The timing is worthy of note. As trucks in Albany were unloading reams of documents describing 17 proposals for four new casinos in New York, Moody’s Investors Service was issuing its latest report on gambling — downgrading the national gambling business from “stable” to “negative.” In other words, just when New York is proposing to ramp up its gambling business, the financial community is souring on the idea that casinos are an easy answer to state and local financial problems.
There have been plenty of reasons lately to worry about the casino business. Despite millions in tax credits, another major casino in Atlantic City has filed for bankruptcy and Trump Plaza casino is threatening to shut down in September. A Mississippi casino closed its doors, and New York’s comptroller, Thomas DiNapoli, warned that the job and economic gains in communities where new casinos are built “may be offset by losses elsewhere.”
Such gloomy news has not stopped big money from flowing into the state from casino operators as payments to lobbyists and campaign contributions to candidates. The New York Public Interest Research Group reported last week that companies competing for contracts have already paid $6.7 million to industry lobbyists. Gambling executives have contributed $4.3 million to state and local politicians in the last two years.
Another problem is a loophole in New York’s lobbying law that allows gambling companies to avoid public disclosure of their lobbying activities in communities with fewer than 50,000 residents. Fifteen of the 16 municipalities proposed as sites for the casinos fall into this category, and it is a safe bet that none of them have been exposed to this kind of big-dollar courtship. Caesars Entertainment, for instance, wants to build an $880 million casino resort in the Orange County town of Woodbury, which has a population of about 10,000. Caesars’s spending on lobbyists can be off the radar.
A five-member state board appointed by Gov. Andrew Cuomo is supposed to choose four sites and the companies that can build on them by this fall. This seems much too hurried. As Moody’s is warning, it is time to beware of all the promotional hoopla and realize that casino gambling does not always deliver on its promise.