Jake’s 58 Casino Appeals $26K Regulatory Fine Issued By New York Gaming Commission

Posted on: August 7, 2024, 11:41h. 

Last updated on: August 7, 2024, 01:40h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Jake’s 58 Casino Hotel on New York’s Long Island has appealed a fine levied by the New York State Gaming Commission for not properly procuring necessary gaming licenses for more than two dozen employees.

Jake's 58 Casino Hotel Long Island New York
A rendering of the forthcoming Jake’s 58 Casino Hotel on New York’s Long Island. The video lottery casino is facing a regulatory fine for not properly licensing its workforce. (Image: Suffolk OTB)

In December, the state’s gaming regulatory agency notified Suffolk Regional Off-Track Betting Corporation (Suffolk OTB), the public entity that owns and operates the video lottery casino and hotel, that 34 of its employees weren’t properly licensed.

The commission said nine staffers were working without a license while 25 others were employed with expired or incorrect licenses. Newsday broke the news of the alleged regulatory violations through a Freedom of Information Law request.

The gaming commission issued Suffolk OTB a $26K fine on April 1 after determining that 26 employees remained noncompliant in licensing. Newsday reports that Jake’s 58 is appealing the penalty on claims that the violations stem from when the casino was owned by Delaware North.

Compliance Complaints

Suffolk OTB acquired Jake’s 58 in 2021 for $120 million from Delaware North, the Buffalo-based gaming and hospitality conglomerate that helped Suffolk open the video lottery casino inside a former Marriott hotel in early 2017. Jake’s offers more than 1,000 video lottery terminals (VLT), slot-like machines operated by a centralized lottery network.

Jake’s is one of 11 VLT casinos in the state. Each VLT casino keeps about 46% of the gross gaming revenue won by the terminals and electronic table games. About 44% goes to state education, and the remaining 10% is reserved for vendors and the administration of the central lottery system.

Suffolk is currently undergoing a $210 million expansion and overhaul that will double the number of VLT positions and see each of the property’s 210 guestrooms renovated. The investment also includes new restaurant and bar outlets, the reopening of an indoor swimming pool, a multilevel parking garage, and a sound barrier to limit noise to an adjacent neighborhood.

While the expansion is ongoing, state gaming regulators say Suffolk must do more to keep its workforce in regulatory compliance. Suffolk OTB CEO Phil Boyle told Newsday that the company is amid a hiring process for a newly created full-time position that will oversee employee licensing.

Boyle says the employee licensing violations raised by the state primarily dealt with operations when Delaware North managed the casino.

Though we were only recently notified of any issues … questions date back to when Delaware North ran Jake’s 58 Casino Hotel. It is our intention to address them, resolve them, and become a statewide model for other casinos to follow regarding license compliance,” Boyle told the Long Island news outlet.

In a statement provided to Casino.org, Delaware North says it was not notified of worker non-compliance during its management of Jake’s 58.

Delaware North operated gaming at Jake’s 58 under a management contract with Suffolk Regional Off-Track Betting from the venue’s opening in February 2017 to May 2021. Delaware North did not receive any notices of employee licensing violations during its period of managing Jake’s 58 on behalf of [Suffolk OTB]. Delaware North is strongly committed to gaming compliance, including employee licensing, at our casinos and other gaming venues in New York, seven other states and Australia,” the Delaware North statement read.

Possible Competition?

Jake’s could see new gaming competition should Las Vegas Sands secure one of the three downstate casino licenses the state is expected to grant next year.

Sands is seeking a permit to construct a $6B integrated resort casino at the Nassau Veterans Memorial Coliseum site. Jake’s is about 30 miles east of where Sands wants to construct its casino.

The Sands project, however, continues to face considerable local opposition. The Nassau Coliseum property is also just 20 miles east of Resorts World New York City, the Queens video lottery racino that’s considered a favorite for one of the three downstate concessions.

Jake’s isn’t bidding for one of the full-scale gaming licenses that include privileges for Las Vegas-style slot machines, live dealer table games, and sports betting.