Tom Noonan

After the board charged with evaluating proposals for casinos made their recommendations in December, Governor Andrew Cuomo stepped in and decided the board was wrong, and that an additional casino should be sited.  Yesterday, New York’s Gaming Commission went along with the Governor, approving his “recommendation” in two minutes.

Discussions on government procurements are ones that cause eyes to glaze over, and I have contributed to that soporific effect with this overly-wonky piece.  Yet, the issue of casinos and the power exerted by this Governor are significant ones that should be discussed.

When New York voters approved locating up to four non-Indian casinos in upstate, they activated legislation that specified how the decisions were to be made.  The Gaming Commission has the ultimate decision on what licenses to award, but they designated a separate Facility Location Board to review competing proposals and make a recommendation.  The Board did that in December, deciding on one casino in each of three regions, but declining to award a fourth.  The Board issued its full report in February.

When the Gaming Commission first discussed making a fourth award at its meeting on February 23, the members decided they wanted to first review the report of the Facility Location Board before deciding on whether a fourth casino was appropriate.  With the report now available (on-line here), the Commission did not hesitate in approving a new request for applications (RFA).

The report is 1700 pages long.  Most of it, however, is the sort of filler reminiscent of the delusional college student who thinks the professor will ignore the lack of insight in favor of bulk.  For example, the entire RFA is included.  We even have the instructions on fingerprinting.

There is, however, a curious omission.  The December 17 recommendation of the Facility Location Board, in which they announced their choices, is not included.  In that report, they stated:

The Board has declined to select a fourth Applicant in the belief that a second competing new gaming facility in any of the regions would make it significantly more difficult for any gaming facility to succeed in that region.

You don’t have to be an expert in the economics of the gaming industry to realize there is an increasing saturation of the market that will only be exacerbated with the opening of three casinos in Massachusetts, and a proposal to open one at New Jersey’s Meadowlands.

Yet the Facility Location Board ignored its own conclusion in approving the Governor’s proposal to add a fourth site, and the Gaming Commission meekly went along, with no debate  –  let alone an acknowledgement of the Facility Location Board’s initial reticence that raised a legitimate policy question.

Most of the Gaming Commission members are appointed by the Governor;  the Commission appointed the members of the Facility Location Board.  Despite their resumes, however, they appear to be no more than compliant pawns in Andrew Cuomo’s micromanaging of every detail in his Administration.  What is particularly surprising is that none of them are paid, so it’s not as though they will be out of a job should they take an independent stance.  Of course, given the way things work in Albany, there may well be other financial considerations in play.

When the Gaming Commission set up the original RFA process, it established rigorous rules designed to ensure a decision free of unwarranted influence.  Since then, however, the Facility Location Board created a secret evaluation criterion that was used to effectively disqualify six bidders in Orange County.  Now it has reversed its own decision on awarding a fourth casino with no explanation justifying its new position.  The Gaming Commission’s two-minute consideration of this consequential matter does not exactly calm fears that this is merely a political process.

The Governor and the Commission hope that a new procurement will not just have the discredited proposal from a prior bidder, but well-financed bids from major players in the casino industry.  After the shallow and shoddy initial decision of the Facility Location Board, good luck getting the deep pocket gaming interests to have any confidence in the integrity of this process.