The Cuomo Administration deserves praise for new initiatives to promote tourism in New York State will be an economic and social boon, but the plan to develop three major casino gaming destinations in upstate is bad policy.
The Governor correctly recognizes that tourism is one of the best generators of jobs (it is after all a service business), is mostly clean and sustainable, brings in money to localities and small businesses without requiring ongoing outlays of tax funds to support such institutions as schools – it is in some sense “free money.” And tourism is one of the healthiest, best pursuits for mind and body, forging bonds among family members and across generations, laying the foundation for new learning, opening minds and exchanging innovations and ideas (think Marco Polo). These are documented benefits of the “Travel Effect.”
But my support for the state’s worthy promotion of tourism does not include Cuomo’s push for casino gambling upstate, which he is pushing to get done before the Legislature pulls up stakes this session.
There is a big difference between tourism and casino gambling.
Tourism is a noble pursuit upon which to base sustainable economic development. I equate tourism to clean-energy.
Casino gambling, on the other hand, is more akin to fracking and oil drilling, where the economic benefits are contradicted by the resulting damage to the environment and society. The economics of fossil fuels only exceed clean energy when you fail to include all the costs, from degradation of the environment, pollution, global warming and public health to list but a few. Ultimately, fossil fuels are economically unsustainable.
Similarly, casino gambling on its face might seem like a “positive” but not when the true costs are included in the assessment.
Let’s take the promise of jobs creation. Think about whether your dream for your child, why you expended most of your lifelong savings to send them to college, is to work as a blackjack dealer. But in most cases, the people who work in casinos are not “locals” at all, but are imported from outside the community. And the tax revenue that is projected to be generated is countered by the higher costs of such things as police security and impact of traffic. Instead of supporting local businesses (including the small, established inns, restaurants and tourist attractions), casino gaming destinations are designed to keep their guests (and their wallets) on site. And who are these companies? They are not local, but rather, big businesses. As for the revenue side, the state is not a business partner with these ventures; the “revenue” (which is tax, I presume) the state would get is that portion (not specified) after overhead, after profit and whatever else these companies do to off-shore or out-source in order to reduce their tax liability.
The casino gaming initiative is bad policy. But the tourism initiatives that Cuomo has embraced are extremely worthy.
Tourism sustains heritage and history because it provides an economic foundation. This is as true for preserving the heritage of aboriginal communities as it is for preserving historic homes and art collections, waterfalls and river towns.
Cuomo wisely recognizes the importance of travel and tourism as an engine of economic growth and jobs creation – when not all politicos do. Tourism is a particular boon to small businesses and has provided a path to the American Dream for minorities and women at a pace that exceeds just about every other enterprise. Tourism has breathed new life into communities blighted by obsolete industries – shuttered factories become restaurants and indoor shopping malls, railroads become bike trails, and grand homes are turned into museums, galleries and hotels.
Tourism is the fifth largest employment sector in our state, supporting 714,000 jobs and generating $29 billion in wages in 2012. One out of every 12 jobs in New York is tourism-related. The 202 million international and domestic visitors who visited the Empire State last year generated $57 billion in direct tourism spending and $7 billion in state and local taxes.
In May, Governor Andrew M. Cuomo hosted New York State’s first Tourism Summit to hear ideas from industry leaders, business owners and other stakeholders to help ensure that the tourism industry continues to grow and create jobs in New York.
Significant initiatives came out of that summit, including a plan to spend $60 million in tourism funding, the highest in decades and up from $19 million last year; a new $2 million “I LOVE NY” marketing campaign promoting travel upstate partnered by the Port Authority and MTA; a new NYS Sports and Special Events commission to enable the state to compete in the $600 billion global sports tourism industry; new welcome centers at the border and interstate crossings, which have the impact of inspiring more visits to attractions and longer visits; a new International Tourism Campaign: From Asia to South America to spark travel from overseas, particularly China and Brazil; new I LOVE NY Visitors Center in Times Square, through a deal with the Times Square Alliance; and I LOVE NY LGBT niche tourism initiative to market NYS to the LGBT community, which accounts for approximately $70 billion in tourism spending in the U.S. every year.
