Friday, September 26, 2014

Off to the Races: Hard to Separate the Facts from the Rhetoric – Genting Americas

The three local public meetings to introduce New York’s 16 casino proposals ended on Wednesday in Ithaca, NY after two earlier sessions in Albany and Poughkeepsie, NY. With the public and local communities now much better informed, the Gaming Facility Location Board can make its presentation to the state gaming board and we expect final licensing decisions by the end of October.

Along with facts, figures, and projections, public forums like these usually bring a lot of rhetoric especially from those pitching their concept as the biggest and best. Shrewd listeners and readers know how to separate the hyperbole from the meat and potatoes but that doesn’t stop the proponents from laying it on thick.

Case in point is Genting Americas’ Chief Financial Officer, Christian Goode. Goode attended all the local forums and spoke with local reporters throughout the state detailing the reasons why his company’s bid should be approved. Genting Americas has two proposals in the running, both in Orange County, the southern-most New York county to receive bidders. One, Resorts World Hudson Valley in rural Montgomery, NY has not gotten lots of play. The other, the Sterling Forest Resort in Tuxedo, New York, a mere 40 miles from New York City, has received the most attention of any proposal mostly because of its magnitude, a $1.5 billion complex, and secondly because of its location.

Any casino built within an hour’s drive of New York City will be seen as a game changer in the Northeast. NYC is regarded as the prime market for casinos as far away as Philadelphia and eastern Connecticut and, once upon a time, Atlantic City. With the prospect of a New Jersey casino in the northern part of the state (proposals have been flown for Jersey City and the Meadowlands) doomed to be mired in state politics, a New York City area full scale casino is looking very profitable. On that score the Tuxedo proposal is, hands down, the best business plan of the bunch. With that in mind, the Tuxedo proposal is forcing its proponents to bend the original legislative dream a bit.

 Casinos are being allowed by the NYS legislature for the specific purpose of rejuvenating otherwise economically depressed areas in various regions around the state. That and filling the state’s coffers with more tax money are the only real reasons why these laws were ever passed. There was never any thought of creating areas where NY citizens could go to have a good time. There was never any inkling of loosening up the paternal choke-hold that New York has on many of its citizens, not allowing this (gambling) and not allowing that (marijuana). The perception that NY is a progressive state is a fantasy – the price we pay for years of government intervention to take care of its citizens has made NY into a rule heavy, big brother locale. Nevertheless, the sole purpose of the casino initiative and the only one that had been touted prior to these meetings was economic rebirth, jobs, and tax money.

If you are looking to keep to this mission, Tuxedo, NY is the last place you look. Not only is this small enclave of the well-to-do not economically deprived, it has one of the highest per-capita income averages in the state and the nation ($89,895 median household income in 2012 according to!  So suddenly, creating a luxury environment for foreign gamblers has become a reason for building although that’s not what’s being said very clearly at these meetings.

What is being said, and here is where the rhetoric gets pretty deep, is that Genting Americas will create jobs, good, well-paying jobs. Unfortunately, this is not an area that needs jobs! Goode’s exact comment regarding jobs is that the resort will create more than 4,000 jobs with an average salary of $75,000.

That statement is both NOT surprising and surprising when you take it apart. Four thousand employees is not an exaggeration by any means. What Genting Americas is proposing is a full scale resort with much more than casino space and restaurants. They mean to capitalize on the outdoor, recreational value that the site already has – a ski area in winter, and old growth, protected forest land the rest of the year. We can imagine golf courses and hiking trails somewhere in the future. The Casino de Genting in Malaysia, the world’s largest casino, employs 13,000 people. More familiar enterprises in the USA have more than 4,000 employees – Foxwoods in CT has 10,000+, the MGM Grand in Las Vegas has 9,000 employees and the Borgata in Atlantic City pays 7,000 workers every week. So, the number of proposed employees for the Tuxedo Resort is in the ballpark.

