December 26, 2008, Buffalo News: Paterson proposes extending legal gambling to boost budget

Updated: 12/26/08 07:18 AM

Paterson proposes extending legal gambling to boost budget

Critics seek risks of more addiction

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ALBANY — Faced with a rising state budget deficit, Gov. David A. Paterson is turning to a reliable source of revenues previous governors have tried: gambling.

The governor’s proposed budget for the fiscal year that will begin April 1 envisions nearly $500 million in revenues from extending gambling to bars, restaurants and racetracks. Other ideas on the table also could dramatically expand the number of places in the state to place wagers.

“It’s amazing. Here we go again,” said James Maney, executive director of the New York Council on Problem Gambling, an independent group that promotes greater awareness of compulsive gambling.

“We’re very concerned that when things get tough for state government, we’re going to make it easier for New Yorkers to lose more money,” Maney added.

Just as the state turned to a big gambling expansion following an economic downturn and the World Trade Center attacks in 2001, Paterson is eyeing all sorts of ways for gamblers to open their wallets and the state to pick up the resulting revenues from gambling losses.

In the proposed budget released last week, Paterson calls for eliminating restrictions for the Lottery’s Quick Draw game — an electronic keno game that treatment experts deride as “Crack Draw” because of its addictive ways — that had been enacted to give gamblers a built-in respite from playing.

Under the proposal, Quick Draw, now in 3,200 establishments and limited to 13 hours a day, could be played around the clock. Paterson also called for removing the provision restricting the game to establishments licensed to sell alcohol but drawing at least 25 percent of sales from food.

That potentially would open its availability to thousands of additional outlets. Another Paterson proposal would make the game permanent, instead of subject to review by the Legislature every few years.

Finally, the governor wants to lower the age restriction — now 21 — to allow 18-year-olds to play.

Longer hours for casinos

The Quick Draw changes would bring the state an additional $50 million next year and $59 million annually after that.

Paterson also wants to drop restrictions requiring racetrack casinos to operate no more than 16 hours a day and to shut down at 2 a.m.

That would allow casinos, such as ones in Hamburg and Batavia, to stay open 24 hours a day, bringing the state an additional $45 million next year from its share of the bets. The requirement that the law allowing such casinos expire in 2017 also would be eliminated and the casinos made permanent.

The governor wants to permit New York to join another multistate lottery game and possibly an international high-stakes game, which would bring an additional $11 million in revenue.

He also calls for allowing Belmont Park, a racetrack on Long Island, to have a casino with up to 5,000 slot machines. The state would receive at least $370 million for the casino development rights.

While they are not in his budget, the governor also has signaled openness to offering new electronic table games — such as roulette, baccarat, craps, and blackjack — alongside slot machine-like devices now at eight racetracks around the state. State legislators, meanwhile, are pushing a constitutional amendment to permit three non-Indian casinos in the Catskills.

The governor’s plan even would let the state’s Lottery Division engage in a little Wall Street gambling. The agency maintains a fund of about $1.2 billion that pays lottery winners who collect their money on a multiple-year basis.

It now is banned from investing the fund’s holdings in stocks and bonds, limiting it to Treasury notes. Paterson wants to lift those restrictions because he projects the market over time will beat the safer Treasury investments by about $50 million a year.

The proposals worry counselors and gambling addiction experts. While calling for allowing more ways for people to gamble, the governor has frozen funding for treatment and prevention efforts at $4.2 million — a level that, they say, prevents many counties from launching any substantial outreach efforts for compulsive gamblers. New York is the only state not to have a dedicated flow of money — from gambling revenues, for example — for treatment and prevention. The state, some say, has not even studied the impact of the big gambling expansion over the past decade on compulsive gamblers.

More funding urged

Robert Rychtarik, a senior research scientist at the University at Buffalo’s Research Institute on Addictions, said the state should expect more problem gamblers with the Paterson plans to expand gambling.

“The state needs to provide the funds for the anticipated increase in gambling problems that might be expected from the increases of the gambling venues they are proposing,” said Rychtarik, who is also president of New York Council on Problem Gambling, which takes a neutral stance on gambling itself.

The Paterson administration said it plans to expand the number of counties providing gambling prevention and treatment programs to 37 from 30 in the coming year and will continue its operation of a 24-hour gambling addiction hotline.

“We believe that there is room for responsible growth in the gaming industry to help the state manage its fiscal difficulties. That said, we recognize the need to continue to address the issue of problem gambling through targeted initiatives,” said Matt Anderson, Budget Division spokesman.

Amherst Town Justice Mark G. Farrell, recognized for setting up the country’s first suburban drug court, said the state has not been effective in expanding treatment and prevention efforts “because the biggest partner in gambling is only one thing: government. Because government can see certain economic benefits to the proliferation of gambling, . . . there’s a reluctance to take a look at this addiction.”

Farrell noted that Australia, where he recently attended a gambling conference as a guest of the national government, has strict rules governing casinos, including mandatory shut-down periods and even clocks and windows in the facilities.

Gambling headquarters

“It’s just troubling that government is compromising standards, and promoting and proliferating gambling without taking into account the human issues,” Farrell said. But counselors on the front lines say the state is becoming saturated with gambling opportunities, from new lottery games to casinos. And Western New York, home to three Indian and two racetrack casinos, has become the state’s gambling headquarters.

“Those with gambling problems have fewer and fewer places where they can go where they are not tempted to gamble,” said Renee Wert, a Buffalo psychologist whose clients include compulsive gamblers.

She said the state’s gambling industry has exploded in the past decade, while the effort to prevent and treat compulsive gambling “is really in its infancy stages.”

With the recent economic downturn, Wert said she has seen clients turn to gambling to try to raise money to make car and house payments. Some people who lost their jobs took their severance checks to casinos looking for luck.

“It might help the state, but it harms the community,” Wert said of the Paterson proposals. “I think the governor really needs to look at that and what he might be doing. It might be good in the short term for the state, but bad economically long term for the state, and that’s not even counting the impact on the residents.”

Maney, of the gambling council, said the law involving Quick Draw and racetrack casinos incorporated provisions to avoid 24-hour-a-day gambling.

“Suddenly, the barriers are being stripped down. It’s like taking down the guardrails on the highways,” he said.

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