New York's Gov. Andrew Cuomo Should Fold His Hand on Casino Debate

New York Governor Andrew Cuomo deserves all the acclaim he has received for an impressionable freshman year running the state. His ability to close this fiscal year’s $10 billion budget gap without raising or creating new taxes and cutting spending for the first time in New York State in 16 years — as he promised in his campaign — has stamped his image as a budget warrior. On top of that, he has also been able to negotiate frugal labor contracts with New York’s largest and least compromising unions: the Civil Service Employees Association and the Public Employees Federation.

Now that Cuomo is on cloud nine and enjoying the public outcry for him to run on the 2016 presidential ticket, it is imperative that he comes as close to flawlessly closing next year’s $3.5 billion budget gap as possible. His first effort has already received raving reviews. Despite his adamant expressions of denial, he’s taken a page out of the Occupy Wall Street play book by allowing the Millionaires’ Tax break to expire, and overhauled the tax code so that millions of middle class citizens can receive tax breaks while merely 30,000 of the richest New Yorkers pay a little more. The measure, which was supported by the GOP-ran State Senate, will likely raise $1.6 billion in tax revenue.

Unfortunately, one of Gov. Cuomo’s newest proposed measures is hardly as laudable. Cuomo’s push to legalize non-Indian casino gambling in New York State is his newest attempt to raise tax revenue at the expense of exploiting the undiagnosed addictions of New Yorkers — a measure that will require a state constitutional amendment and a referendum in 2013. This backdoor tax on the hordes of middle class New Yorkers who will flood the craps tables is not the best bet for New York. There are several other feasible amendments that can naturally generate revenue without enticing big dreamers to carry their piggy banks to the slots.

On the surface, the allure of casino gambling may seem plausible. It is highly unlikely that you will ever run into anyone who thinks that job creation (although at rather low wages), tax revenue from big businesses, money for schools (which receives a significant portion of gambling revenue), and tourist attractions are a bad bet. Not to mention, New York’s Aqueduct Racino is estimated to have helped NYC raise $684 million in its first year alone.

But this is yet another classic case of a wolf in sheep’s clothing. The benefits of casinos are often overestimated, especially when the social costs are considered. For one, casinos have traditionally cut into cash that would have otherwise flown through local businesses. In Illinois, for example, an estimated $6.7 million for local businesses was lost when consumers chose to spend their cash at a new nearby casino. In NYC’s densely populated streets, as well as its image as the small business capital of the world, it seems highly unlikely that city residents will let the bill fly.

Another forewarning can be found no further than in New York’s neighbor across the Hudson. In Atlantic City, New Jersey, the outskirts of the lit-up gambling strip is saturated by high crime and poverty. Believe it or not, Boardwalk Empire is hardly an HBO cult — black markets and crime families like the Gambinos and Colombos have field days with the underground hustle that virtually follows every non-Indian ran casino. Despite its owners constant efforts to revamp the east coast “city of sin,” Atlantic City continues to lose millions in revenue a year; especially after recent competition with the Aqueduct Racino.

And, of course, there is also the more obvious and overlooked fact that problem gambling is a public health issue. When 90% of casino profits are produced by 10% of its gamblers — problem gamblers who lose sleep, use their last pennies on slot machines, spend less money on food and clothing than non-problem gamblers, suffer from mood swings and are vulnerable to other addictions such as alcohol and drugs — there is no shortage of clues that indicate that problem gambling is as real as nicotine.

Surely, the $2.8 million in “hail Cuomo” ads from the Committee to Save New York, a coalition of real-estate and banking interest which has legalizing casino gambling on its 2012 lobbying to-do-list, creates a context for Cuomo’s recent push. But it is time for the ethics maverick to rise above the lobbies and seductive casino lights for a more sensible approach to raising revenue. One elephant in the room that Albany has managed to kick out of its house from year to year is the legalization of mixed martial arts professional bouts. Apparently, the moral champions in the state legislature find the sport to be too violent for New York.

Cuomo’s sophomore year will be the tell story of his illustrious first year. If he chooses to legalize gambling in NYC, if he manages to get it passed his own Democratic base that has traditionally abhorred the measure, then he will lose some of his Democratic supporters and setback New Yorkers.  

Photo Credit: Michael Kappel