Thursday, September 8, 2011

Ensuring the Integrity of Gaming in NY

The redoubtable James Featherstonhaugh made a presentation to a Senate committee recently and pleaded the case for “enhanced” gaming at the state’s existing racinos. His main point was that it makes no sense for New York to prohibit table games and other forms of gaming that are currently legal in neighboring states and Canada. He said New York is losing more than $5 billion a year as New Yorkers travel to those other venues to gamble.

It’s hard to argue with his reasoning, especially given the sorry state of New York’s economy, and yet…

We need to keep in mind the dubious history of this industry. It’s a sector that has been linked at times with organized crime. It’s a sector associated with various social ills. And it is a sector that has had far more than its share of scandals involving elected officials.

Thanks to very tight regulation and aggressive oversight bodies, some states, such as Nevada, have controlled these problems, but ethical breaches still occur. That’s why New York needs to think carefully about how it can better monitor its gaming industry.

Here’s an idea for New York policymakers to consider:

Why not create an entity in New York that would be an analog of the famed Nevada Gaming Commission? This body’s mission would be to ensure the integrity of gaming in New York. This responsibility is now split among various state agencies and oversight bodies without a single, bright-line set of rules for gaming interests to follow.

Establishing such a panel wouldn’t be difficult. You could draft someone from the State Police, the Comptroller’s Office, AG’s office and Racing and Wagering Board to staff it. You would then charge the panel with conducting a periodic reviews of the entities involved in gambling activities in New York.

Heeding the lessons that should have been learned by recent history in New York, we should ensure that the members of this review panel aren’t the friends and associates of prominent politicians, that they follow accepted oversight practices, and, most important, that they conduct themselves in the open.

I haven’t talked to Feathers about this, but I would think that he and his industry colleagues would welcome the concept, reasoning that anything that levels the playing field for honest business operators is a good thing. In fact, they probably ought to get together and pitch in the resources to adequately fund the panel.

Now some might say: Is this really needed? In answering that question, I would point to the glaring example of Aqueduct, where we are still awaiting the fallout from federal investigations of the whole AEG mess.

For these reasons and more, I think a rigorous oversight panel could help make casino gaming a better bet in New York.

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