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What you need to know for 08/23/2017

Coalition asking for a piece of casinos’ action

Coalition asking for a piece of casinos’ action

A group of entertainment venues in the state are calling on operators looking to open a casino in up

A group of entertainment venues in the state are calling on operators looking to open a casino in upstate New York to pay them a percentage of their gaming revenues.

The Upstate Theater Coalition For A Fair Game, led by Proctors CEO Philip Morris, is asking the operators to sign an agreement that would give them one half of 1 percent of the casino’s net gaming revenues, according to documents obtained by The Daily Gazette.

Net gaming revenues are defined as gross gaming revenues minus “free play” and state gaming taxes. So the coalition would receive one half of one percent of the revenues the operator takes home.

The quarterly payment would be “divided among and paid to the venues and Fair Game in accordance with the agreement among the venues and Fair Game,” the document states. The coalition comprises 13 venues, including five in the Capital Region.

On top of that quarterly payment, if a casino site expands its entertainment facility, adds a new one or books regular live performances, the operator would have to notify Fair Game and negotiate an annual payment of no less than $1 million.

Other terms of the proposed agreement include promoting events at the venues by purchasing and distributing tickets, establishing sponsorships and limiting any entertainment facility at the casino to 1,000 seats or less.

Operators proposing casinos in the Capital Region have not yet struck deals with Fair Game but are still negotiating. Applications for a casino license are due Monday.

Chicago-based Rush Street Gaming is pitching a $300 million casino in Schenectady, which company officials say could bring in up to $250 million in gaming revenue each year.

An average of 38 percent of the operator’s gross gaming revenue would go to the state. Tax rates on casinos vary by region, with 45 percent on slots and 10 percent on table games in the Capital Region.

That means Rush, for example, would take home an estimated $155 million after state taxes. One half of one percent of $155 million is $775,000. So under the current proposal, Rush would pay Fair Game approximately that amount.

The Upstate NY Gaming Economic Development Act requires casino hopefuls to reach agreements with venues that may be affected by the gaming facility, but does not require operators to reach an agreement with Fair Game. The law states that potential casino operators should establish “… a fair and reasonable partnership with live entertainment venues that may be impacted by a gaming facility under which the gaming facility actively supports the mission and the operations of the impacted entertainment venues … ”

If a casino operator declines to sign an agreement with any entertainment venue it must be explained in the application why they declined and the nature of the discussions or ongoing negotiations.

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