David Giacalone has spent a lot of the past few weeks fighting a casino in Schenectady. But on Friday he wrote to the Attorney General’s Office suggesting that the arts venues seeking pacts with casino operators upstate may be violating antitrust laws. The Times Union has reported about the Fair Game terms in this story and this column.
A retired antitrust lawyer with the Federal Trade Commission in Washington, D.C., Giacalone, 64, served as a mediator mostly in divorce cases in Schenectady. He lives in the Stockade.
He emailed this to the AG on Friday about the group called the Upstate Theater Coalition For A Fair Game, led by Proctors leader Philip Morris, which has been seeking deals with casino operators on terms such as restricted number of seats, contributions to a Fair Game fund and agreements on hiring talent:
“Fair Game is taking advantage of the Casino Siting process, with its criteria concerning partnerships with affected local entertainment venues, to create collective action among the largest theater venues in the State that pressures casino applicants — major competitors with such entertainment venues — into accepting a stringent uniform set of restrictions and financial obligations in order to demonstrate Local Support in the Application process, with its very tight and imminent deadlines. As seen in news articles such as the one copied below from today’s Schenectady Gazette, Fair Game members not only seek to eliminate competition with casinos for top talent and productions, but also have agreed among themselves to a formula for dividing the revenues received from casinos.
This appears to go far beyond any possible State Action defense under legislation establishing the casino licensing process for restricting competition among themselves and with casinos. The major entertainment venues are encouraged under the Act to enter into partnerships with “local casinos”, they are not given the freedom to eliminate competition among themselves, nor to prevent competition from all casinos within a large (seemingly unlimited) region.
For example, in explaining the concept of Partnerships with Live Entertainment Venues, the RFA for Applications seeks “copies of any and all contracts, agreements, MOUs or other understandings with live entertainment venues that may be impaced by the Gaming Facility.” (at 60). Also, in their applications, each applicant must include, in Ex. IX.B.2, copies of “agreements with impacted entertainment venues” and any declined agreements. (RFA at 74-75) One omnibus agreement with a coalition of venues is clearly not anticipated (nor, separate agreements which merely take collective terms and apply them in a separate contract with each venue).
At its website, Fair Game brags about its “collective impact” – see
http://afairgame.org/collective-impact/ – in ticket receipts, jobs created, moneys invested, etc. Major theaters such as Proctors and SPAC and the Times Union Center already have ticket prices for major acts and productions that are far out of reach of large percentages of residents of our region. By acting jointly, they are likely to increase their ability to raise prices, not only by eliminating future competition from casinos, but also competition within the siting application process with each other to form advantageous partnerships with local casinos. (The ability of the East Greenbush applicant to achieve agreements separately with local venues shows that a joint bargaining team of theaters is not needed.)
The partnerships envisioned under The Upstate New York Gaming Economic Development Act (Chapters 174 and 175 of the Laws of 2013), appear to favor the largest theaters, further disadvantaging the small and “mom-and-pop” venues and businesses that are likely to see the disposable income of many customers spent instead at a local casino.
For the past couple of weeks, Philip Morris has gone public with his pressure for applicants to accept the collective terms of the Fair Game members. Clearly, Fair Game hopes to use the looming June 30 application deadline to pressure-coerce casinos to sign onto their scheme. I hope the Attorney General will make some sort of statement today cautioning Fair Game from attempting to wield such undue coercive power.”
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