I have no idea what's going on with gambling in New York state, and, believe me, I've tried to find out.

After spending two days in the state capital talking to two dozen people and attending the first New York Gaming Summit, all I can say is that this is a place that tends to make up the rules as it goes along.

To give you some idea of what we're dealing with here, no one can be sure of the exact date when the New York Legislature actually legalized gambling. That's because they did it in the middle of the night--either late on October 23 or the wee hours of October 24--and they had no debate. The bill was worked out in secret, slapped onto the desks of the legislators, and the governor issued a "message of necessity" so that they could waive the normal three-day waiting period. Thirty minutes later and-- voila!--casinos! slot machines at race tracks! new lotteries! All this in spite of a specific clause in the state constitution that prohibits casino gambling. And, in fact, the state is currently being sued to have the new law declared unconstitutional.

Given this less than auspicious start--and the glaring silences in the enabling legislation--it's not clear what they were trying to do. The only reason they gave for the haste was the tried-and-true "Nine Eleven."

"During my 20 years in elective office representing the Albany district," says Michael J. Hobloch Jr., a horseman who is current chairman of the New York State Racing and Wagering Board, "the opinion polls on gambling were always 45-55 either way. But in October 2001, circumstances came into play that made it possible."

In other words, New York needs money. And after years of saying they did not want to become the next Atlantic City, they decided overnight that gambling was the best way to get that money. But what kind of gambling? Where? When? It's anybody's guess.

But I'll take a crack at it. Here's what I do know:

First of all, massive casinos similar to Foxwoods in Connecticut are coming to New York state.

Will there be enough of them to challenge Atlantic City? Probably not. In addition to the two casinos that already exist-- a tiny Mohawk casino on the Canadian border and the popular Turning Stone Casino run by the Oneida Indians near Syracuse--the legislature has authorized six more casinos. But they're gonna be spread out all over creation, all the way from the Catskills--a one hour drive from New York City--to Niagara Falls in the far west.

Exactly who will run these casinos? Interesting question. The legislation specifically assigns three of the six casinos to the Seneca Indian tribe. Why they would single out Indians, when they could just as easily have opened up the market to everyone, apparently has something to do with old promises made to the Senecas, plus the hope that if they dole out enough casinos to various Indian tribes, those tribes will drop their land claims against the state of New York.

So the Senecas just ratified a 14-year compact that will allow them to build casinos in downtown Buffalo and in Niagara Falls on the Canadian border, with the possibility of a third casino later on to be located on their tribal lands.

The other three casinos will be in the Catskills, the old "Borscht Belt" that has been declining for three decades and is eager to have anything that will bring back the tourists. All the new law says is that the casinos have to be run by Indians, but it doesn't specify which Indians.

The St. Regis Mohawks were highly visible at the Gaming Summit, joined at the hip with executives of Harrah's, the 28- casino chain that has invested in several Indian joint ventures. The Mohawks and Harrah's have already purchased the old Kutsher's resort in the Catskills, and they regard it as a fait accompli that one of the casinos will be theirs.

The Oneidas are not ruling out seeking one of the Catskills sites, and there's even an Oklahoma tribe that will be applying for a compact. (Although nothing in the law says that the Indian tribe has to be based in New York, all the New York tribes are adamantly opposed to any Oklahoma interlopers showing up here, so it's not considered very feasible politically.)

What are these casinos going to be like? Since they will be the closest casinos to New York City--the most convenient gambling for New Yorkers in more than 125 years--they'll probably be huge, lavish resorts. Foxwoods, the most profitable casino in the world, is just two and a half hours from Manhattan, so they'll have to match it or go it one better. And since Atlantic City is three hours from Manhattan and subsists mainly on day- trippers, the new casinos can be expected to rob New Jersey of many of those $100-a-day casual gamblers.

But they have one drawback. In Atlantic City you have ten casinos, and you can walk between most of them. The Catskills casinos will be scattered. If the three tribes could somehow cooperate and create a cluster in one town, it would be a grand slam and a possible new gaming mecca. That's unlikely, I'm told, because there are so many little Catskills towns who are clamoring for a piece of the pie.

But there were two more aspects to the New York gambling legislation. The first was a no-brainer--allowing the state lottery to hook up with the popular multi-state lotteries that produce the largest jackpots.

But the second was the biggest mess of all. The legislature, much to the surprise of the horse racing industry, legalized video lottery terminals at race tracks. (They're not slot machines, I'm told, although they look like slot machines and operate like slot machines.)

It's not that the tracks didn't want the machines. They've wanted them for a long time. But the legislature was so eager to justify this expansion of gambling that they earmarked 60 per cent of all income for education, without a single penny of investment by the state. That leaves the rest of the pie split three ways: 12.5 per cent to the race tracks, 12.5 per cent for the horsemen in the form of larger purses, and 15 per cent to the local government. But ALL the investment in the machines has to be borne by the tracks. That makes this the worst deal of any state that has legalized slot machines at race tracks, and may even make it impossible for the tracks to make money.

"It's a barebones legislation that's mute on a whole range of issues," says Bennett Liebman, head of the Government Law Center at the Albany Law School. "The were taken by surprise. It was at best a tertiary concern of the racing interests. Before 9/11, all the harness tracks together didn't have enough money to lease a Louisiana legislator."

This legislation, too, had several baffling elements. It specifically approved the video lottery terminals for only four tracks: Yonkers Raceway, Monticello Downs, Finger Lakes and Aqueduct. Other tracks, like Belmont Park, were specifically excluded by law. And three additional tracks can still get VLTs if they are approved by local option.

Two other provisions make it all but impossible for the tracks to make money. They're limited to 12 hours a day of operation. And ALL of the VLT agreements have a sunset provision and have to be reconsidered in three years. Considering the huge investment needed to buy, lease, service and manage a slot- machine casino, this alone could make the whole idea unfeasible.

So to sum up the curious state of things in New York:

The Indians are celebrating (some of them prematurely).

The race track owners are scratching their heads.

And the legislators--well, they don't really wanna talk about it. You have to catch them in the middle of the night.

© Copyright 2002 United Press International and Joe Bob Briggs

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