Former New York Gov. David Paterson Urges State to License Downstate Casinos

Posted on: November 30, 2020, 02:58h. 

Last updated on: November 30, 2020, 03:56h.

Former Democratic New York Governor David Paterson is calling on state lawmakers and his successor, Gov. Andrew Cuomo (D), to begin the bidding process for three downstate casinos.

New York casino Manhattan David Paterson
David Paterson says New York lawmakers and the current governor should allow Manhattan to begin fielding bids for a casino or three. (Image: Getty/

In a Sunday op-ed published in the Times Union, the less than one-term governor opined that authorizing the new casinos will deliver much-needed revenue to the cash-strapped state. New York’s budget deficit has only worsened during the COVID-19 pandemic. That has resulted in numerous businesses and industries struggling, and many New Yorkers fleeing the state.

“As I learned, in a time of budget distress, there are two options: Cut spending or raise revenue,” Paterson wrote. “Right now, spending cuts are not an option, as New Yorkers battle to recover from COVID-19. Neighborhoods have been decimated and need to be rebuilt.”

Instead of further taxing people and businesses, Paterson says more casinos are one reasonable solution.

We can be smart and find new revenue streams — like awarding the three remaining downstate casino licenses, resulting in an immediate influx of $1.5 billion and new union jobs,” the former governor stated.

Paterson served less than two years as governor of New York. He replaced Eliot Spitzer amid the governor’s prostitution scandal in March of 2008. Cuomo gained support among Empire State Democrats during the 2010 gubernatorial race, prompting Paterson to withdrawal his candidacy.

Lobbying for Sands

Since leaving office, Paterson has used his political ties to work as a lobbyist. He’s currently a senior advisor to Robert Goldstein, the president and chief operating officer of Las Vegas Sands. Sands has long wished to build a casino resort in New York City.

New York voters in 2013 approved of four upstate commercial casinos, and three downstate. But lawmakers placed a moratorium on the downstate casinos until 2023. The moratorium was designed to allow the upstate casinos to open without downstate competition.

Paterson says the state and Cuomo should lift the moratorium and allow companies like Sands to enter a bidding war for the coveted gaming rights. The ex-governor believes the upfront licenses will provide the state with $1.5 billion in immediate fees, and $900 million in new, reoccurring annual revenue.

Gaming Scandal

Paterson’s short term as governor wasn’t without controversy.

New York legalized video gaming terminals (VGTs) at the state’s eight horse racetracks in 2001 after the state economy suffered in the wake of the 9/11 terrorist attacks. The racetracks turned into racinos in the years after. But the Aqueduct Racetrack gaming license in Queens, viewed as the most profitable, set off a bidding war that led to alleged peddling, controversies, and years of delays.

In January of 2010, Paterson awarded the Aqueduct casino license to a firm called Aqueduct Race Track Entertainment Group (AEG). The bidding process was investigated by both state and federal authorities after allegations emerged that Paterson picked AEG because of his close friendship with Jay-Z, who held a seven percent stake in AEG.

Paterson later recused himself from the racino bidding, and the license ultimately went to Genting Group, which agreed to pay an upfront fee of $380 million. Since opening in 2011, Resorts World New York City, as the Aqueduct casino is called, has generated more than $3 billion in tax revenue for the state.