Racinos back changes in casino bill

PHOTOGRAPHER: David Lombardo

An overhaul of Gov. Andrew Cuomo’s proposal for upstate non-Indian casinos has prompted the state’s nine racinos to drop their initial opposition.

James Featherstonhaugh, president of the New York Gaming Association, which represents the racinos, said the about-face was due to the legislation’s changes to tax rates for the new casinos, new method of determining license fees and additional emphasis on previous site investments for awarding casino licenses. The new language also means the nine racinos are committed to supporting a statewide referendum that will amend the state constitution to allow up to seven non-Indian live-table casinos.

The support of the racinos for the referendum may be key to it getting approved, as they had the potential to wage a significant lobbying effort against it.

“I believe [the casino bill] is significantly better than the original proposal,” Featherstonhaugh said Thursday.

Initially the biggest concern of the racinos was the 25 percent tax rate on gross gaming revenue that the new casinos would pay. Because the tax rate for racinos is double that rate, they said they couldn’t stay in business against their new competitors.

The compromise legislation requires new casinos to pay 10 percent on revenue from live-table games, but the rate for machine gaming, which are comparable to the VLTs at the racinos and will likely make up a majority of the gambling options at the casinos, will be equal to what the nearest racinos are required to pay.

A slight difference, though, is that the tax rates for racinos increase if their revenue goes up, which isn’t the case for the new casinos. Featherstonhaugh didn’t have a position on this difference, but said it raised an interesting question.

A major victory in the new bill for older racinos that will compete for a casino license, such as the Saratoga Casino & Raceway, is the way old site investments will be considered by the committee determining who will get a casino license. Initially, only proposed spending and investments dating three years back would be weighed, and now there is no limitation on what can be considered, although older investments can be discounted.

Featherstonhaugh also liked replacing the $50 million casino license fee with a rate to be determined by the board awarding casino licenses. “I think that is much more sensible. This business is not a one-size-fits-all business,” he said, predicting the license fee would be the lowest in the Southern Tier.

Regarding the bill’s provision to expand sites operating video gaming if the public referendum failed, he said it didn’t impact their decision-making process. Saratoga County Chamber of Commerce President Todd Shimkus on Wednesday said he thought this alternative was designed to keep racinos from opposing the referendum.

“I would love to know what the real intent of that is, other than political motivation,” he said.

Featherstonhaugh said the proposed alternative was a reasonable one for the governor to consider if he was looking to increase the state’s revenue.