It could be years before the first shovel breaks ground on any of the three proposed downstate New York casinos. Yet, the business of casinos already has money flowing as competing camps lobby to win one of the highly sought-after licenses.
According to an investigation by Politico, lobbying firms behind 10 proposed casinos have already earned at least $7.2 million acting on behalf of operators like Caesars Entertainment and Bally’s Corporation.
Bonus counts 11 possible downstate New York casinos that may be active in the New York State Gaming Commission (NYSGC) siting process. However, the commission hasn’t yet named any of the applicants participating in the licensee selection procedure.
Meanwhile, Politico‘s public records analysis also found that some lobbyists represented multiple competing clients.
Indeed, the money reported is only a fraction of the money spent.
New York’s downstate casino hopefuls are also dropping unknowable amounts of money on strategy, consulting, and public relations. And those deals don’t need to be reported, unlike lobbying contracts.
As a result, some worry the combination of brutal competition, big money, and the need for political sign-off could create the ideal conditions for corruption.
Casino Lobby Benefits From Backing Downstate Casino Bids
“It seems like every lobbyist in town is eventually going to have a casino client,” Manhattan Borough President Mark Levine told Politico in an interview.
He added:
Even one of these bids will probably be amongst the hardest-fought public campaigns, and to have 10 happening at the same time in New York City is just totally unprecedented. I don’t think New York City has ever seen anything like what we’re about to witness as the bids heat up.
To that end, the state opened the licensee selection process for downstate casinos in January, almost nine months after Gov. Kathleen C. Hochul signed a budget accelerating the downstate casino process.
Many favor existing “racinos” in Yonkers and Queens to win two of the three licenses and expand existing operations. That leaves at least eight others vying for the sole remaining casino permit.
However, reporting from Bonus notes that NYSGC Chairman Brian O’Dwyer has repeatedly said that no such decisions have been made. He’s said during commission meetings that it’s a “tabula rasa.”
New York can expect to win big regardless of who gets the licenses. Each successful bidder will pay a mandatory $500 million licensing fee for the privilege of doing business in the state.
In the meantime, lobbyists and consultants are cashing in early.
Casino Lobby Weaves Tangled Web of Influence
According to the Politico piece, Genting Group has shelled out at least $2.7 million lobbying to expand its Resorts World property in Queens.
That’s more than any bidder, but the Malaysian-based company is well-positioned to land one of the three permits. Influential Queens politicians have already supported expanding Genting’s Aqueduct Race Track property.
Additionally, Resorts World already employs members of the politically powerful Hotel and Gaming Trades Council.
MGM Resorts International, which runs the Yonkers raceway’s Empire City Casino, is the other potential shoo-in.
That said, neither is guaranteed to be selected for the full licenses.
Records show that Moonshot Strategies, one of Genting’s lobbyists, has invoiced its client $350,000 so far.
Of note, Moonshot launched after its cofounders backed Eric Adams’ mayoral campaign to the tune of $7 million. New York City Mayor Adams is one of several elected officials who may have influence in the downstate New York casinos selection process.
Recently the New York Post reported that Adams’ office is reviewing zoning laws to ensure any changes needed to adhere to ensure the state casino approval avoids a zoning roadblock.
However, the mayor has no final say on where the casino lands.
In any case, Moonshot’s Jenny Sedlis and Jason Ortiz raised the money to support Adams’ 2021 run.
In addition to Genting, the Moonshot duo is lobbying for Mets owner Steve Cohen’s competing casino project. Also, the pair reportedly benefitted from two other proposals: Rivers Casino & Resort in Schenectady and Bally’s in the Bronx.
Again, records show Cohen, expected to partner with Seminole Hard Rock on a build near Citi Field, has paid Moonshot $182,000.
Notably, Moonshot is only one of seven agencies schilling for Cohen. Altogether, he’s spent a minimum of $685,390 pursuing one of the licenses for the downstate New York casinos.
Tight Competition, Big Money an ‘Absolute Petri Dish’ for Corruption
Unraveling the tangled web of downstate New York casino relationships requires the skills of a detective and a well-appointed string board.
Politico found Cohen’s other firms include Dickinson & Avella and Hollis Public Affairs, which previously worked with Genting.
Similarly, Hard Rock, which would operate the casino, hired Tusk Strategies and Actum LLC. The latter is also providing public relations services to Genting.
And that’s just the tip of the iceberg.
The vast machine propping up the individual casino bids has approached nearly every player involved in reviewing or evaluating proposals.
For example, the firms pushing Cohen’s proposal lobbied state gaming commission members, state legislators, and city councilors. That includes Mayor Eric Adams’ top aides, the Metropolitan Transportation Authority, and Queens Borough President Donovan Richards, among others.
“Massive amounts of money are pouring into the political system to try to influence these siting decisions,” John Kaehny, executive director at the watchdog group Reinvent Albany, told Politico.
Kaehny added:
It’s an absolute petri dish for pay-to-play corruption and influence peddling.
US Casino Legislation Has Seen Scandals Before
Significantly, there’s no suggestion corruption has occurred in New York.
