Tom Noonan

Governor Andrew Cuomo said in his budget address that “casinos are expected to be open as early as January 2015.”  This naturally delighted the operators of two existing racinos since only a facility already built could meet that time frame.  Before you make firm plans to spend next New Year’s Eve playing blackjack in Saratoga Springs, however, there are several factors that may delay the Governor’s timetable.

The first is that the Governor is not actually going to be the one making the decisions on which entities are to be awarded the four licenses available in upstate New York.  There is a five-member Gaming Facility Location Board that must conduct a competitive procurement and then make recommendations to the state’s Gaming Commission.  Nonetheless, if there is one thing the Governor is particularly adept at, it is ensuring that his appointees do what they are told and not go off exercising independent judgment.

There is, however, a law that must be followed.  This one specifies the factors that must be considered in deciding which of the bidders is going to get passed along to the Gaming Commission for their approval.  There are three general categories that are given differing weights in the evaluation process.  The category of “economic activity and business development” constitutes 70 per cent of the total evaluation.  Although “offering the fastest time to completion of the full gaming facility” is one of the permissible considerations, it is only one of nine factors that must be assessed.  Applying a simple mathematical calculation to each of the nine means that speed is worth less than eight per cent of the total evaluation.

Then there is the matter of the public’s perception of its government acting in a fair and reasonable matter, a factor that is particularly important when it comes to the freighted skepticism accompanying public procurements.  Awarding a contract  –  or, in this case, a license  –  is supposed to be open, competitive, fair, transparent and honest.  Rushing a decision to satisfy an impatient chief executive is a sure-fire way to insure that some  –  if not all  –  of those considerations will be abandoned.

Neighboring Massachusetts is now in the process of awarding casino licenses.  Its authorizing law was passed in 2011, not a mere six months ago as in New York, and its gaming body is only now deciding what licenses to award.  This follows an extensive and time-consuming consideration of the suitability of bidders, including a decision that resulted in gaming giant Caesar’s being knocked out of the process because of a tenuous connection with the Russian mob.  Despite their careful process, the widely-respected Chair of its gaming commission is now being assailed regularly for perceptions of favoritism, assertions that are not without foundation.

New York does not lack recent experience in botched procurements.  The most notable example was the disgraceful decision in 2010 by the then-Governor, then-Senate President and Assembly Speaker Sheldon Silver to award a contract for the operation of Video Lottery Terminals at Aqueduct Racetrack.  It was a decision so patently inappropriate that Speaker Silver called for an investigation (of his own decision), and Governor David Paterson reversed it six weeks following the award.

Last summer, the New York Racing Association was forced to rescind a contract award after pressure from Robert Megna, Cuomo’s Budget Director, and Robert Williams, the Acting Director of the Gaming Commission, because the award did not comply with a basic principle applicable to  government contract awards.  Ironically, both Megna and Williams now appear to be on board with their boss’ desire for a quick process. Megna’s proposed budget for the next fiscal year is counting on casino licensing fees to help balance the budget, and Williams’ office is publicly on board with Cuomo’s expedited time frame.

Then there is the Governor’s obvious disinterest in doing the nitty-gritty work of actually governing, as opposed to generating press releases and self-laudatory statements.  The Gaming Commission that is charged with making the decisions on casino licenses was created by a law signed almost two years ago.  Cuomo has five appointees on the seven-member Commission.  His appointees did not take office until June, 2013, and even after that delay he only made four of the five to which he is entitled.  (The Senate President and Speaker have yet to make either of their appointments.)  Because the law establishing the Commission requires four members to conduct any business, it is a body that is a medical emergency away from having no power.

The Gaming Commission still does not have a permanent Director even though the need for one has been known for almost two years.  Rob Williams is still the Acting Director although there is no reason to believe that he is not eminently qualified and capable of being appointed on a permanent basis  –  he just hasn’t been.  Similarly, Cuomo’s takeover of New York racing was supposedly precipitated in part by equine racing fatalities.  One of the most important recommendations to come out of a Task Force was the appointment of an Equine Medical Director for the state.  That recommendation was made to Cuomo in August, 2012.  It is only this month that a decision was finally made, and it was to the person who made the initial recommendation  –  again a person eminently qualified.

Finally, the Facility Location Board requires five three members before it can undertake its work.  On January 30, only one of the five has been appointed.  There are stringent qualifications needed to serve on the Board, and members will not be compensated.  Even though the need for Board members has been known since the law was signed on July 30, and six months in we have but a single member, the Governor is expecting this group of volunteers with significant professional credentials to drop everything to satisfy his wishes.  The Governor may not be averse to interfering in a public procurement, but Board appointees may be less willing to have their integrity questioned because of a rush to judgment.

The Governor would be much better off if appointments to the Gaming Commission and Facility Location Board were actually made, and he stopped inserting himself into a procurement process that is tightly circumscribed by a law for which he is primarily responsible.