Cool Hand Andrew? Casino Gambling Amendment Depends on a Little Luck

Written by Jon Lentz on . Posted in Budget/Taxes, Economic Development, News, Racing/Wagering.

In early 1996, Rev. Tom Grey was attending a church convention in Rochester when he met a man who told him that they shared a common goal. Grey, then the executive director of the National Coalition Against Legalized Gambling, was committed to keeping casinos out of New York. Grey didn’t know it at the time, but the man who approached him was a lobbyist for Donald Trump, who owned three casinos in Atlantic City and wanted to quash any competition just a few hours away.

In the following months, Grey and Trump formed an unlikely alliance of resistance. As New York lawmakers geared up to legalize casinos, Grey assembled a grassroots movement made up of environmentalists, lawmakers, local ministers, Catholics, liberal Protestants and the Christian Coalition. Trump spent hundreds of thousands of dollars on lobbyists and campaign contributions. In early 1997 the state Senate failed to pass the constitutional amendment to legalize casinos. Expanded gambling in New York had died—if only temporarily.

“At that moment, all of those forces converged, and we beat them,” Grey said in a recent interview. “This time it’s a tougher fight.”

Indeed the political landscape has changed dramatically in the past 15 years.

In Albany a constitutional amendment to legalize casinos sailed through both houses of the state Legislature twice, and will go before voters in a referendum next month. Out-of-state casino conglomerates have stayed on the sidelines in this fight, even though properties they own might lose business to new or expanded New York casinos. Trump says he does not oppose expansion any more—and he no longer has a significant stake in Atlantic City gambling anyway. The Native American tribes in New York that operate casinos signed new revenue-sharing pacts with the governor this year, neutralizing more potential foes. The owners of the state’s racetrack casinos, or racinos, are allied in support, even though only a few will be eligible for a license.

This time around there has been only token political opposition to the expansion effort, which has been spearheaded by Gov. Andrew Cuomo. Mayor Rudy Giuliani opposed the 1997 proposal because the five boroughs were excluded from the competition. Even with New York City now off the table for at least seven years, the two leading mayoral candidates, Bill de Blasio and Joe Lhota, support the amendment. In Nassau County the Republican county chairman directed state lawmakers to vote “No” in 1997, presumably to protect the local off-track betting corporation he headed. This month both Nassau County Executive Ed Mangano and his challenger, Tom Suozzi, rallied for the amendment. Frank Padavan, a state senator adamantly opposed to gambling, was voted out of office in 2010. Environmentalists like Robert F. Kennedy Jr., a Cuomo confidant, have not waded back into the debate this year.

The physical landscape has shifted as well. In 1997 New York had just one casino, the Oneida Indian Nation’s Turning Stone Casino. Since then, nine racetrack casinos and four additional Native American casinos have cropped up all across the state, as well as a few smaller bingo halls. In the northeast, what was then a handful of gambling locales has turned into an explosion of casinos in Pennsylvania, with several more in Maine, Maryland and, soon, Massachusetts. As the governor often points out, we already have gambling—so why not allow New York residents to spend their money here at home?

But while Cuomo has been dealt a strong hand—one he has played well— supporters and opponents alike wonder whether the views and values of New York residents have evolved enough to support full legalization of casinos. If a majority votes in favor, the governor will have once again seized on a shift in the public mood, just as the growing acceptance of homosexuality paved the way for the landmark state law legalizing same-sex marriage. If voters shoot down the amendment, it will be another failure for the governor on gambling, dwarfing his high-profile but ultimately scuttled plan to build the world’s largest convention center at a racetrack casino next to the Aqueduct Racetrack in Queens. Polls show a slight majority in favor of legalizing casinos, although the relatively low participation rate on ballot referenda makes predictions about the outcome risky.

“Look, it was always a close call in the polls,” Cuomo told reporters earlier this month. “I think if people know the facts, it passes overwhelmingly.”

It wasn’t so long ago that casinos were few and far between. When Nevada legalized gambling in 1931 in a bid to boost tourism, it was the only state where the activity was allowed. States began establishing lotteries in the 1960s, with New York only the second state to have one, in 1967. Three years later the state established off-track betting for horse racing to boost revenue for local governments. New Jersey followed in Nevada’s footsteps by legalizing casino gambling in Atlantic City in 1978. Then, in 1988, Congress passed the federal Indian Casino Gaming Regulatory Act, which let Native American groups operate casinos on tribal lands. In 1993 the Oneidas opened Turning Stone, New York’s first full-scale casino. Next door in Connecticut, Indian tribes opened the massive Foxwoods and Mohegan Sun casinos in the 1990s.

As a growing number of Native American casinos opened across the country over the past two and a half decades, one state after another legalized non-Indian commercial casinos. The 1997 bid for a constitutional amendment failed in New York, but after the terrorist attacks of September 11, 2001, lawmakers paved the way for limited casinos at horse racetracks around the state.

Thirty-seven states now allow full-scale casinos of some kind. The percentage of adults who gambled at least once at a casino in the past 12 months has risen from 17 percent in 1990 to 32 percent last year. Full casino gambling was approved in Pennsylvania in 2010, in Massachusetts in 2011 and in Maryland in 2012.

In his 2012 State of the State address, Cuomo said that New York is “in a state of denial.”

“It’s time we confronted reality,” said Cuomo, minutes after unveiling his proposal to build a massive convention center in Queens. “It is not a question of whether or not we should have gaming in the state. We have gaming in the state of New York. We have tribal casinos all across the state. We have racinos all across the state. We don’t realize it, we don’t regulate it, we don’t capitalize on it, but we have gaming.”

That altered landscape may make it easier to get voters to support even more expansion, said David Schwartz, the director of the University of Nevada, Las Vegas Center for Gaming Research.

“In 1976 when people in New Jersey voted, it was kind of like they were basically letting the genie out of the bottle and saying, ‘Wow, let’s try casinos someplace that’s not Nevada,’ ” he said. “Since then it’s been easier for them. If you’ve already got people gambling a lot in New Jersey and Connecticut, it’s difficult to see the public policy argument for saying why New Yorkers couldn’t just gamble in New York if they’re already gambling. That’s not to say there’s not an argument, but it’s a little more difficult to articulate.”

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