Betting the house on the future of Jake's 58

Daily Point

Power struggle over OTB's big wager

When former Suffolk Off-Track Betting Authority President Phil Nolan began pushing hard for 1,000 video-lottery terminals for the then-bankrupt and beleaguered organization almost a decade ago, it was clear such a facility would make a lot of money. No one, though, could have guessed that in good times it would net a win of over $1 million a day.

Now the Suffolk OTB is a profit center and a jobs hub, and not surprisingly, the focus of a power struggle that is intensifying as local pols become increasingly annoyed that some of the jobs and a lot of the profits are going to operator Delaware North.

Suffolk OTB can buy Delaware North out of the Islandia real estate and the management contract for $120 million, and it wants to. But on Monday, County Executive Steve Bellone sent a letter to the OTB asking it to freeze the purchase process it pitched to Bellone’s administration last week.

Bellone's reasons for concern and for the launching of an independent review of the plan included the OTB’s past bankruptcy filing and the potential for so much OTB debt hurting payments to the county from Jake’s 58. Bellone also pointed to the dangers of taking casino management away from Delaware North’s experts and the annual multimillion-dollar deficits of the horse gambling operation the OTB does operate directly as red flags.

And the stakes are only rising.

Suffolk OTB wants 1,000 more machines at its Jake’s 58 slot parlor in Islandia and has 10 acres of extra space to accommodate them. And State Senate Racing, Gaming and Wagering Committee Chair Joseph Addabbo and Assembly Committee on Racing and Wagering Chair Gary Pretlow told The Point they have no objection to the added machines in Suffolk.

So with so many players in New York clamoring for more gambling, why is Jake’s different? With the busiest machines in the state, it is expected to contribute $25 million to the county and $100 million to the state’s education funding annually, and those numbers could double with 2,000 machines operating in a post-pandemic landscape.

That revenue eventually could go even higher if Delaware North, which got a fantastically sweet deal from Nolan as he tried to negotiate with the company funding the project while the OTB was in bankruptcy and bleeding cash, could be brought to heel.

And that raises the real questions:

Should the OTB, historically a legendary patronage pit, be allowed to borrow $120 million to buy out Delaware North, then make the top managers who currently report to the company into public employees who could be hired at the bidding of OTB management?

Should the County itself borrow the money and take over the operation and all the jobs, and if so, would the OTB, left with just a money-hemorrhaging horse-betting operation, close entirely?

And is this just one more battle in the endless war between Bellone and Suffolk Democratic Party Chairman Rich Schaffer, who essentially controls the OTB via the choosing of its leadership by the Democrat-controlled county legislature over which Schaffer holds tremendous sway?

In an era in which patronage jobs and the power of political bosses sometimes seem to be waning, Jake’s 58 is an extraordinarily rich prize, offering control of jobs, contracts for services and consulting, an obscenely generous marketing fund and hundreds of millions of dollars a year in revenue that, if it is not wasted, goes to the coffers of the state and county.

With such spoils, the ferocity of the battle is all but guaranteed.

—Lane Filler and Rita Ciolli @lanefiller and @ritaciolli

Talking Point

Albany budget talks jammed on progressives demands for payouts to undocumented and incarcerated

As the deadline for an on-time budget ticks closer, one unresolved piece seems to be an "excluded workers" fund that would support those who — primarily due to immigration status or incarceration — didn’t have access to federal stimulus checks or traditional forms of unemployment insurance during the pandemic.

The fund for such workers is being loudly supported by left-leaning groups who want to increase taxes on the wealthy to pay for aid programs such as this. Some activists are on day 14 of a hunger strike pushing for the fund, and the State Senate and Assembly included $2.1 billion in their budget resolutions for such a program, but Gov. Andrew M. Cuomo did not.

