New York’s real casino games begin

November 11, 2013 10:37 am

Now that Gov. Cuomo and Albany lawmakers have rammed through the constitutional amendment to legalize commercial casinos, the real games begin as operators maneuver to land a lucrative gambling license.

If history is any guide, the players with the most political clout and deepest pockets will receive a casinos license. Just look at Pennsylvania where the biggest campaign contributors and best connected friends of then-Gov. Ed Rendell and other key influential leaders in the House and Senate were awarded casino licenses – including many who had no casino experience. The winners included two convicted felons.

In New York, it is a safe bet that Cuomo & Co. have a pretty good idea who is going to get the four initial casino licenses. In fact, Albany has already earmarked the geographic areas where the casinos will go and can’t go. That decision was based more on politics than thoughtful economic analysis.

James Featherstonhaigh, a gambling industry lobbyist, part-owner of a Saratoga racino and longtime Cuomo family friend told Crain’s New York he did not know who would get a casino license.

“I don’t have any idea,” Featherstonhaugh said, apparently with a straight face.

The reality is Featherstonaugh is almost assuredly a lock to get a casino license in Saratoga. Other connected players likely to get a casino license include Jeffrey Gural, the owner of the Tioga Downs racino. Gural contributed $400,000 toward a group that purchased ads urging residents to vote to legalize casinos. He will be looking for a return on his investment.

Another likely winner will be Genting, the Malaysian-based casino giant. Genting controls Empire Resorts, which owns the Monticello racino. Genting also owns the lucrative Resorts World racino at the Aqueduct racetrack in Queens. Genting led the casino push shortly after Cuomo was elected and was a major donor to a nonprofit created to back Cuomo’s legislative agenda.

That leaves the rest of the less connected players to fight for the fourth casino license, including Caesars, the Las Vegas operator whose bid for a casino license in Massachusetts was rejected because of its $24 billion in debt and alleged ties to organized crime in Russia. See The New York Times report here.

Days after getting turned away in Massachusetts, Caesars pumped $100,000 into Cuomo’s efforts to pass the casino referendum. Caesars knows how the game gets played. Casino licenses usually go to the best connected and biggest donors.

Once that wheeling and dealing ends, look for Las Vegas operators like Steve Wynn, Sheldon Adeslon’s Las Vegas Sands and MGM to push for casino licenses in Manhattan.