These are worthy initiatives. But Cuomo is pushing to open casino gaming destinations upstate as their “Promised Land” to revitalize their economies, so far stubbornly resistant to the various strategies and attempts, and is pressing the State Legislature to adopt the legislation before the end of this session so that a referendum can be put to voters by the fall:
Cuomo’s plan details a non-political independent process for the siting of resort gaming destinations, new specific criteria for selecting the gaming operators, and a breakdown on the distribution of revenue in a way that benefits multiple localities, counties and the State. Under the Governor’s plan, upstate New York would be divided into six regions, and three resorts would be bid out with only one resort eligible to be located within a region.
“Our state has a unique opportunity to revitalize the local economies of communities in Upstate New York and create thousands of new jobs where they are needed most,” Governor Cuomo said. “For years neighboring states like Connecticut and New Jersey have benefited from New Yorkers leaving our state to visit their gaming facilities. We want to reverse this trend by putting new resort destinations in Upstate New York, a strategy that will attract more tourists and visitors to come and shop at our local businesses, visit regional attractions, and help create new jobs in our communities. This proposal sites gaming resorts through an independent, non-political process, to fairly and strategically capitalize on the enormous potential gaming has for growing our state’s economy.”
In making his case. the Governor’s office detailed the economic impact and jobs potential of resort gaming:
In New Jersey, an estimated 35,500 direct jobs are associated with gaming, and a Rutgers Study estimated over 100,000 indirect jobs.
In Connecticut, there are an estimated 14,600 direct jobs, and more than 16,400 in Pennsylvania.
The Foxwoods Resort in Connecticut alone employs more than 8,200 people and generates $165.5 million in revenue to the State.
Here in New York, Resorts World, which does not offer full gaming and has no hotel, generates $306 million in revenue to the State while employing 1,750 people.
The impact crosses over to the many small businesses supported by gaming resorts. In New Jersey, gaming resorts spend an average of $2.3 billion annually with over 2,000 independent vendors operating in every county in the state – including transportation companies, food vendors, and professional services.
The plan also sounds well intentioned, hitting all the high notes that if you look between the lines are intended to answer the key objections to casino gambling, such as the close involvement of connected real estate and gambling concerns that would profit, the cost to local communities, and so forth.
Here’s how the Governor’s plan intends to answer these issues:
Locations for Resort Gaming Destinations: Three resorts would be bid out in upstate New York. Under the plan, upstate New York would be divided into six regions. Only one resort could be located within a region.
Indian Gaming: Three regions in the State have Indian gaming. An Indian Nation with a zone of exclusivity would have that zone honored by the state when siting new resorts, as long as the compact between the nation and the state is in good standing. If the compact is not in good standing, the region would be eligible for a commercial (non-Indian) gaming resort.
Evaluation Criteria for Selection of the Resort Gaming Destinations will include number of jobs; amount of capital investment (expected floor of $250-$500 million); amount of projected revenue to states and localities; local support (Home Rule); amount of franchise fee; and vision for development and integration with regional tourism.
In addition, a series of added evaluation criteria will include: immediate and full financing available; comprehensive development approach; experience in gaming development; speed in construction/date of completion; pass ethics and integrity reviews; workforce development; labor agreement; environmental sensitivity; addressing problem gambling [the very inclusion of this provision indicates that this is a problem that is an outcome of building casinos in communities].
“The selection criteria are the minimum threshold for any project to be approved in a region, even if no competing projects are offered. Winning projects would be given a five-year exclusive period with no additional casinos cited in New York City or Upstate. Racinos would be able to compete as well, and all contracts with horse tracks would be honored. “
Revenue would be split 10% for the host community; 10% for counties in the region; and 80% for the state.
Uses of Revenue would be for state education aid above the annual formula, property tax relief, and reimbursement for local costs.
Independent Selection Commission will include real estate and finance experts, and a financial advisor will be selected by the panel. The Commission is temporary and would dissolve following completion of its work. The Legislature would not be involved in the selection process. [I can be forgiven some skepticism after seeing how “effective” commissions can be, with the Temporary Redistricting Commission here in Nassau County.]
