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New York strikes deal to allow Las Vegas-style casinos

Gamers play the slot machines at the Empire City Casino in Yonkers, New York June 23, 2009. REUTERS/Lucas Jackson
Gamers play the slot machines at the Empire City Casino in Yonkers, New York June 23, 2009. REUTERS/Lucas Jackson

By Francesca Trianni

NEW YORK (Reuters) - New York Governor Andrew Cuomo struck a deal with state lawmakers to license new resort-style casinos, in an effort to help revive a stagnant economy in upstate New York, the governor said on Wednesday.

The agreement would amend the state constitution to legalize public, non Native American casino gambling with an initial four Las-Vegas style casinos in the Hudson Valley, the Binghamton area and the Albany region.

Until now, New York has allowed table gambling only on Native American tribal land or slot machine gambling at horse racing tracks.

"Today's agreement with the legislature would establish world-class destination gaming resorts to attract tourists to upstate New York," Cuomo said in a statement.

"This legislation is a major step forward in our efforts to both capitalize on this economic development and tourism potential and end the trend of letting neighboring states with legalized gaming take revenue that should be going to our schools."

New casinos in New York state with table games could provide competition to New Jersey's Atlantic City, Pennsylvania and Connecticut, as New Yorkers who now frequent those venues might prefer to gamble closer to home.

But U.S. casinos operators like MGM Resorts International and Caesars Entertainment Corp plan to launch Internet operations in states like New Jersey, which recently passed online gambling legislation.

A vote on the New York deal was expected on Friday, before the state legislative session ends. New York can only legalize casinos if two successively elected legislatures enact bills, meaning the legislature would take to approve the measure again next session.

Voters would then have to approve a constitutional amendment legalizing casino gambling.

In addition to the first four casinos, the bill also includes a proposal for a video slot machine center with about 2,000 machines in the Long Island area, said Rich Azzopardi, a spokesperson for Governor Cuomo's office.

Seven years after those licenses are sold, another round of casino licensing would be allowed for three casinos, that could be built also in the New York City area, Azzopardi said.

In January of last year, Cuomo vowed to boost the New York economy during his second annual State of the State address with initiatives that included the construction of Las Vegas-style casinos to increase tourism and allow property tax relief for upstate New York's struggling cities.

A recently released federal report showed New York state's economy grew at a slower pace than the national rate in 2012. New York's unemployment rate was 7.8 percent in April, above the national average of 7.5 percent.

New York state's nine racetrack casinos employed about 5,000 people and generated about $1.8 billion in gross gaming revenue 2012 and turned over $823 million in taxes to the state, according to data from the American Gaming Association (AGA).

Gambling opponents say casinos use deceptive tactics to lure addicts, arguing casinos should be held accountable for billions of dollars in costs to society. The National Council on Problem Gambling estimates that gambling addictions account for $7 billion a year in health care and criminal justice system costs.

(Reporting by Francesca Trianni; Editing by Daniel Trotta and Sofina Mirza-Reid)

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