Anthon 12/20/2013



Voters in New York have approved an amendment to the state’s constitution that allows the creation of as many as 7 Las Vegas-style casinos in New York State. Backed by Governor Andrew Cuomo, the bill is also known as Proposal One, and is aimed at rejuvenating upstate communities that are struggling in a sluggish economy.

Billed as a means of creating jobs in these upstate communities, the Governor also cited the state’s loss of potential revenue to gaming operations in neighboring states as a significant factor in his decision to support the amendment. In addition to creating thousands of new jobs, the 25% tax rate that would be applied to full-scale casino operations could bring the state hundreds of millions in recaptured revenue, which he says could help to fund the state’s schools and allow for tax cuts.

Proposal One works by dividing upstate New York in various non-Indian land regions, and allowing one resort casino to be constructed in some of these regions. When it was first introduced, the bill allowed for the construction of just three casinos, but was later changed to allow four, and then seven casinos to be built in upstate areas.

During the first phase of development, which will last for seven years, four upstate sites would be allowed to build class III casinos. The second phase will allow for the proposal of three additional downstate sites, with preference being given to the Southern Tier, the Capital District, and the Catskills.

Despite passing by a 57% to 43% margin, the referendum has its share of critics. Among them is E.J. McMahon of the nonpartisan Empire Center for Public Policy. Citing the center’s analysis of the impact that the casinos would have on the state, he says that the amendment would have little impact, only lowering upstate, private-sector employment by a maximum of 0.4 of 1 percent, and only increasing state school aid by a maximum of 1 percent.

Proposal One is the most aggressive one-time expansion of casino operations that the state has ever seen, and comes at a time when many of New York’s neighboring states are also taking significant steps to expand their own gaming industries. Both New Jersey and Delaware are venturing into the realm of online, real-money gaming, and both Massachusetts and New Hampshire are also examining plans to increase gambling operators in their own states. In addition, nearby Pennsylvania has grown to become the second most lucrative casino-operating state in the country.