11/06/2013 3:56PM

New York voters approve casino referendum

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Voters in New York on Tuesday overwhelmingly approved a ballot measure giving the state the authority to award seven new casino licenses as part of a plan pushed by Gov. Andrew Cuomo.

Voters approved the referendum by a margin of 57 percent to 43 percent. The amendment will immediately allow the state’s gambling commission to begin the process to identify four casino projects for three areas in upstate New York. The location for the other three casino licenses has not yet been determined, but enabling legislation providing for the referendum prohibits the award of a license in the New York metropolitan area for at least seven years.

The ballot measure was strongly supported by Cuomo, who orchestrated a state takeover of the board of the New York Racing Association in 2012. Genting, the Malaysian company that operates a casino at Aqueduct that is the most lucrative gambling facility in country, supported the measure as part of its aim to expand into other areas of the state. The seven-year moratorium on a New York City-area casino will protect Genting’s existing Aqueduct property from competition.

New York already has five full-blown casinos operated by Native American tribes and another nine slot-machine parlors operated by racetracks.

The enabling legislation passed earlier this year allowed for two struggling Long Island offtrack betting companies, Nassau and Suffolk, to each open slot-machine parlors with as many 1,000 machines. Bizarrely, if the referendum had failed, the counties of Nassau and Suffolk would have been allowed to award licenses for the operation of an additional 1,000 machines to other licensees in addition to the OTB companies.

Joe Cairo, president of Nassau OTB, said Wednesday that the company is already seeking approvals for its parlor, which will likely be located at its Race Palace location in Plainview.

Also under the enabling legislation, the two Suffolk and Nassau casinos will be required to send as much as 5 percent of their slot-machine revenues to horsemen at NYRA if subsidies from the Aqueduct casino do not total the amount received in 2013. The provision is being called a “hold-harmless” clause in the event that business at the Genting casino is negatively impacted by the Suffolk and Nassau casinos.

The casinos that receive licenses under the enabling legislation will not be required to direct any of their revenues to the racing industry, unlike the nine racetrack-casinos, and they also will pay a lower tax rate to the state.