Jake’s 58 Suit Challenging Casino Legality Dismissed in US Federal Court

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Jake’s 58 Casino Hotel in Islandia, New York, has emerged triumphant in a federal case that challenged the gaming venue’s legal right to operate video gaming terminals (VGTs).

In 2016, four residents filed a lawsuit against the Long Island town after the Islandia Village Board renounced a land-use application by Delaware North and Suffolk Off-Track Betting Corporation (Suffolk OTB). The judgment was to have the hotel located at 3635 Express Drive authorized as a gaming venue.

At the time, Delaware was the owner of the departed Marriott hotel. Suffolk OTB was positioned to run the gaming operations of the planned VGT venue.

The case claimed that the board engaged in illegal spot zoning, a practice where the state gives a business special operating privileges prohibited in the rest of a region. Jake’s 58 is the only place in Islandia where electronic table games and video gaming tables are allowed.

The four complainants, Richard Meyer, Jennifer Tomasino, Apryl Meyer, and Kevin Montano, claimed that the local Islandia government conspired with Delaware North and Suffolk OTB.

That accusation arose when the town concurred to amend the land-use rights for the hotel facility to allow slot machines. Delaware North and Suffolk, in exchange, promised Islandia $47 million over 20 years.

This week, Judge Joan Azrack of the US Eastern District of New York ruled that the village did not defy any laws, and the complainant’s collusion claims look to be nothing more than assumptions and speculations.

Lawsuit dismissed

Jake’s 58 launched in early 2017. Some years after, New York decided to allow VGTs, which closely took off conventional slot machines at the venues in Nassau and Suffolk counties. With Delaware North’s financial help, Suffolk OTB bought the ancient Marriott for more than $40.4 million and renamed the property to Jake’s 58 Casino Hotel.

The name was an epic to the Jacobs family, the billionaire owner of the Delaware North hospitality agency. The 58 represents the exit number that the property sits away from the Long Island Expressway.

Suffolk OTB was established in 1975 as a public benefit agency. The firm claims its establishment was to create revenue for the local government, curb illegal sports betting, and ensure the well-being of the horse racing industry.

Suffolk OTB was closing into bankruptcy during Jake’s 58 establishments. Delaware North interceded to buy the Marriott and then rented its gaming operations to Suffolk OTB for a concealed annual fee.

Almost 15 years later, Suffolk OTB, now well off, bought Delaware North’s hotel and casino ownership for $120 million. The accession was finalized in May of this year.

VGT legalization

In 2013, Governor Andrew Cuomo (D) signed legislation that significantly boosted gaming in New York. Along with four uptown commercial casinos resorts featuring conventional table games and slots machines, the bill allowed VGTs in Nassau and Suffolk.

The New York State Gaming Commission regulates all gaming in the state.

Paul Sabatino, the lawyer representing the four complainants in Jake’s 58 case, says his clients were not contented with judge Azrack’s ruling.

Sabatino told Newsday, “They are crushed.” The attorney added that the union would consider whether to appeal the judgment.

Jake’s Financials

Since its establishment nearly four years ago, Jake’s Casino has created much revenue for Suffolk OTB and Delaware North.

In its first whole year, the casino reported gross gaming revenue (GGR) of $158.26 million, $209 million in the second year, and $218.7 million in the third year. Last year, COVID-19 caused Jake to close following state directives from mid-March through August. That resulted in gross gaming revenue totaling only $104.2 million.