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Down to The Sea in Chips

by Carter B. Horsley

New Yorkers are blasé. Insouciance, however, is not always brilliance. Let's take the subject of gambling. Please.

It is not politically popular in New York to the delight of Atlantic City, Las Vegas, some places in the Caribbean and some Indian reservations.

New York City has simply stood idly by as other jurisdictions have raked in the gambling dollars.

Some New Yorkers may take a holier-than-thou stance that tries to avoid above taints of possible corruption, but, surprisingly, the gambling issue has not really created much of a stir.

Instead of "let 'em eat cake," some New Yorkers have adopted a "let 'em gamble" towards the philistines of New Jersey and Nevada and other gambling havens.

Well, balderdash!

Gambling is a very addictive malady and has ruined many lives.

Many moralists have ranted against it.

It has not succumbed to public morality, however, and is probably not a small part of human nature.

It is not totally outlawed in New York as evidenced by state-run lottos and state-sanctioned horseracing.

In recent years, the subject of casino gambling has been debated briefly by the State Legislature that listens, but does little else, to the plaintive budgetary problems of "depressed" areas like part of the Catskills and even the once great Coney Island enclave in Brooklyn.

While New Yorkers bemoan their fate, some intrepid souls have recently hit on the brilliant idea of running casino boats out of Brooklyn to take gamblers beyond the three-mile limit into international waters where there are no prohibitions against gambling.

Lo and behold, a flummoxed city expressed official expressed official displeasure at this development and has insisted on background checks for the operators and employees of such casino ships. Meanwhile, city officials are woefully, albeit quietly, bemoaning the absence of real direct revenues for the city from such operations.

It does not take genius to recognize that New York is being dumb about gambling.

Gambling is big-time business. Las Vegas has been the nation's hottest city for a generation. Atlantic City, of course, has not yet shown much benefit from its casinos, but then it's in New Jersey.

New York City should embrace casino boats in a very, very big way.

Imagine, if you will, peering out of your 40th floor office window and seeing the beautiful smoke stacks of huge oceanliners plying up and down the Hudson River and hearing, even through sealed windows, the lovely roar of foghorns bellowing between the hard city canyons.

Imagine, if you will, taking your loved one out for a night of thrills aboard some sprawling floating mini-city enraptured by the drama of the Manhattan skyline, the clinking of champagne glasses, the raking of multi-colored chips across the felt, the expert rip of a dealer's shuffle, the siren whoopee of a jackpot on the next slot, the guffaws from the standup comedian's lounge routine, the lilting of the ship's orchestra and the gentle rumble of powerful engines below.

Imagine, if you will, the envy of the New Jerseyans, the Las Vegans, the Carribeans, when they discover that no matter how hard they try, people really would rather be in Manhattan.

Imagine the renaissance of the Hudson River waterfront, not filled with the ill-fated Westway that frightened fish and pedestrians and environmentalists but with leviathans of glamorous, romantic, historic seafaring palaces.

Imagine that it might not be perfect, that some people will squander needed family funds, forfeit savings in a drunken spree, even, perhaps, not fully report all their earnings. Imagine also that some corrupt people might try to cheat and skim.

Imagine that Broadway might not like the competition.

Imagine that hotels might be wary of overnight "cruises."

Imagine that some moralists will be outraged.

Imagine that the state lotto system might suffer a bit.

Imagine that some lives will be ruined.

But also wake up to reality and recognize that New Jersey is an enemy, not a friend, that people are being ruined by the numbers games, by betting on the horses (and even some by betting on stocks).

Maybe the ships should be painted with signs warning that gambling is possibly injurious to economic health.

But bring back the ships. Buy back the Queen Mary from Long Beach, reconstruct the Normandie, recreate the Titanic, divert all those cruise ships from Miami. Hire more harbor patrol boats to regulate the teeming traffic on the waves. Build, or buy, more fireboats to constantly sprain us all. Build the giant ships here. Recommission old war ships. Rig the sails on the tall ships. Heck, ole man Hudson could use a showboat or two, or canal barges, or whaling ships.

All we are asking is to make the South Street Seaport happy and expand a bit. Why not the New York Seaport?

Jubilation.

Give us glory or give up!

Pay some well-dressed investment banker to demonstrate how New York can make money on casino boat gambling.

Surely a mayor as righteous as Mayor Guiliani could ferret out any corruption quickly and if an operator does not do a good job, just think what wonderful classrooms these boats could become for the city's school system.

The city spend many millions building a new passenger ship terminal just as transatlantic oceanliner trips lost their luster and the terminal and most of the waterfront lies fallow.

No matter what critics of gambling might scream, logic demands that the city actively promote a Manhattan-based casino boat industry. Perhaps it might arrange for the boats to stop also in Coney Island. If laws need to be changed, change them, that's what political leaders are elected to do.

How does the city make money? By sanctioning those operators that contribute a fair share to the city and open their books, by scrupulously investigating those who do not, and by supporting them with bond issues for related public improvements to make the entire experience more pleasurable for all New Yorkers.

Wily, savvy investment bankers in the city should easily figure out a way for the city to get a decent percentage, perhaps 25 percent, of the profits.

We're only talking billions, you know.

 

Joseph P. Fried reported in The New York Times Oct. 10, 1997, that United States Attorney Zachary W. Carter, the top Federal prosecutor in Brooklyn, outlined intepretations of Federal rules that held that casino boats sailing from New York City must travel at least 12 miles from shore rather than just three.

 

The story maintained that his ruling "could seriously dampen the interest expressed by more than two dozen concerns interesting in operating such cruise operations from the city, noting that Mayor Rudolph W. Giuliani had urged such a ruling.  

