1 July 1 marks first official missed casino payment
2 Cuomos office allegedly never scheduled meeting? The Cold War between the Seneca Tribe and New York State could be escalating shortly. After several months with no progress, things got more serious after the tribe officially missed its first scheduled payment to the state for its tribal casinos. The lack of payment is not a surprise though. The heart of the issue between the state and the tribe is Senecas insistence it no longer owes any casino revenue to the state. July 1 marks first official missed casino payment The Seneca Nation declared it would no longer be issuing payments in March. However, July 1 is the date this stand off officially got real. Not only did Seneca issue no payment, the tribe also made it abundantly clear not to expect a check any time soon. Seneca believes the contract between the tribe and the state ended after 14 years. The agreement began in 2002. Things seemed to be going well for both parties too. The state and the tribe mutually agreed to extend the agreement through 2023. What they did not agree on was if the payments got extended with the contract too. Shortly after the missed payment, Seneca Nation President Todd Gates issued a statement in the Niagara-Gazette. Cuomos office allegedly never scheduled meeting? Even with this hard stance, the tribe claims to be willing to talk with Gov. Andrew Cuomo and state officials about a compromise. Gates says he spoke with Cuomo about a meeting in March, but that the Governors office never followed up to set a time. That means for the past three months, there has been no progress towards securing future payments from Seneca, according to the tribe. The Niagara-Gazette reports the mayor of Niagara, NY, Paul Dyster, says he is talking with the Governors office every day. Dyster claims Cuomo repeatedly sent letters to Seneca Nation and Gates with no response. If the two groups are not willing to settle the matter over a meeting, the next step is arbitration. As Gates noted, the tribes contributions are a significant part of the New York state budget. More importantly, the local governments are especially reliant on those funds. The three New York casinos operated by Seneca Nation are in Niagara Falls, Buffalo, and Salamanca. The casinos collectively paid $100 million to the state last year.
1 New York casinos projected to take in $267 million this year
2 More on Rivers, Tioga Downs, and del Lago
2.1 Tioga Downs
2.2 Rivers Casino Schenctady
2.3 del Lago Casino After a strong start, New York casinos are starting to slump a bit this summer. As a result, it appears the new properties upstate will not meet revenue projections for 2017. The situation is far from catastrophic. Nonetheless, it is problematic that the casinos will likely miss revenue projections by almost $60 million. New York casinos projected to take in $267 million this year According to the New York Gambling Commission, the non-tribal New York casinos generated $133.6 million from the start of the year through the end of May. With the year now almost halfway over, that puts year-long estimates at $267 million. That may sound like a solid number, but it is 18 percent lower than the Commissions original estimates of $325 million. The casinos got off to a strong start. Initially it appeared they would be close to projections. However, some casinos, like Tioga Downs, experienced their best months in the spring. The good news is the drop off is not too substantial. Tioga Downs peaked at just over $6 million in March, but generated $5.89 million and $5.99 million in revenue during April and May, respectively. Meanwhile, del Lago is trending downward, taking in $13.2 million in April, but only $12.7 million in May. Rivers Casino in Schenectady is also slipping. The newest New York casino took in $10.9 million last month compared to $11.2 million in April. More on Rivers, Tioga Downs, and del Lago Now that the new New York casinos have had a few months to get their bearings, the pecking order is falling into place. Tioga Downs Tioga Downs existed before Gov. Andrew Cuomo signed the 2013 gambling expansion law. The racino upgraded to a full casino, adding table games, as part of the expansion. The casino currently offers over 1,000 slot machines and 40 table games. It is the smallest of the three casinos. With that in mind, even though it had the time advantage, it is generating the smallest revenues of the three new casinos. Rivers Casino Schenctady Rivers Casino is the newest of the New York properties, but only opened one week after del Lago did. The property features 1,200 slot machines, 65 table games, and a 15-table poker room. Rivers is already establishing itself as a poker destination, holding a wildly successful tournament last month. Like Tioga Downs, Rivers hit peak revenue of more than $13 million in March. However, last month was the worst one yet for the property, dropping below $11 million in gross gaming revenue for the first time. del Lago Casino The top performer of the trio is del Lago casino. It is substantially larger than the competition, with over 2,000 slot machines and 90 table games. While del Lago has Rivers outgunned in terms of offerings, the revenue differences are minuscule. On average, del Lago is taking in $12-$13 million in revenue each month, coming out only a couple hundred thousand ahead of Rivers each month. The real question now is what will happen when Resorts World Catskills opens next March. Will it give a boost to the casino economy? Or will it take revenue away from the existing competition?
