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Suffolk OTB gambles on video slots casino
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Suffolk Closeup
Suffolk OTB gambles on video slots casino

Suffolk County suddenly has gotten a major gambling casino smack in middle of the county — indeed, there’s no missing the just-opened Jake’s 58 Hotel and 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.

It was purchased by Delaware North which describes itself as a “global hospitality and food service company” and will be running it 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.

It is a high-stake gamble for Suffolk OTB. As Newsday’s 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. “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,” Newsday reported.

Suffolk OTB — indeed gambling in general in the U.S. — has hit hard times in recent decades. Much of this has to do with what is termed the “casino-saturation problem.” In 1978, only Nevada and New Jersey had commercial casinos. Today, they are in 24 states — and also, gambling on the internet 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, now that’s down to seven — with the latest closing last year, the Trump Taj Mahal.

“Atlantic City losing to Walmart-style casinos in Pa.” headed a 2013 article in USA Today. “The year 2005 was a very good year for this casino resort,” the piece began. “The eight years since? Awful! The latest figures show gaming revenue has plunged 44 percent, to around $3 billion.” It went on: “Convenience gambling and regional competition are driving the demise. Casinos with fewer amenities — dismissed recently by a Tropicana casino executive … as ‘Walmarts with slot machines and a bar and a restaurant’— have opened near major population centers.”

Jake’s 58 in Islandia, meanwhile, is not exactly a traditional casino. It is limited to video slot machines — 265 of them now and an expected 1,000 by this summer. They are electronic versions of traditional casino games. Suffolk OTB plans to ask for the state’s OK to add an additional 1,000. But this set-up might be fine for Long Islanders seeking to avoid a drive to Atlantic City or Connecticut to bet in their casinos, or a trip upstate.

How Suffolk County got a casino is an odd story. In 2014, New York Governor Andrew Cuomo sought to “reform” the Long Island Power Authority and bring in a New Jersey-based company, PSEG, to be the main utility on the island. But this was opposed by the island’s state legislators from both parties. According to sources in Albany, Cuomo pushed a deal, 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 supporting his “reform” scheme. More than half then went for it. Originally, 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, earlier 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.

Suffolk County government is, meanwhile, to receive at least $2 million in the first year, $3 million in the second and then $1 million for each of the next eight years.

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 Islandia Mayor Allan Dorman, 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 fraught with illegalities. They further complain the casino will lead to crime, increased traffic and lower property values.

Opponents of state-sponsored gambling have also long 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 the thrill of gambling — as opposed to betting — the difference being, they explained, they couldn’t afford to lose the money when gambling and this danger caused a certain “high.” They 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 yet more active.

A recent article in The Atlantic magazine related: “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.’”

Karl Grossman is a veteran investigative reporter and columnist, the winner of numerous awards for his work and a member of the L.I. Journalism Hall of Fame. He is a professor of journalism at SUNY/College at Old Westbury and the author of six books. Grossman and his wife Janet live in Sag Harbor.

Suffolk Closeup is a syndicated opinion column on issues of concern to Suffolk County residents.