The stated average salary is not; it is way, way off. I am guessing that Goode is not talking about the salaries of those who will be employed in the construction of the complex. According to US News and World Report (Article) construction salaries in major US metropolitan areas can average $90K per year with the high end reaching $125K and the low end still in the $40K range. But, those are not jobs that will last at the Tuxedo Resort. Many of those workers will come from outside the area, work for up to six months and then move on to a different construction project. If Christian Goode was referring to those kinds of jobs he’s stone-walling.

Casino jobs, historically, do not approach an average of $75K annually. Statistics reported by Work Chron for the year 2012 tell a very different story. While hotel casino salaries are higher than salaries at smaller, stand-alone casinos, none of the numbers get close to an average of $75K per annum. Casino cashiers earned an average of $25,740; dealers, an average of $22,410; security personnel were higher at $35,440; and casino supervisors and managers earned an average of $72,270 per year. In order to come up with that number a casino would need to pay everybody $75K per year or about the same number of people higher salaries in the $100K range and lower salaries in the $50K range. That’s not what happens. Businesses have a small number of higher paid executives and managers at the top and a larger number of lower salaried line workers at the bottom. 

Although not mentioned specifically in this article (click here) casino workers in Malaysia, where Genting has its largest casino, recently went on strike for higher wages. More jobs for New York, yes; higher paying jobs, no! 

Up to this point there has not been much in the press about nefarious dealings associated with any of the companies making proposals. Yet, in the best American tradition, some will seek untoward ways of getting ahead of the competition. All three public forums were full of audience attendees wearing various brightly colored tee-shirts with their message of choice emblazoned across their chests. Many, most, were in favor of one proposal or another. Some were against proposals on moral, ethical or financial grounds. Allegations surfaced of proponents being paid for their participation, bussed in and fed free meals. All of that is probably true. As long as everyone has a fair chance to win influence any way they can, who are we to judge. Thus far there have been no allegations of high level pay offs and corruption on the legislative end. Let’s hope it stays that way.

More on this in a month or two!

Monday, September 22, 2014

Another Step Closer!

This week will see New York State move one step closer to sponsoring the establishment of up to four new full scale casinos in New York State. A three day period of open public comments begins today, Monday, September 22, 2014, in Albany, followed by a forum in Poughkeepsie on Tuesday, and a third on Wednesday in Ithaca, New York.

What was seen a few months ago as a process with few issues for or against these new casinos, has developed lately into a referendum on casino gambling itself in the wake of multiple casino closures in Atlantic City. “Why now?” is a lament being heard around the state fostered by the fears that communities will commit to building infrastructure to accommodate these massive hotels with the possibility of little return in the future.

Those fears are real but this bulldozer will continue moving ahead at least through this initial stage which promises up to four casinos in three designated areas.
While sixteen proposals are currently being considered there are a few front runners, Genting Group and Caesars among the top players. Caesars has an attractive proposal destined for Sullivan County in the Catskills, one of the original areas pin-pointed for renewal. Genting’s proposal is for a large complex in Tuxedo, New York, a mere 40 miles or so from New York City. While this proposal promises to be the most successful endeavor overall due to its proximity to the City, it misses the mark as far as “renewal” is concerned. Tuxedo Park is an affluent community and, by all accounts, is not looking for a casino to attract outsiders to its borders.

Soon all of this will be in the hands of the state’s Gaming Facility Location Board, the state entity charged with holding these public hearings. Once the hearings are completed, all will be turned over to the Gaming Commission which has promised decisions by the end of 2014.

My money is on Genting and Caesars to get two of the possibly four deals. But, at this point, everyone is a long shot. Stay tuned for more.

Friday, September 5, 2014

Poker and Wine

What do poker and wine have in common? Not much except that they are two of my favorite things. Next to spending an afternoon or an evening at the poker table trying to turn lousy cards into winning hands and attempting to get inside the heads of eight other people, the only activity I enjoy as much is sitting down to a well-prepared pasta or sizzling steak meal with a nice bottle of wine as an accompaniment.

