Jake’s 58 Casino Hotel in Islandia, N.Y., has emerged victorious in a federal lawsuit that challenged the gaming venue’s legal rights to operate video gaming terminals (VGTs).
Four residents in 2016 brought a lawsuit against the Long Island town after the Islandia Village Board signed off on a land-use application by Delaware North and Suffolk Off-Track Betting Corp. (Suffolk OTB) to have the hotel located at 3635 Express Drive approved as a gaming venue.
Delaware North at the time was the owner of the former Marriott hotel. Suffolk OTB was set to operate the gaming operations of the planned VGT location.
The lawsuit claimed that the board engaged in illegal “spot zoning,” a practice where a business is granted unique operating privileges that are prohibited in the rest of a community. Jake’s 58 is the only place in Islandia where VGTs and electronic table games are permitted.
The four plaintiffs — Jennifer Tomasino, Kevin Montano, Richard Meyer, and Apryl Meyer — argued that the local Islandia government colluded with Delaware North and Suffolk OTB when the town agreed to amend the land-use rights for the hotel property to allow slot machines. In exchange, Delaware North and Suffolk promised Islandia $47 million over 20 years.
Judge Joan Azrack of the US Eastern District of New York this week ruled that the village did not violate any laws, and the plaintiffs’ claims of collusion “appears to be nothing more than conjecture and speculation.”
Jake’s 58 opened in early 2017 several years after New York opted to allow VGTs, which closely mimic traditional slot machines, at as many as two venues in Suffolk or Nassau counties. Suffolk OTB, with the financial help of Delaware North, purchased the former Marriott for more than $40.4 million and rebranded the property as Jake’s 58 Casino Hotel.
The name was an ode to the Jacobs family, the billionaire owners of the Delaware North hospitality conglomerate. The “58” refers to the exit number that the property is located off of the Long Island Expressway.
Suffolk OTB was founded in 1975 as a public benefit corporation. The company claims its formation was “to generate revenue for local government, curb illegal bookmaking, and insure the well-being of the horse racing industry.”
Suffolk OTB was nearing bankruptcy during the Jake’s 58 development. Delaware North stepped in to purchase the Marriott, and then leased its gaming operations to Suffolk OTB for undisclosed annual rent.
Nearly 15 years later, Suffolk OTB — now flush with cash — purchased Delaware North’s ownership of the hotel and casino for $120 million. The acquisition was completed in May of this year.
In 2013, then-Gov. Andrew Cuomo (D) signed legislation that greatly expanded gaming in New York. Along with four upstate commercial casino resorts featuring traditional slot machines and table games, the bill authorized VGTs in Suffolk and Nassau.
The New York State Gaming Commission oversees all gaming in the state.
Paul Sabatino, the attorney representing the four plaintiffs in the Jake’s 58 Casino lawsuit, says his clients are disappointed in Judge Azrack’s judgment.
“They’re crushed,” Sabatino told Newsday. The lawyer added that the group would consider whether to appeal the ruling.
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