Suffolk OTB, the public benefit corporation that oversees local video-gaming action, acquired the rights to both own and manage the popular casino from Buffalo-based Delaware North. The firm employs NY Gov. Kathy Hochul’s husband as senior vice president and general counsel.
This fact has proven to be a source of controversy: the Delaware North connection has had Hochul under fire over potential conflict of interest issues. The Governor has the final say in choosing who chairs the state’s Gaming Commission, which regulates gaming venues such as Jake’s 58.
In a letter sent last Friday to Sen. Majority Leader Andrea Stewart-Cousins (D-Yonkers) and Assembly Speaker Carl Heastie (D-Bronx) Bellone, who is now pushing the probe, claimed the deal was cut in secrecy and that it could create a massive patronage mill, according to the New York Post.
The Suffolk County Executive accused Suffolk OTB of avoiding public scrutiny by refusing to turn over copies of its contract to buy the Islandia, Long Island video-gaming casino in May. He is also now demanding legislative reform to improve transparency throughout the OTB system and similar public entities.
“Now without the oversight and management of a professional casino operator, Jake’s 58 Hotel and Casino, where hundreds of millions are wagered through its doors each month, is poised to become one of the largest political patronage operations in the State, if not the country,” said Bellone in the letter, obtained by the previously cited news source.
“At minimum, these troublesome actions are a signal of fiscal impropriety – and perhaps much worse,” Bellone adds. “Given the current circumstances, I am requesting that the State Senate and/or Assembly move to conduct a formal investigation, as this may be our best hope to bring transparency to an agency that thrives by operating in the shadows.”
Bellone also attached to the letter a copy of federal court papers from a lawsuit between OTB and Delaware North, which according to him alleges “a culture of shameless nepotism among Suffolk OTB leadership.”
According to Suffolk OTB, the casino-hotel purchase was carried out in an effort to save about $13 million a year in rental and management fees previously paid to Delaware North. The Buffalo-based company had a 50-year contract to manage the casino for the formerly bankrupt betting agency.
Suffolk OTB’s President and CEO Jim LaCarrubba called the casino deal “great.” According to his estimations, it will help provide a record $20 million-plus to Suffolk County’s current budget. “As a result of our efforts, Suffolk OTB is the most successful OTB in the state and is providing record revenue to New York State as well as Suffolk County,” he said.