Only politicians could subsidize and finance a profitable Slot Barn at the expense of children's education and pat themselves on the back!
Budget shifts education funds to Resorts World casino
ALBANY — Tens of millions of dollars in revenue from Resorts World Casino at Aqueduct slated for state education will instead be invested in capital spending to expand the site, according to an agreement in the 2016-17 state budget approved last week.
Assemblyman Gary Pretlow, a Democrat from Mount Vernon, estimated the award to be $40 million a year going to Genting New York LLC., which operates Resorts World.
“That would be money that should be going to education and not to Genting, which is one of the richest companies in the world, a multi-billion dollar corporation,” he told POLITICO New York. “They don’t need to take money from children of New York to build a hotel or for any other reason.”
But state and Resorts World officials insisted that in the end, the investment will result in twice the amount of money being used for the casino's growth.
“Now that we are eligible to participate in the State's capital allowance program, we will be able to embark upon a considerable expansion of our facility, which will be developed in consultation with our local community partners,” Genting senior vice president of public affairs Michael Levoff said in an emailed statement. “This investment will lead to increased visitation, more good-paying local jobs and a significant increase in overall revenue for New York's education fund.”
The group already is in the process of planning a $300 million expansion, including hotel and meetings space, according to a source close to Resorts World.
Resorts World had more than $18 billion wagered on video gaming machines in its 2015-16 fiscal year, according to the most recent data from the state Gaming Commission that does not include the final month of March. Of that, slightly more than 95 percent is paid out in player winnings and the remainder, approximately 4 percent, is divvied up among state education, the state racing industry, and the proprietor. it amounts to about $727 million, according to the recent data.
In 2015-16, not counting March numbers, Resorts World contributed more than $337 million to state education — about 44 percent of the revenues.
The state budget affects that bottom line in two ways. First, it authorizes Aqueduct to operate 1,000 of Nassau County's video slot machines, as was first reported by Newsday last week.
Under the provisions of the deal, which are not included in the budget, Resorts World will pay Nassau County Off-Track Betting $9 million in 2016, $9 million in 2017 and $25 million in 2018 and beyond, with future payments adjusted for inflation, officials said.
Resorts World currently has 5,547 “video lottery terminals,” so the addition of 1,000 more is expected to increase profits, officials said.
“It’s a win-win for everybody involved,” Assemblyman Phil Goldfeder of Queens told POLITICO New York. “Nassau County gets to relinquish themselves of having to find a place for these slot machines. No community across Nassau County could agree on where these machines should go, and Aqueduct is the perfect place," Goldfeder said. "Resorts World is the perfect partner to continue to grow the casino and grow development toward that successful entity well into the future.”
It also means no competition for Resorts World in Nassau County, Goldfeder said.
Another provision in the budget awarding capital to Resorts World had some lawmakers concerned.
When 400 machines become active at Resorts World, or by April 1, 2019, whichever comes first, 1 percent of the revenues that currently go towards education will instead go towards capital, state officials said.
That award will increase to 4 percent going forward after the total of 1,000 VLTs are put in place, state officials said.
Due to the complex calculation process it was unclear Tuesday how much money this would mean. For example, 1 percent of the current education contribution works out to more than $3 million and increases to nearly $14 million at 4 percent. If it’s based on the “net win,” meaning the revenues taken in after the prizes are paid out, those numbers jump to nearly $8 million at 1 percent and more than $30 million at 4 percent, based on the most recent fiscal year numbers.
Unlike some casinos in the state that already have this capital award included in their calculations, Aqueduct was originally awarded a flat $250 million towards capital expenditures, state officials said. To help the facility continue to develop, the new capital award was added in the state budget, officials said.
Pretlow said he didn’t mind the deal for the 1,000 VLTs, but was against the capital award.
“We’re reducing our education fund by an enormous amount. We loved the small gains that we made in education, but then to turn around and to give away $35 million every year forever out of the education fund is I think a travesty and a miscarriage and we really have to address that and take it away,” Pretlow said.
Morris Peters, a spokesman for the state's Budget Division, said it would be made up as revenue increased.
“The reduction of the statutory aid-to-education percentage is more than made up for by the capital award allocation,” Peters told POLITICO New York in an email. “The goal is to increase education revenues — we wouldn't make a change with an adverse impact."
Resorts World contributed more than $1.1 billion to state education since opening in 2011, according to most recent data.
"Resorts World has to constantly innovate and improve our customer experience to remain competitive in an increasingly uncertain and crowded market,” Levoff said in the statement.
Read the Resorts World financial breakdown here: http://on.ny.gov/1SyY2Pn
http://www.capitalnewyork.com/article/albany/2016/04/8595845/budget-shifts-education-funds-resorts-world-casino
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