The story also quoted Jason Ader, an analyst for Bear, Stearns, an investment banking firm, as stating that "Twelve miles is a big obstacle." (10/10)

In a ruling Dec. 1, 1997, however, Judge Allyne R. Ross of the Federal District Court in Brooklyn held that the Government's 12-mile intepretation of jurisdiction was too broad.  

An interesting interpretation of the city's opposition to the gambling cruises and attempts to enforce a 12-mile trip rather than a three-mile trip into international waters where gambling is not regulated appeared in Neal Travis' New York column in The New York Post, Dec. 5, 1997:

"On the surface, a couple of casino ships operating out of New York docks would seem just a drop in the gambling ocean.  But I think I know why Mayor Rudy is so vigorously attempting to scuttle the seagoing games of chance.  Guiliani wants to keep the city's Off-Track Betting options open.  One of those options is full-scale sports betting - football, basketbacll, baseball, even the New York City Marathon.  If the OTB did extend its operations from strictly horse racing to all manner of sports, there could be a $1 billion annual jackpot for the city at no social cost.  The money is already being wagered with illegal bookies and in Las Vegas, and on the burgeoning off-shore sports books.  The thinking among some of Guiliani's financial people is that if the casino ships get established, they will skim some of the gambling pool by offering craps, blackjack and slos.  But if anyone's going to run legal gambling here, it should be the established and now-profitable OTB, these advisers say."

The OTB expansion idea makes sense, but it should include casino gambling, which could be limited to ships, where it could more easily be controlled.  Surely, the lost-soul gamblers might be a lot more inspired yelling "Banco" in the bay within site of the Statue of Liberty and the Lower Manhattan skyline than in Atlantic City!

Meanwhile, a Dec. 5, 1997 New York Times story by Thomas J. Lueck  quoted a top Giuliani administration officials as saying that it was exploring the use of part of Governors Island for "a major casino and five-story hotel."  The senior adviser, who spoke to The Times only on the condition of anonymonity, said the concept was not to create an Atlantic City, but a Monaco. (12/5/97)

Mayor Guiliani saw the glitter and got on the bandwagon at last.  The front page of The New York Post Dec. 6, 1997, carried a photomontage of a Las Vegasized Governors Island with inside stories confirming Neal Travis' exclusive of the day before that the city was considering gambling for Governors Island.  It quoted Taive White as saying , most perceptively, that "Right now [Lower Manhattan] is all tourists. If people were gambling at Governors Island, a lot more real New Yorkers would come downtown."  

While not admitting it had been scooped, The New York Times also played the story on its front page the same day.  Its story by David Firestone said that the mayor "is convinced that casino gambling is coming to New York City" and that the mayor confirmed that Governors Island was a site under consideration for a "perfect location for a Monte Carlo-like resort that would become 'probably the best known, the most famous in the world.'"

Absolutely.

The stunning, long-overdue comments may well be Guiliani's lasting legacy for putting New York on firm footing and putting New Jerseyans and Las Vegans in their place!

The Times story said that the city also planned to impose stiff new restrictions on casino ships, which could begin in earnest next year.  The mayor's desire to "make sure that gambling happens on the city's terms: located where the city wants it and run by whom the city chooses" are correct.

"The moves illustrate his conviction that the city will eventually win permission for gambling from the Legislature and the state's voters - both would have to approve a state constitutional amendment - and that thecity must limit gambling operators to keep them under close scrutiny and to prevent the infiltration of organized crime," Firestone wrote.  The Legislature has to approve such a proposed amendment two sessions in a row before it can put on the ballot. (12/6)

A January 15, 1998 article by Norimitsu Onishi in The New York Times quoted Jose Maldonado, executive director of the city's new Gambling Control Commission, as stating that "within six months, you could have perhaps five or six gambling boats docked in New York City piers, going out three miles outside of U. S. territory waters and running gambling casinos."

Four of six companies who recently paid $100,000 to the city to apply for permission to run such casino ships submitted to plans to sail from Manhattan.  In December, 1997, a Federal District Court held that gambling aboard ships could start in international waters three miles from the shore, reversing an earlier decision by United States Attorney Zachary W. Carter.

Bay Casino, which started a casino cruise operation out of Sheepshead Bay in Brooklyn in 1996, was one of the applicants.  Another was President Cruises of St. Louis, Mo., that hopes to offer cruises for up to 1,000 people, and Manhattan Cruises, a partnership that helped create the Foxwoods Resort Casino in Connecticut, wants to take 1,500 gamblers a night on a 700-foot ship from Pier 92 at West 55th Street. (1/15/98)

The Edinburgh Castle, a 713-foot-long, 510-cabin ship made its first gambling cruise from Pier 88 on West 55th Street January 27 with 219 passengers, although the ship can accommodate about 1,000 passengers.  Tickets, including cabin, meals and entertainment, cost $99 a person for a weeknight cruise that leaves at 7 PM and returns at 8 AM the next morning.  On Friday and Saturday nights, the tickets are $199 but the cruise does not return until 3 PM the next day.

The ship, which is owned by Manhattan Cruises, headed by Michael Brown, the former president of the Foxwoods Resorts Casino in Connecticut, takes about two hours to reach the 3-mile limit before gambling can commence.  It was the first ship to be given provisional approval for such cruises by the city's Gambling Control Commission that was established last year.  According to a January 29, 1998 article by Robert Hardt Jr., in The New York Post, five other ships have applied for similar approvals and "another four companies have expressed interest." (1/31/98)

 

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