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Thursday, November 7, 2013

New York Casino Law - What it Means for Racetracks

As you know, the constitutional amendment in New York legalizing the establishment of seven casinos in the state has been approved.  With it's approval, one must wonder what the impact is on the racetracks in the state.  Since we are primarily a harness blog, we will deal with the impact on harness racing.

The leading candidates for the first three casinos are Monticello Raceway, Tioga Downs, and Saratoga Raceway.  Of course, there is nothing to keep someone else to seek the licenses for a casino. but the assumption is the tracks will get the licenses.  Yonkers Raceway would not be eligible for a casino license until seven years from now.

One issue horsemen have is the legislation caps support for purses at 2013 levels.  Meaning purses can be lower than they are this year but not higher.  Like in Pennsylvania, live games will not subsidize racing, only video games will.  Hence, the fear is racetracks will replace video games with table games so they may obtain more revenue.  I am not sure this is a realistic fear.  Slot machines are the most profitable game for casinos so eliminating any significant number of slot machines seems counterproductive.

I must confess I like the cap on purse subsidies.  If horsemen want purses to increase past 2013 levels, it will need ot be done the old fashioned way, through increasing wagering.  While horsemen like the SOANY has been attempting to build handle, it makes it more imperative to increase gambling.

Outside of New York, this bill does put pressure on New Jersey as the potential of a full casino in New York City is greater today than it was on Monday.  The question to be asked is if Mssgrs. Christie and Sweeney will seek to preempt New York from further raiding New Jersey for gamblers to play in their casinos by opening a casino in Northern New Jersey, presumably at the Meadowlands.  Don't expect anything too fast to transpire as they have seven years before the first NYC casino opens, this means the 2.5 years monopoly Atlantic City has according to Governor Christie, can expire without putting the state at further peril of losing additional revenue.

By midnight tonight we learn what happens in Illinois for 2014.  With the exception of TwinSpires (CDI), all the players in Illinois have agreed upon an ADW bill.  If this bill along with legislation seeking funding of the IRB's shortfall due the expiration of the prior ADW bill passes, all is well in Illinois.  If not, then it is a question how draconian the cuts to Illinois Racing will be.

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