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Suffolk Closeup: A look at Jake’s 58 casino, and where it came from

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by Karl Grosman

Suffolk County suddenly has gotten a major gambling casino — the recently opened Jake’s 58 Hotel & Casino along the Long Island Expressway.

above video by HotelBusiness.com

Medford had been the site planned for the casino by Suffolk County Regional Off-Track Betting Corporation. But the Medford location faced strong resistance from area residents and Brookhaven Town officials.

Then the Islandia Marriott came on the market. It had been the Islandia Marriott Long Island, at 10 stories with 227 rooms, a huge hotel for Suffolk. It was purchased by Delaware North, which describes itself as a “global hospitality and food service company” and will be running it with the Suffolk OTB.

Jake’s 58 gets its name from the nearest LIE exit, 58, and the Jacobs family, owner of Buffalo-based Delaware North.

It is a high-stakes gamble for Suffolk OTB.

As Newsday’s article was headlined last month, “Suffolk OTB counts on a casino in Islandia to counter bankruptcy.” Indeed, Suffolk OTB officials are hoping the casino will generate $2 billion in gross revenue a year. That would get Suffolk OTB out of bankruptcy, which it first filed for in 2011.

“Suffolk County OTB executives say Long Island’s first video lottery casino is the agency’s last ditch effort to emerge from bankruptcy and save itself — if the Islandia betting parlor can meet projected revenues,” Newsday reported.

Suffolk OTB — indeed gambling in general in the U.S. — has hit hard times in recent decades. Much of this has to do with what is termed the “casino-saturation problem.” In 1978, only Nevada and New Jersey had commercial casinos. Today, they are in 24 states. Gambling on the Internet has grown as well.

Atlantic City was for a time the gambling mecca of the Northeast. But now nearly every state in the region has casinos. As for Atlantic City, which had a dozen huge casinos, now that’s down to seven with the latest one closing last year, Trump Taj Mahal.

Jake’s 58, meanwhile, is not exactly a traditional casino. It is limited to video slot machines — 265 of them now and an expected 1,000 by this summer. They are electronic versions of casino games. Suffolk OTB plans to ask for the state’s OK to add an additional 1,000. But this set-up might be fine for Long Islanders seeking to avoid a drive to Atlantic City or Connecticut to bet in their casinos, or a trip upstate.

How Suffolk County got a casino is an odd story.

In 2014, New York State Governor Andrew Cuomo sought to “reform” the Long Island Power Authority and bring in a New Jersey-based company, PSEG, to be the main utility on the island. But this was opposed by the island’s state legislators from both parties.

According to sources in Albany, Cuomo pushed a deal, taken to legislators by his then-top aide, former Deputy Suffolk County Executive Larry Schwartz. Under it, to aid Nassau and Suffolk’s financially-strapped county governments, they would get the governor’s go-ahead to set up facilities for video slot machines — in return for the lawmakers supporting his “reform” scheme. More than half then went for it.  Originally, Cuomo had sought to locate new casinos only in economically depressed areas upstate.

In the end, intense public opposition in Nassau County stopped the proposed casino there, but an arrangement was made under which Nassau would receive revenue from a video slot operation in Queens.

Suffolk OTB, in sharp decline, earlier had closed 10 of its 14 gambling locations and sold its Hauppauge headquarters. Suffolk OTB officials say a central location in the county was the preferred site all along, rather than Medford. And the use of what had been the Islandia Marriott avoids the need for a new facility — the hotel could be modified to become a casino.

Suffolk County government is to receive at least $2 million in the first year, $3 million in the second and then $1 million for each of the next eight years.

The small Village of Islandia, created in 1985, has been promised $47 million over 20 years by Delaware North, enough to cut village property taxes by about half for its 3,335 residents, says the village’s mayor, Allan M. Dorman, a big booster of the casino.

But there is a lawsuit pending brought by some area residents seeking to close the Islandia operation. It alleges the village’s approval was fraught with illegalities. They further complain the casino will lead to crime, increased traffic and lower property values. 

Opponents of state-sponsored gambling have also long charged that it hits low-wage earners the hardest, causing debt, broken families and other personal tragedies — that gambling is often addictive and government shouldn’t encourage it.

Years ago I researched and wrote an article on the Gamblers Anonymous group. Members spoke of the thrill of gambling — as opposed to betting — the difference being, they explained, they couldn’t afford to lose the money when gambling, and this danger caused a certain “high.”

They spoke of losing jobs and relationships and becoming hooked on what became a compulsion.

Gamblers Anonymous remains active on Long Island, and with a new casino here can be expected to be yet more active. 

A recent article in The Atlantic magazine related:

“A significant portion of casino revenue now comes from a small percentage of customers, most of them likely addicts, playing machines that are designed explicitly to lull them into a trancelike state that the industry refers to as ‘continuous gaming productivity.’”

Featured photo from Jake’s 58 Hotel video by HotelBusiness.com.

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