The state Gaming Commission has made only limited progress fixing problems with its monitoring of casinos, especially with its failure to collect millions in oversight fees from casinos, according to a follow-up report released today by State Comptroller Thomas P. DiNapoli. The problems were first identified in an audit DiNapoli released in 2020 that found the commission had not collected $13 million owed by casinos.
“The Gaming Commission must do a better job staying on top of New York’s ever-expanding gaming footprint. The commission should collect all oversight charges that casinos are supposed to cover,” DiNapoli said. “The commission has made some changes, but it needs to do much more, especially as the state is exploring issuing licenses for three new casinos and recovering from the pandemic.”
The commission regulates all aspects of gaming activity in New York. Commercial and Video Lottery Terminal (VLT) facilities are required to send a percentage of their gaming revenues to the state, and tribe/nation casino payments are defined in compacts.
Commission officials are positioned at each of the state’s 19 casinos to oversee operations and ensure that gaming regulations and tribe/nation compacts are followed. The commission is supposed to collect the cost of this oversight from these entities. In DiNapoli’s initial report, auditors found that although the commission collected $144.8 million from VLT facilities and $8.9 million from the tribe/nation casinos for oversight costs, it failed to bill the four commercial casinos an estimated $13 million for those costs, as it should have. That audit examined three fiscal years, from April 1, 2017, through March 31, 2019.
In the follow-up report, DiNapoli’s office found that, of the $13 million in unbilled oversight costs identified in the initial report, the commission billed the four casinos in November 2019 for personal service costs totaling $9.3 million. These costs were due Dec. 21, 2019. However, the commission did not provide evidence that it assessed and billed casinos for non-personal service costs, such as office equipment and supplies, for that same period, which totaled about $3.7 million. None of that money has been collected from the Rivers Casino & Resort, the Lago Resort & Casino, Resorts World, or the Tioga Downs Casino.
In November 2020, the commission billed oversight costs for the commercial casinos for the period April 1, 2019, through March 31, 2020, totaling just under $4.7 million and due Dec. 9, 2020. At the time of the follow-up, the commission had not yet collected those costs either. In total, the casinos owe New York $17.7 million.
Two other recommendations on tribe/nation revenue reporting and oversight included in the initial audit were also not implemented.
Report
Oversight of Casino Revenues and Regulatory Oversight Reimbursement Collections (Follow-Up)
Oversight of Casino Revenues and Regulatory Oversight Collections (2019-S-8)
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