1 New amendment targets Amaya, PokerStars
2 Is David Baazovs questionable contribution to Cuomo involved?
3 Online gamblings uphill battle is much steeper The New York online gambling bill is already on life support, but a new amendment could be the death knell for regulation hopes in 2017. The state Senate recently amended the bill to include a bad actor clause. As a result, the bill is even more divisive and stands little chance of passing. New amendment targets Amaya, PokerStars The bad actor amendment is always a sticking point in online casino legislation. The point of these clauses is to exclude or punish companies which operated in any illegal offshore gambling. The amendment to the NY bill, S3898, wants to exclude those who: To put it simply, no PokerStars allowed. While the online poker giant settled its Black Friday charges with the Department of Justice, it still offered wagering to US residents after 2006. As a result, the sites parent company, Amaya, will almost certainly lobby against the legislation. Is David Baazovs questionable contribution to Cuomo involved? Last month, news broke that former Amaya CEO David Baazov allegedly contributed $25,000 to Gov. Andrew Cuomos campaign illegally. The following year, legislators dropped the bad actor clause from the years push for online gambling. It is possible the new clause is an attempt to reiterate Cuomo and other New York politicians are not under Amayas control. It is also possible other casinos leveraged the news to pressure lawmakers into adding the amendment. Whatever the case may be, the end result is Amayas position to influence legislation is compromised after this news. While this may reduce their ability to fight the bad actor clause, it also reduces its ability to help push the bill through, should they choose to do so. Online gamblings uphill battle is much steeper Before the amendment, the bill was already drawing thin. The bill got out of committee last moth, then stalled on the Senate floor. Senators can call the bill for a vote at any time. However, lawmakers typically will not call for a vote unless they know it will pass. Last year, a similar bill passed by a 53-5 margin. The Senate included gambling expansion in its budget, but the Governor and Assembly did not. In fact, prior to the amendment, the real hurdle for the bill appeared to be the Assembly. With the new, contentious amendment, the chances the bill gets out of the Senate now seem slim. Moreover, the Senate adjourns at the end of the month. In addition to facing a tougher road to passing, it also has less and less time to work with.
Proponents of internet gambling regulation in Pennsylvania were treated to some hope that an iGaming bill could still pass the legislature this year. Report: iGaming-only bill possible A story at EGR North America (paywall) revealed the first concrete indication that an internet gambling measure could be a part of budget talks in Pennsylvania. Democratic governor Tom Wolf and the Republican legislature have been at an impasse in negotiations for more than five weeks now. There has been little common ground between the two sides, as they have disagreed on just about everything. That includes how much to spend in the budget, to what to spend it on, how to pay for the budget and how to trim a deficit in excess of a billion dollars. But the EGR report provided a glimmer of hope, saying as the budget talks have progressed, the bulk of the proposed gaming reforms have reportedly been scrapped, apart from egaming. The story was otherwise bearish on the prospects of a regulatory bill passing, but it is positive in that an iGaming measure isnt off the table. As politicians struggle to find revenue streams that they agree on, allowing iGaming and taxing it seems to be a point that the two sides could advocate to generate revenue. Stripping it down to just internet gambling There had been five pieces of iGaming legislation introduced and considered in the state legislature, but all of those have had gaming elements that affected brick and mortar casinos, as well. Those measures were largely more contentious than iGaming, although there are questions about implementation and the tax rate. The topic of internet gambling has stayed out of the political theater surrounding the budget impasse. The fact that iGaming is now a possible standalone concept increases its chances of passage. However, several casinos in the state had earlier opposed legislation that only dealt with internet gambling and removed other issues from the table. Representative agrees that online gambling is alive Rep. John Payne the chair of the Gaming Oversight Committee in the state house and one of the authors of the aforementioned bill backed up the assessment that online gaming is still in play in Pennsylvania. More from Card Player: Penn National Gaming, in its earnings call last month, seemed bearish on the prospect for iGaming in 2015, but even their executives didnt shut the door entirely. While Pennsylvanias budget remains up in the air, it appears that pretty much everything that could be a point of compromise between Democrats and Republicans likely remains in play. What remains to be seen is whether online gambling can be one of those things that the two sides agree should be a part of a revenue package moving forward.
