Comptroller’s Office: NY Commercial Casinos Owe State $17.7M In Oversight Costs

Posted By Martin Harris on May 18, 2021

New York’s four commercial casinos have some overdue bills to pay, says the New York State Comptroller’s Office. In fact, the payments for having state regulators provide oversight at each casino have been due for quite some time, dating back several years.

The bills add up to a hefty sum, too — $17.7 million, altogether.

The New York State Gaming Commission is chiefly to blame, says the Comptroller, for not having collected payments as diligently as they should have.

Regulators’ failure to collect oversight fees date back to 2017

The problem is not a new one. For more than a year, the Comptroller has petitioned state regulators to collect what the casinos owe.

In January 2020, a report from Comptroller Thomas P. DiNapoli found an estimated $13 million had not been collected from the four commercial casinos for oversight costs.

New Yorkers voted to approve commercial casinos in 2013. That set into motion a process resulting in the opening of four casinos in upstate New York starting in 2016:

  • Tioga Downs & Casino (racino converted and opened as full casino Dec. 2016)
  • del Lago Resort & Casino (opened Feb. 2017)
  • Rivers Casino & Resort (opened Feb. 2017)
  • Resorts World Catskills (opened Feb. 2018)

The casinos were open, but apparently regulators needed longer to nail down operational details when overseeing the new facilities.

An audit enabled the Comptroller’s office to determine the Gaming Commission’s failure to collect oversight costs from the casinos from April 2017 to March 2019. Per New York gambling law, the Commission sends employees to all betting facilities to ensure laws and rules are followed. The casinos must bear the costs of such oversight.

Regulators explained that a lack of regulations “had delayed assessing commercial casinos” in the state. However, once the rulemaking process was finalized, said the Commission, the oversight costs would be billed appropriately going forward.

The report showed the Gaming Commission did collect oversight fees both from Video Lottery Terminal (VLT) facilities and from tribal casinos, but not from commercial casinos. During the same April 2017-March 2019 period, regulators collected $144.8 million from VLT facilities and $8.9 million from tribal casinos for oversight, but zero dollars from the four commercial casinos.

Among its recommendations, the Comptroller stressed regulators needed henceforth to “assess and bill commercial casinos’ oversight costs in a timely manner.”

Follow-up report shows billing problems, non-payment persists

Apparently, regulators did not follow that recommendation. More than a year later, the problem continues, with the amount owed by the casinos having continued to increase.

Last week, Comptroller DiNapoli’s office issued a follow-up report examining regulators’ performance from April 2019-March 2020, and the findings sounded familiar.

“Gaming Commission has made only limited progress fixing problems with its monitoring of casinos, especially with its failure to collect millions in oversight fees,” the Comptroller’s Office explains.

Regarding the $13 million previously owed by the casinos, the Gaming Commission did eventually bill the four casinos $9.3 million in Nov. 2019 with payment due Dec. 2019. However regulators collected no payments.

Meanwhile, additional oversight costs for the April 2019-March 2020 period totaled $4.7 million. The Gaming Commission billed the casinos that amount in Nov. 2020 with a Dec. 2020 due date for payment.

Again, the casinos made no payments. “In total, the casinos owe New York $17.7 million,” the Comptroller’s office concludes.

“The Gaming Commission must do a better job staying on top of New York’s ever-expanding gaming footprint,” says Comptroller DiNapoli.

“The commission should collect all oversight charges that casinos are supposed to cover,” he adds. “The commission has made some changes, but it needs to do much more.”

Commercial casinos not alone withholding payments from state

The commercial casinos’ non-payment of oversight costs is not the only instance of New York trying and failing to collect money from casinos this year.

Last month, the Seneca Nation of Indians requested a 45-day stay of all proceedings in what has become a four-year battle with the state over revenue-sharing payments.

New York and Gov. Andrew Cuomo claims the Seneca Nation owes the state $435 million in payments dating back to 2016.

However the tribe, which operates multiple gaming properties in the state, believes otherwise. According to the Seneca Nation, the latest renewal of their compact did not specify the need to continue the payments.

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