Suffolk Closeup: County betting on casino

COURTESY PHOTO

COURTESY PHOTO

Suddenly, there is a major gambling casino smack in the middle of Suffolk County.

There’s no missing the just-opened Jake’s 58 Hotel & Casino along the Long Island Expressway. It had been the Islandia Marriott Long Island, at 10 stories with 227 rooms, a huge hotel for Suffolk.

Purchased by Delaware North, which describes itself as a “global hospitality and food service company,” it will be running the casino with the Suffolk County Regional Off-Track Betting Corporation. Jake’s 58 gets its name from the nearest LIE exit, 58, and the Jacobs family, owner of Buffalo-based Delaware North.

This is a high-stakes gamble for Suffolk OTB. As a Newsday article was headlined last month: “Suffolk OTB counts on a casino in Islandia to counter bankruptcy.” Indeed, Suffolk OTB officials are hoping the casino will generate $2 billion in gross revenue a year. That would get Suffolk OTB out of bankruptcy, which it first filed for in 2011.

Newsday reported: “Suffolk County OTB executives say Long Island’s first video lottery casino is the agency’s last ditch effort to emerge from bankruptcy and save itself — if the Islandia betting parlor can meet projected revenues,”

Suffolk OTB, like legalized gambling across the U.S., has hit hard times in recent decades. Much of this has to do with what is termed the “casino-saturation problem,” as a headline in The New Yorker put it. In 1978, only Nevada and New Jersey had commercial casinos. Today, they are in 24 states plus internet gambling has been growing.

Atlantic City was for a time the gambling mecca of the Northeast. But now nearly every state in the region has casinos. As for Atlantic City, which had a dozen huge casinos, that number has been reduced to seven. In the latest casino closing, Trump Taj Mahal went belly up last year.

Jake’s 58, meanwhile, is not exactly a traditional casino. It is limited to 265 video slot machines — electronic versions of traditional casino games — with another 1,000 expected by this summer.

How Suffolk County got a casino is an odd story filled with Byzantine maneuvering. In 2014, New York Governor Andrew Cuomo sought to “reform” the Long Island Power Authority and bring in the New Jersey-based company, PSEG, to be the main utility on Long Island.

But this was opposed by local state legislators from both parties. According to sources in Albany, Mr. Cuomo pushed a deal, which was taken to legislators by his then top aide, former Deputy Suffolk County Executive Larry Schwartz. Under it, to aid Nassau and Suffolk’s financially-strapped county governments, they would get the governor’s go-ahead to set up facilities for video slot machines in return for the lawmakers’ support of his utility “reform” scheme.

More than half of the legislators went for it. Originally, Mr. Cuomo had sought to locate new casinos only in economically depressed areas upstate.

In the end, intense public opposition in Nassau County stopped the proposed casino there, but an arrangement was made under which Nassau would receive revenue from a video slot operation in Queens.

Suffolk OTB, in sharp decline, had closed 10 of its 14 gambling locations and sold its Hauppauge headquarters. It faced strong resistance when it sought to site the video slot casino in Medford.

Then the Islandia Marriott came on the market. Suffolk OTB officials say this was a top choice all along considering its central location and, unlike Medford, the construction of a new facility wasn’t needed. The hotel could be modified to become a casino.

The small village of Islandia, created in 1985, has been promised $47 million over 20 years by Delaware North, enough to cut village property taxes by about half for its 3,335 residents, says the village’s mayor, a big booster of the casino.

But there is a lawsuit pending brought by some area residents seeking to close the Islandia operation. It alleges the village’s approval was packed with illegalities. They further complain the casino will lead to crime, increased traffic and lower property values.

Opponents of state-sponsored gambling have also charged that it hits low-wage earners the hardest, causing debt, broken families and other personal tragedies, that gambling is often addictive and government shouldn’t encourage it.

Years ago I researched and wrote an article on the Gamblers Anonymous group. Members spoke of losing jobs and relationships and becoming hooked on what became a compulsion. Gamblers

Anonymous remains active on Long Island and with a new casino here can be expected to be even busier.

A recent article in The Atlantic magazine reported: “A significant portion of casino revenue now comes from a small percentage of customers, most of them likely addicts, playing machines that are designed explicitly to lull them into a trancelike state that the industry refers to as ‘continuous gaming productivity.’”

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