Edward Mangano: Taxpayers get benefits, no “burden of new costs”
The State Gaming Commission has approved a deal between Nassau Regional Off-Track Betting Corp. and Genting New York LLC, which operates Resorts World Casino at Aqueduct, providing the county with $26 million in revenue over the next three years, officials said.
The Commission approved the agreement Tuesday after a nearly two-month review, said spokesman Lee Park.
The deal, passed by state lawmakers in April, stipulates that Genting will pay OTB $9 million by the end of 2016; $9 million in 2017/18 and $25 million every year afterward. In exchange, OTB transfers its authority to host 1,000 video slot machines to Resorts World.
OTB gives Nassau $3 million in 2016 as part of the deal, $3 million in 2017/18 and $20 million every year thereafter, according to Adam Barsky, chairman of the Nassau Interim Finance Committee, a state oversight board in control of the county’s finances. Barsky, who has been briefed on the plan, said he wants OTB “to get to a break even point” so that it could eventually provide the full $25 million to the county.
Nassau OTB chairman Joseph Cairo said the Genting revenue, combined with savings from new voluntary retirement incentives for agency employees and refinancing the Race Palace building in Plainview, should allow OTB to “break even in seven years.”
Cairo called the Genting deal critical for the agency’s “survival” and said it will allow OTB “to generate revenue for Nassau for years to come.”
Genting spokesman Michael Levoff said the agreement allows Resorts World “to embark on an ambitious expansion project, which will mean more jobs and greater opportunity for our local community.”
Newsday filed a Freedom of Information Law request with the commission in August for both the agreement and a plan submitted by OTB stipulating how it will eliminate $12 million in agency debt. Park said the request is still under review.
OTB receives $5 million next week as part of the deal and another $4 million by year’s end, Cairo said. Beginning in April 2017, Genting will make $750,000 monthly payments to OTB, totaling $9 million for the year. In April 2018, or sooner if the video slot machines are in place, Genting will send OTB monthly payments of just over $2 million, or $25 million annually, with the amount adjusted for inflation.
County Executive Edward Mangano said the deal is “good news” for taxpayers who receive “new dollars without the burden of new costs.”
If Genting is delayed in installing the video slot machines, the $25 million payment gets deferred until no later than April 2019. In that situation, OTB receives $9 million.
If Resorts World receives approval in the coming years to open a casino with table games, OTB can renegotiate the deal to increase their revenue percentage, according to sources familiar with the deal.
But if gambling revenue at Resorts World drops by more than 10 percent — or if a casino opens within 65 miles of Aqueduct and Resorts World is not permitted to operate its own table games — Genting can renegotiate the deal to reduce its payments, sources said.
Cairo said OTB will use the Genting payments to pay off the balance of a $3 million short-term note, originally due in March, to a Manhattan investment bank. OTB made a $1.7 million payment in July after the sale of its Farmingdale branch building, and now owes $1.3 million, Cairo said.
OTB ended 2015 with a deficit of more than $7 million.
Nassau and Suffolk received state authority to operate up to 1,000 video slot machines in 2013. But Nassau was unable to find a location willing to accept a gambling parlor.