This all sounds well and good, but I would suggest that much the same promises and protections (to keep out criminal elements, for example), were all part of the pitch in New Jersey, Pennsylvania and Connecticut. But casino gaming has not been the boon for Pennsylvania or New Jersey as promised, where casino gaming was supposed to pay for public schools, just as the New York State Lottery was pitched as generating funds to cover the cost of public education and senior programs. And yet we all still have budget crises and high property taxes. Go figure!
I would also suggest that an analysis be done of the costs associated with casino gaming, in terms of a community’s cost for police, for roads and other infrastructure, and the diversion of business from other tourism and hospitality enterprises. These totals of jobs and tax revenues that are presented are not necessarily “net” increases.
And the revenue is the portion left over after the profit to the casino operators.
Casino gaming was supposed to be New Jersey’s salvation – that’s how Atlantic City, once the most charming family destination, was turned into a seedy place which instead of revitalizing the surrounding community as promised, has only produced further decay. Casino gaming was supposed to generate the funds for the state to pay for public schools and senior programs. Tell that to the hundreds of excessed teachers and the residents still bitching about high property taxes.
Pennsylvania is the latest state to embrace casinos as their economic panacea, and when I went river rafting in the Lehigh Valley and stopped in a local town, now more of a ghost town than anything, I heard nothing but complaints from the pizza guy. Casinos did not bring business to the river operators or the local eateries, at all.
And I can virtually guarantee you that virtually none of the hoards that take the buses to Foxwoods and Mohegan Sun in Connecticut also stop into Mystic Seaport, the Mystic Aquarium or the Florence Griswold Museum in Old Lyme. It is fantasy to believe the casino destinations will support “regional tourism.” And ask the homeowners along the narrow route leading to Foxwoods how they like the gambling mecca.
Casino gaming will not help The Thompson House, a fifth-generation family-owned and operated inn first established in 1888 in Windham, NY, to hold onto its guests who come to ski or hike the mountains, take advantage of the zipline at Hunter and Windham, because casinos, like cruiselines and themeparks, do their level-best to keep guests (and their wallets) on site. And because the casinos are generally owned by big companies headquartered elsewhere (like Harrah’s Entertainment and MGM Resorts International), the profits also get exported out of state.
What is more, these new gaming destinations are deliberately placed upstate and prohibited from downstate (take that, Shinnecocks!) in order to lure Long Islanders and New York City people upstate.
The false value of casino gaming is that they have to be built from scratch – it is these dollars and these jobs that spark visions of dollar signs. But it is ultimately destructive, just as purchasing steel in China to rebuild New York’s bridges undermines US manufacturing and union jobs.
So when the Governor presents figures about how many jobs and how much revenue would be associated with casino gaming destinations, a fairer assessment would be the “net” gains – if any – after the dilution and diversion from existing tourism and hospitality enterprises are factored in and the higher costs to communities (including social work agencies to address gambling addiction).
It is almost as if Cuomo has proposed this ambitious program to promote tourism as a means to disguise the real motive: to get New Yorkers to approve casino gambling.
Indeed, his enthusiastic embrace of casino gaming – and why he is pushing for the State Legislature to adopt the enabling legislation this session so that a referendum can go to voters by the fall – is suspect on its face: Genting, a subsidiary of Southeast Asia’s largest gambling company, gave $2 million to the Committee to Save New York, a group allied with Cuomo doing all those wonderful advertisements on TV aimed at getting Cuomo’s pro-business agenda passed so that he will have a strong record to present to the electorate when he makes his move to become president.
I just got back from a relatively new Hudson River School Art Trail in which you get to submerse yourself in the same gorgeous natural scenes that the famous painters, Thomas Cole, Frederick Edwin Church, saw more than 150 years ago, in the way they saw it: hiking these amazing mountainsides.
Hudson River School painters captivated the world with their fierce desire to preserve America’s wild places against urbanization, industrialization and commercial exploitation, and raise awareness through art of the fragile balance between nature and civilization. Cole and his contemporaries captured the wild, breathtaking beauty of America’s untouched forests, mountains and rivers, laying the foundation for what would become our National Parks.
Their message then resonates resoundingly today.
Karen Rubin, Long Island Populist Examiner
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