Pennsylvania State Senator Sean Wiley is seeking cosponsors for a proposed bill that would reform a number of gaming laws in the state, as well as legalize online poker. Wileys proposal is all encompassing, and contains several controversial policy points that are currently being debated in the state. However, online expansion seems to be the central component of his plan, and his online gaming ideas are quite problematic. If it gains any traction, the bill will likely be discussed at a tentatively scheduled gaming hearing in the state senate CERD Committee on June 10. Bill would legalize online poker but not casino games Wileys legislation would only legalize online poker in Pennsylvania. This will put his proposal behind the eight ball from the outset, as the states primary reason for online expansion is revenue, which is mainly generated through casino games, not poker. For instance, in New Jersey online casino revenue was triple the amount of online poker in 2014, a split that has grown to 80/20 in recent months. Poker-only legislation would be a hard sell to a state legislature looking to find revenue in order to keep Governor Tom Wolfs plans to raise taxes at bay. Archaic tax rate and licensing fee More concerning are the numbers Wiley uses. I am proposing a $500,000 online gaming license fee and a tax rate of 36% on online poker revenues, Wileys proposal states. Both of these numbers are way off, as the lack of upfront licensing fees diminishes the skin operators have in the game. It would also fail to give the state enough capital to do the regulatory grunt work. The tax rate alone would make it extremely difficult for operators to compete against unlicensed sites and turn a profit. The current proposal supported by analysis from the iGaming industry (and the numbers present in Representative John Paynes HB 649 online gaming bill) calls for comprehensive online gaming expansion, a $5 million upfront licensing fee, and a tax rate of 14%. Wileys numbers look more like proposals from several years ago, prior to Nevada, Delaware, and New Jersey legalizing online gambling. Fear of RAWA Generating revenue doesnt even appear to be the impetus for Wileys call for online poker legalization. Wileys online poker proposal appears to be more of preemptive strike against potential federal legislation. This would effectively grandfather Pennsylvania in should there be changes to federal law re: online gaming, Wiley states. Effectively, online pokers rollout would be in a holding pattern under Wileys plan. My proposal would allow the PGCB to authorize online poker only after conducting a study to determine the impact online gaming would have on existing brick and mortar casinos, Wiley writes. Not a serious effort on the iGaming front The decision to go poker-only, the exorbitant tax rate and piddling licensing fee, the fear of RAWA passing, and the call for a study of online gamings impact on brick and mortar casinos are clear indications that Senator Wiley has not put a lot of time or energy into studying this issue. Anyone who has examined regulated online gaming will dismiss his proposal as an amateur attempt. The one saving grace The one aspect of Wileys plan that could be used in a more serious online gambling bill is the creation of a casino reinvestment fund. The first $10 million of online gaming tax revenues would be used to fund a casino investment grant program for a five-year period, Wileys proposal reads. Other toxic issues As noted above, the bill is far-reaching and attempts to reform several areas of gaming all at once. Some are popular ideas, but some are hot button issues likely to derail Wileys bill even if his online gaming proposal was overhauled. 7 year moratorium on remaining licenses With the state still sitting on a fourth casino license (and another Category 3 license available in 2017), Wiley would like to put a seven year freeze on further development. Regardless of where you stand on further land-based casino expansion in Pennsylvania, calling for a seven year moratorium seems like a hyper-reactive stance. Wiley also wants to make the remaining Category 1 casino license, which would be awarded no sooner than 2022 under his plan, made available to racetracks. Tracks would also be given priority over a non-racing applicant. Remove prohibition on owning more than 1/3 of a second casino Even though he notes this anti-monopoly has been effective, Wiley wants to change the existing law on ownership restrictions, to account for, the changing nature of the gaming industry, which he claims could make this provision problematic in the future in the event the number of viable operators decreases. Legalize fantasy sports competitions at brick and mortar casinos Wileys proposal would legalize brick and mortar fantasy sports contests at Pennsylvanias casinos. Changes to liquor laws Wileys legislation would allow casinos to purchase for a fee of $250,000 with an annual renewal fee of $50,000 a special permit that would allow them to adjust the hours they sell and serve alcohol, currently 7 AM to 2 AM. The permit doesnt extend the total number of hours liquor is available, just which hours its available. Casinos would also be able to offer free drinks to any patron, not just those playing slots or table games. Changes to the hours of liquor availability in casinos is a major point of contention in Pennsylvania.