However, as Politico pointed out, US casino legislation has seen pay-to-play scandals before.
In Alabama in 2010, the state indicted a group of state senators, lobbyists, and pair of casino owners. Charges stemmed from a scheme to exchange favorable gambling votes for campaign donations.
Similarly, Illinois’ convicted impeached former Gov. Rod Blagojevich of multiple crimes, including an attempt to extort a racetrack owner in exchange for votes.
Finally, former Louisiana Gov. Edwin Edwards went to jail for racketeering, conspiracy, and extortion over licenses awarded a decade earlier when the state sanctioned riverboat gambling.
However, while lobbying for Cohen, Moonshot’s Ortiz and Sedlis brought in $80,000 working with Bally’s. And last month, the casino operator announced it would join the New York licensing process with plans to develop former President Donald Trump‘s Bronx golf course.
According to records, the contract ends at the end of March. However, Ortiz told Politico that Moonshot terminated the deal in February. Additionally, despite an agreement between Moonshot and Rivers Casino in Schenectady, Ortiz said the former would not advise the latter on its downstate bid.
Of course, Moonshot is not the only company that may be double-dipping.
Several Lobbyists Possibly Linked to License Applicants
Records show Bally’s and Genting paid Ward Strategies $70,000 and $336,000, respectively. Peter Ward, the firm’s founder, previously led the hotel workers union.
Additionally, Albany State Capital has made $420,000 working on Genting’s potential project and $140,000 on Bally’s during the same period.
Neal Kwatra, another veteran of the hotel workers union and founder of Metropolitan Public Strategies, confirmed MPS is also on both proposals. However, these earnings are not public as the fees are for strategic consulting, not lobbying.
Ward, Kwatra, and Allison Lee, who leads Albany Strategic Advisors, have worked with Genting long before the casino bidding process. All three declined to comment on Politico‘s findings.
Of course, that’s not all.
Genting paid Bolton St. Johns firm $120,000, while Bolton also worked on Caesars’ Manhattan bid.
That proposal partners the Reno-based operator with commercial landlord SL Green and Jay Z’s Roc Nation on the swank Times Square property.
Caesars’ other backers engaged four additional partners for a minimum payout of $736,871.
Connected Strategies and Ostroff Associates are on the hook for lobbying, while Oaktree Solutions and BerlinRosen provide consulting services. For added context, Frank Carone, Mayor Adams’ recently departed City Hall chief of staff, heads Oaktree.
Even Well-Known Casino Opponents a Lobbying Target
State Sen. Liz Krueger, representing District 28 in East Manhattan, is a well-known casino opponent.
Still, the senator has been a target of lobbyists schlepping PowerPoints and building plans for bidding clients for several months.
Krueger took the meetings but told Politico she struggled to understand why anyone thought she was a good target.
“I’m pretty well known to just be anti-gambling, period,” she explained. “So I’ve even asked why they’re wasting their time.”
Krueger’s account is among many in an elimination match involving New York’s most powerful politicos.
And the prize is an opportunity to build one of the world’s most expensive casinos in one of the world’s greatest cities: New York.
The profit potential is so high — real estate firm CBRE estimates up to $2 billion a year in revenue and $600 million in profit — competitors are spending to boost their odds.
In fact, bidders have spent upwards of $736,871 to convince Manhattan representatives like Krueger, despite their pessimism.
And despite the challenge of getting local politicians onside, the Caesars/SL Green bid has tough competition.
Related Companies — developers of Hudson Yards on Manhattan’s West side — is prepping a proposal of its own with the help of Tonio Burgos & Associates. The proposal includes a 1,500-room resort, 20 restaurants, a theatre, and a nightclub.
Related’s CEO Jeff T. Blau has called the development “the highest-end casino probably ever built.”
So far, records show Burgos has received $140,000 from Related’s coffers. Additionally, Related’s partner, Vegas’ Wynn Resorts, engaged lobbyists Mercury Public Affairs and Empire Consulting Group to the tune of $192,000.
Related also has an in-house lobbying arm, so the company’s total spending is likely higher than the public record.
Lobby Is a Symptom of Unbelievable Money at Stake
Another state senator voicing skepticism around a Manhattan casino is Sen. Brad Hoylman, whose district covers Hudson Yards.
Hoylman told Politico:
Casino operators have hired some of the best in the business up in Albany; it’s understandable given how much money is at stake.
In my mind, no amount of hard sell from a lobbyist or a casino operator is going to trump the local opinion of my communities, where several of these casinos have been slated.
However, according to College of Charleston economist Douglas Walker, sometimes the temptation of a hard sell can be too much.
Walker authored a 2013 paper linking political corruption and casino legislation. He told Politico:
Any time you have a situation where there’s restricted supply and you need the blessing of politicians or bureaucrats, there’s potential for corruption.
The more valuable the right to operate, the more you would expect those things to go on.
Lobbying and donating to politicians is not illegal when done by the book. However, sometimes there is more happening behind closed doors, Walker added.
If there are legal contributions to politicians, there’s also the potential that there’s stuff going on under the table.
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