do well when the Super Bowl arrives in February, even though the game will be played in New Jersey. But we should all understand by now that casinos, as they exist today, are more about convenience and locality.

Gamblers no longer need to travel to gamble, and creating more options closer to home will ensure that they travel even less in the future.

Perhaps no state would benefit more from Cuomo’s plan than the Garden State. While New Jersey’s governor had a shorter-term plan for the revival of Atlantic City, his timetable could and should change rapidly if those in Albany choose to go in the New York governor’s direction.

With that said, nothing would strike a nerve in Albany more than a new casino at the Meadowlands. It hardly seems that long ago (1976) that the Meadowlands rose, taking away New York’s harness-racing monopoly, and its new stadium lured New York’s two NFL franchises. Is it possible that history will repeat itself?

Cuomo’s father was New York’s secretary of State under Gov. Hugh Carey at the time, and neither was able to thwart New Jersey’s bold vision of the future. But now we’re talking about New York’s vision, and it says no casinos in the New York City region for five years after the upstate casinos are built. That’s a rather large window Cuomo is opening.

“We need jobs in Upstate New York and economic activity in Upstate New York like we need oxygen,” Cuomo said during his speech last week. Funny how he used the word “oxygen” since it’s well known that casinos pump oxygen onto the gaming floor to revitalize players.

Casino gaming will, at some point, reach its saturation. Revenue in many areas is ticking down as continued expansion drains the base. While some jobs are sure to be created in these three upstate locations, the boom will only be temporary if there’s a limited outside draw (tourism), and if money initially spent in one part of the local economy gets diverted to the local gaming house.

In the governor’s address, he suggested that New York City-area voters would go along with his expansion plans when they vote on the constitutional amendment because it would help pay the costs of schooling. Perhaps the governor should send that message to his upstate constituents, telling them how much he could lower their taxes with the benefit of revenue generated from three downstate casinos.

In the meantime, those in New Jersey should be rooting that the New York governor doesn’t change course, and thus opens the near-term possibility of a new casino, much like its new racetrack and its new stadium, to rise up at the Meadowlands.