September 8th, 2005

Attorney Seeking to Set Up Low-Profit Casinos in NYC Files Action to Invalidate New York’s 1821 Prohibition of For-Profit Gambling

(New York, NY) Today, New York attorney Carl Person filed an action for declaratory judgment against Governor Pataki, Attorney General Spitzer, New York Lottery, NYS Racing and Wagering Board and others to have the following Article I, Section 9(1) of the New York Constitution declared unconstitutional, to the extent it prohibits for-profit gambling in New York State:
no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature … and the legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section.

Person states that he would like to establish hundreds of places for low-profit neighborhood gambling, offering $2 poker tournaments, bingo and numbers games, 100% payout slot machines, and other gambling activities for residents in a locality to meet and socialize with neighbors, similar to a neighborhood bar but with low-cost gambling as the draw instead of alcohol, Wi-Fi, coffee or drugs.

Person also seeks the right to buy and use a slot machine for non-gambling purposes. He states “The ownership and use of a slot machine is currently illegal under New York law, even if I were to own one as a collector, or use it at home without gambling (like an arcade-type game such as Pac-Man”).

This irrationality of New York law led Person into looking at the New York gambling industry. Person saw that it was monopolized by New York State, and various governmental subdivisions, with grants of monopolies to
(i) five Indian tribes (with four more anticipated),
(ii) 10 racetrack owners (7 harness and 3 thoroughbred),
(iii) 17,000 independent runners/book-makers called “Lottery Agents”, who receive 6% of lottery sales;
(iv) local governments that participate in the regional Off-Track Betting operations throughout NYS;
(v) numerous cruise lines that pick up patrons in New York City for their casino cruises; and
(vi) major corporations, by the failure of NYS to enforce the lottery prohibition against businesses running promotional lotteries, such as the major beverage companies' (1 free bottle in 12) to market billions of dollars worth of their product to New Yorkers, at the expense of law-abiding competitors.

Person lists many advantages of competition in gambling, including his estimate that the price of gas could go down $1 per gallon if the yearly 33,000,000 visitors to Atlantic City, 25,000,000 customers of Foxwoods and Mohegan Sun, 10,000,000 patrons of the 5 New York Indian casinos and 100's of millions of other casino patrons in the U.S. could avoid driving 200 miles to visit these casinos, and patronize local gambling venues instead.

A copy of the complaint and Exhibit A (an analysis of New York gambling by Person) can be found at Person’s website,