Pennsylvania is considered the quintessential battleground state when it comes to presidential elections, but the Keystone State is fast becoming the battleground on another front as well, online gambling expansion in the United States. While the anti-online gaming crowd can wage its war each and every time a new state explores iGaming expansion, Pennsylvania is starting to look like a must-win for the pro-legalization side, at least in the near term. Why 2015 and Pennsylvania matter If Pennsylvania passes an online gambling bill in 2015, it has the real potential to relight the fuse in other locales that were once strong contenders but more recently have shied away from iGaming. It could also cause New Jersey to reexamine entering into an interstate agreement with Nevada and Delaware. If Pennsylvania cant get a bill passed this year, it pushes not only itself, but likely every state back a year. In that event, other states will almost certainly continue to take the wait and see approach, particularly if New Jersey continues to remain independent and the markets in the U.S. remain small and balkanized. With so much on the line it should come as no surprise that Pennsylvania newspapers have been alight with online gaming op-eds and polling data extolling the virtues of and condemning the ills of online gaming. CSIG chimes in The first op-ed salvo in Pennsylvania came from a familiar voice in the anti-online gambling movement, former Arkansas Senator Blanche Lincoln, which PennLive.com ran on May 15. Lincoln, a CSIG (Coalition to Stop Internet Gambling) co-chair, was last seen spouting nonsense on FOX News Huckabee and spent most of her PennLive op-ed to emit faux anti-gambling talking points that have become the former Arkansas Senator turned lobbyists calling card since she hitched her lobbying wagon to Sheldon Adelsons anti-online gambling group. Lincolns op-ed was simply a rehashing of several previous columns penned by CSIG (virtually every point having been debunked) and didnt receive much attention. Lincolns words likely rang hollow in Pennsylvania, where she is basically seen as nothing more than a paid lobbyist with no Pennsylvania connections throwing in her two cents where its not wanted. Bill sponsors make the case for legalization As is often the case when a newspaper prints an op-ed on a divisive issue, it allows for rebuttals, and the rebuttal PennLive.com printed was written by people with a lot of skin in the game, the sponsors of Pennsylvanias online gaming bill HB 649. Representatives John Payne and Nick Kotik penned the most significant op-ed on the subject in a May 27 op-ed in PennLive.com, which as this column demonstrates is quickly becoming the preferred theatre of war for dueling op-eds and opposing polling data. You can find breakdowns of the strongly worded Payne/Kotik op-ed here, here, and here. Editorial boards jump into the PA online gambling fray The newspapers themselves are also lining up and picking sides. In addition to the Payne/Kotik op-ed, the Penn Live editorial board has come out in favor of legalization. On the other side is the Delaware County Daily Times, which posted an editorial against online gaming, as did the Times-Leader. Polls on top of polls on top of polls In addition to the editorials and op-eds, Pennsylvanias newspapers have also been filled with polling data commissioned by both sides of the online gaming fight, which surprise, surprise, produced diametrically different results. The first poll appeared in early May, and purported to show Pennsylvanians were staunchly opposed to online gambling regulation. This poll was commissioned by CSIG, and a deeper look into the polling questions revealed some serious flaws in the methodology of the polling company, Harper Polling, which both Nate Silver and Nate Cohn have questioned in the past. As OnlinePokerReport.coms Chris Grove found, asking the same basic question but removing all of the extraneous statements about the ills of online gambling led to quite different results. In addition to Groves findings, a later poll commissioned by Caesars Entertainment, one of the companies pushing for Pennsylvania to legalize online gambling, showed support for regulation among the states residents. Ramifications Considering the amount of attention Pennsylvanias press is giving this issue, its a safe bet that online gambling isnt simply being talked about in the legislature. This appears to be the real deal, and online gambling is likely to be a major conversation in the legislatures budget talks. It also lends a lot of credibility to the buzz from inside the gaming industry surrounding online gaming expansion in Pennsylvania.