One issue seems to be how those who get paid off the books because of their residency status are expected to show that they are eligible, a potentially tricky situation for undocumented delivery workers, home health aides or laborers who might be hired by text message and paid in cash, lacking official paperwork or even bank accounts, activists say. The Senate’s budget proposal allows proof of eligibility to be established "by documentation or, in the absence of documentation, by self-attestation" under penalty of perjury. That is apparently not enough for some moderate Democrats and Cuomo.

At a Manhattan news conference on Monday, Bianca Guerrero, coordinator of the Fund Excluded Workers coalition, expressed concern about potential Cuomo "poison pills" that would cut people out of the program: requiring official documents like pay stubs or bank account records. Another proposal on the table is that the workers have a state tax ID number, which approximately 90,000 workers without legal residency do have.

Lawmaker after lawmaker who spoke at the event decried verification and called for more "flexibility" to the program, which in the Senate’s budget version could pay out $600 a week for the early period of the pandemic and $300 a week for a latter portion.

The issue is symbolic of the changing political winds in Albany: first-term Assemb. Amanda Septimo of the Bronx noted that with Democrats in control from the White House down to the State Assembly, the party had a "responsibility" to deliver. Fellow freshman and self-described socialist Jabari Brisport, a Brooklyn state senator, noted that his own father had lived here for years as an undocumented immigrant from Guyana.

How will the issue play on Long Island? Advocates point to a Fiscal Policy Institute report that says the fund would benefit 33,000 people on Long Island, plus the public health and economic advantages to paying struggling workers during these times.

Politically, Republicans eager to capture the governor’s mansion and the State Senate majority are salivating over the possibility of having an issue that highlights high-spending Democrats combined with lax immigration rules.

Some Long Island politicians are troubled by the proposal but refused to discuss their concern on the record, hoping the issue disappears in the dark hours of the final budget negotiations. Others, like Sen. John Brooks, said it wouldn’t fly unless there is more relief for struggling Long Islanders who are taxpayers.

"We have an obligation to recognize the exceptional high-tax burden parts of LI are bearing. Most of the population suffered some form of economic loss in the pandemic, they worked few hours, lost a second job or their business closed," he said.

—Mark Chiusano and Rita Ciolli @mjchiusano and @ritaciolli

Pencil Point

Stop and then go

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Quick Points

• Brazilian President Jair Bolsonaro has called COVID-19 "a measly flu," rejected an offer last year from Pfizer for millions of vaccine doses, encouraged large gatherings, touted ineffective anti-malaria and anti-parasite drugs, and joked that if vaccine-takers turned into alligators the drug companies would not be held responsible. Perhaps the surprise isn’t that Brazil has the world’s worst coronavirus outbreak and a health care system about to collapse, but that this didn’t happen sooner.
• The number of unaccompanied children who’ve crossed the Southern border this month – more than 16,000 so far – easily surpasses the May 2019 record of 11,475, and President Joe Biden’s administration projects as many as 26,000 will cross in September. Not the kind of record Biden wanted, or expected, to break.
• Some GOP senators are saying it’s possible Republicans could support expanded background checks for gun sales. Hence, the Democratic dilemma: Take them at their word, or remember their previous non-actions?
• After standing up to then-President Donald Trump’s attempt to overturn election results in his state, Georgia Secretary of State Brad Raffensperger is expected to face great difficulty getting re-elected. But after Georgia lawmakers removed a lot of his power, who’s going to want the job?
• Florida Gov. Ron DeSantis has been winning plaudits for his supposedly successful but controversial relaxed policies in dealing with COVID-19. So what to make of cases of variant strains doubling in Florida in the past two weeks to a nation-leading 2,330? The truth can be inconvenient.
• Former White House coronavirus task force coordinator Dr. Deborah Birx said of her uneasy tenure, "Everybody inside was waiting for me to make a misstep so that they could, I guess, remove me from the task force." People outside, however, were waiting for her to push back against the Trump administration’s misstatements and obfuscations. Which is funny, because both were really waiting for the same thing.
• The container ship blocking the Suez Canal has been freed, ending one crisis but creating another: What are we going to do without all those great memes?

—Michael Dobie @mwdobie