The New York State Gaming Commission posted two interesting items on its website in recent months.

One was a glossy PowerPoint about the hundreds of millions of dollars and thousands of jobs that full-scale casino gambling could create in New York. The other was a request for proposals to study how to protect the state lottery from the competition full-scale casino gambling would present.

Such are the complexities of assessing the impact casinos will have on the state's economy and public coffers: It's not just a matter of figuring out how much the winners will make—although that is complicated enough—but also determining who might lose out on the deal. And all those calculations must be made about a gambling market that is changing, with some neighboring states seeing gambling revenue shrink even as others expand their gaming offerings and Internet gambling begins to take off.

In some ways, New York voters who decided to approve full-scale casinos weren't just playing the cards in front them. The cards still to be dealt are the ones that really matter.

Competitive worries

New York already hosts plenty of gambling: Nine "racinos" offering horse-racing as well as VLTs and slot machines, eight gambling facilities on Indian land and a state lottery that has grown since 1967 from a single game to a menu of four jackpot games and four daily contests offering a combined 50 drawings weekly, at least 56 instant scratch-off games and QuickDraw, which generates a winning number ever four minutes—or 360 times every day.

On one hand, that dizzying array made the casino referendum less momentous: As the legislative memo that accompanied the state casino bill put it, "New York State is already in the gambling business," and "has more electronic gaming machines than any state in the Northeast or Mideast."

On the other hand, the number of existing gambling options raises the question of whether new casinos will draw new players to the market or merely pick off customers who are now placing their wagers at a racino, at an Indian gambling or via the lottery.

The New York Gaming Association, which represents the nine racinos, opposed early versions of the casino bill, saying it would "simply cannibalize as much as 85 percent of the state’s current gaming market, shifting revenue and jobs from one facility to another but resulting in no real increase in new jobs and an annual loss of $1 billion of tax revenue for education."

The final casino bill that Gov. Cuomo signed this summer assuaged some of the concerns about intra-state cannibalism. The law protects the territory of the Indian casinos by barring new gaming facilities from those areas, and it protects the new casinos by and prohibiting casinos from downstate for seven years. It also would lower the tax rate paid by racinos to equal what the new casinos will pay and protect horse-racing purses from the effects of more gambling competition.

But the law's wording didn't eliminate all the competitive pressures. An organization of upstate theater companies recently wondered if their audiences would be thinned by the arrival of casinos, which can neutralize an art scene by signing performers to exclusive contracts or just giving tourists a different place to spend money. The Cuomo administration has said the casinos are supposed to work with, not against, cultural facilities that already exist.

The state lottery is also wondering whether casinos will cut into its customer base. "The Lottery is faced with increased competition for discretionary income purchases as the possibility for casinos in New York State is put before the public in November," reads the Gaming Commission's RFP. "The Lottery anticipates the need to review different strategies to remain as a relevant gaming option and important source of funding for State aid to education."

Seeing a winner

Arts groups and the lottery may lose out if casinos come to New York. But the Cuomo administration argues that the entire state is already losing out, because its people cross the border to place their bets.

New Yorkers, the Gaming Commission's economic impact projection says, are a big part of the success of casinos in Connecticut and Pennsylvania and also travel to gaming facilities in New Jersey, Las Vegas and Quebec. If those buses heading east on I-95 to Foxwoods or west across the Hudson to Atlantic City can be detoured up the Thruway to a casino at, say, Saratoga, the state can will into the riches other states have rolled in: $300 million in annual revenue in Connecticut, $1.5 billion in yearly tax intake in Pennsylvania and 30,000 direct casino jobs between the two states.

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"These jobs were made possible and revenue gained substantially from money spent by visiting New Yorkers," the Commission's PowerPoint claims.

The Cuomo administration's estimate is that casinos will generate nearly a billion dollars in construction spending, create 6,700 construction jobs and 2,900 permanent positions and produce $430 million in tax revenue—roughy half going to the regions where casinos exist, and the rest spread around statewide. Some of that money will come from new revenue-sharing arrangements with existing Indian casinos.

Unlike the lottery and racinos, whose funding of education often was offset by cuts in other sources of school support, any money generated by the casinos for schools will be over and above the school aid that the state currently distributes. The administration estimates that New York City, which received $8.5 billion in school aid from the state last year, will see $94 million in additional school aid if the casinos open.