Cuomo releases Upstate NY Gaming Economic Development Act

Governor Andrew M. Cuomo released the Upstate NY Gaming Economic Development Act Wednesday, which will establish three destination resorts with gaming in upstate New York and boost tourism and economic development in the region.

A summary of the bill's provisions is outlined below:

Locations of Destination Resorts:

• The legislation authorizes three upstate "Destination Resorts" to enhance tourism development. "Destination Resorts" will be selected only on merit by the gaming commission or a separate board to be selected by the commission.

• Upstate is divided into six regions consisting broadly of (1) the Hudson Valley - Catskill area, (2) the Capital district - Saratoga area, (3) the north country, (4) Central New York, (5) the eastern Southern Tier and (6) Western New York. Tribes with compacts that are in good standing with the state will have their geographic exclusivity honored. No "Destination Resort" will be authorized in the north country and in Central New York. If the Seneca Indian Nation does not have an agreement in good standing, the western region will be bid out for "Destination Resorts." No more than one "Destination Resort" can be located in any single region.

• No "Destination Resort" will be authorized in New York City, and no "Destination Resort" will be located downstate until a minimum of five years after the first upstate "Destination Resort" opens.

Regulation:

• The board or commission will determine the required minimum amount of capital expenditures required of a "Destination Resort" applicant in each region. There will be a minimum $50 million licensing fee. The tax rate will be 25 percent of gross gaming revenue, with the applicants permitted to negotiate increased fee payments with the board to enhance overall revenue to the state.

• The board or commission will be required to evaluate "Destination Resort" applications based on specific criteria. Sixty-five percent of the decision on siting a "Destination Resort" will be based on economic activity and business development factors, 20 percent on local impact and siting factors most especially local support of the "Destination Resort," and 15 percent on workforce and overall societal factors.

• "Destination Resorts" and all related service industries will be strictly and comprehensively regulated by the state gaming commission. The minimum gambling age in "Destination Resorts" will be 21, and no smoking will be authorized in the three "Destination Resorts."

Labor Agreements:

• Labor peace agreements will be included in the "Destination Resort" authorization process, and the statute will provide the opportunity for full minority and women's business enterprise participation in the "Destination Resort" industry.

Tax and Gaming Revenues for State and Localities:

• Ten percent of the state's tax revenues will be split equally between the host municipality and the host county. Ten percent of the state's tax revenues will go to other counties in the region where the "Destination Resort" is located to provide tax relief or educational assistance. Eighty percent of the state's tax revenues will be used statewide for elementary and secondary education. The educational aid will be additive and will not be part of the state's existing education formulae.

• If the gaming referendum passes, 10 percent of the net gaming revenue retained by the state from Indian gaming facilities shall be distributed to counties in each respective exclusivity zone provided they do not otherwise receive a share of exclusivity revenues.

Addressing Problem Gambling and Cheating:

• Funds for problem gambling will be added through the imposition of a $500 annual fee on all slot machines and table games. "Destination Resorts" will be required to develop comprehensive gambling programs, and part of the judging of who gets a "Destination Resort" will be determined by the quality of the applicant's problem gaming program. All "Destination Resorts" will be required to have exclusion policies, and the statue provides for individuals to exclude themselves from the "Destination Resorts."

• New categories of gaming-specific crime legislation are added to prevent cheating at "Destination Resorts." Cyber sweepstakes cafes are specifically made criminal.

Preventing Corruption:

• Licensed "Destination Resorts" and "Destination Resort" applicants will be banned from making political contributions to statewide elected officials, the State Legislature, and local officeholders in municipalities and counties where "Destination Resorts" are located, and candidates for these positions.

• A state gaming inspector general's position is authorized to prevent corruption at the Gaming Commission.

Agreements with Indian Gaming:

• The Oneida Nation Settlement agreement is ratified, and placed into effect.

• Two additional VLT facilities in Western New York will be authorized, but only in the event that the Seneca Nation agreement is not in good standing.