Like poker, you can get immersed in wine at various levels and for most of us the highest levels of involvement will be too rigorous and ultimately unsatisfying. It’s nice knowing how many outs you have on the river to make a particular hand but it’s beyond most of us everyday types to calculate odds to the hundredth place and figure pots odds every time it’s your chance to bet. The wine crowd has a similar spectrum of expertise with the jug/cardboard box crowd on one end and the oenophile on the other whose use of the adjectives angular, flabby, oaked, and unctuous to describe a glass of wine is far beyond everyday comprehension.

In all honesty I have never seen a bottle of wine at a poker table. That doesn’t mean that there has never been a player who ordered and drank a glass of wine while playing poker. Generally, ordering an alcoholic drink in most casinos gets you what is commonly referred to as a “well” drink which leaves me with a vision of someone dipping a glass into a deep hole and coming out with the swill that lives there. Casino drinks are bad although in a few upper echelon places in Vegas you can actually order a bottle of beer of your choice. Wine, not so much.

Perhaps there are occasions when a high roller in a high-stakes tournament in a classy venue orders up a bottle of Chateau Lafite-Rothschild 1982 and has it delivered to his or her table along with the hefty tab, I assume (probably around $70 grand per bottle), but I’ve never seen one. 

I have seen dark red or insipid yellow liquid sloshing around a high ball glass in front of a poker player more than once and it doesn’t look appetizing.

So, generally speaking, the world of poker and the world of wine are distinct and apart and I think they should stay that way.

I have a visceral idea of what an ordinary, recreational poker player looks and acts like. I know because I am one of them. I play when I can but I don’t traipse all around the country looking for a favorable level structure or payout schedule. I leave that to big fellas who make a living playing poker.

I also have a similar notion of what an ordinary, recreational wine drinker looks and acts like because I’m one of those people too. Nevertheless, the world of wine can be as snooty at times as the world of poker. Regular guys tend to generate a lot of guilt about not being able to compete at the highest levels in the poker world; regular guys also generate a mountain of guilt about not grasping what the experts know about wine. I’m here to tell you that with a few simple pointers you can enjoy your wine experiences as much as you enjoy your poker experiences without any shame and any guilt at all.

Here’s what you need to know:

* Basically there are two kinds of wine – red and white! There’s pink too but it is easily and correctly avoided at all costs.

* Regardless of the color, wine tends to be “dry” or “sweet.” In the wine world sweet means sweet but dry means not sweet.

* Wine can be full of bubbles but you only drink that for a toast or on New Year’s Eve. Stay away from bubbly.
* Red wine goes with meat and cheese. White wine goes with chicken and fish. If you want to drink red wine with your Arroz con Pollo, go ahead. If you want to drink white wine with your pork chops, go ahead. The only rules, really, are that there are no rules. Oh, there is one rule – drinking wine alone is never better than drinking wine with a meal. Drinking wine by yourself is never better than drinking wine with someone else. I know, that’s two rules!

* If you spend more than $20 for a bottle of wine in a liquor store (around $40 in a restaurant) you’re wasting your money since you will not be able to taste the difference between an inexpensive bottle and a more expensive bottle. Leave the pricey bottles for those who have studied long and hard to learn the difference (Trailer for "Somm" - a movie about sommeliers).

* Finish the bottle – I don’t care what kind of stopper you use or where you put the half full bottle, wine is a lousy leftover.

* Drink wine at whatever temperature you like. Although making red wine too cold will kill the flavor, putting ice cubes in white wine is fine with me.

* Finally, drink wine often. There are many health professionals who say that wine, in moderation of course, is even good for you – helps you live longer. Those are my kind of health professionals.

I have two little placard type signs hanging on the sides of the kitchen cabinets in our house.  I’m not a sign type of person but these two speak to me, if you will. One says “Age Improves With Wine.” The other simple predicts “Today’s Forecast – 90% Chance of Wine.” Each day as I walk from the kitchen into the dining room I pass those signs and I read them. Life is good!

Keeping poker and wine separate is a wise thing – just don’t let one keep you from the other.